If you have a second mortgage or home equity line of credit (HELOC) against your home and you would like to refinance to take advantage of lower interest rates, then you have three main choices available to you:
All three of these choices can accomplish the main goal of a refinance: to save you money. To help you determine which one best suits your needs, we will examine each of your second mortgage refinance choices in more detail.
This is the simplest choice. If you currently have a second home mortgage or HELOC with a high adjustable or fixed interest rate, you should contact your current lender and ask about refinancing to a lower fixed interest rate. If you have a good payment history and you have good credit, they may be willing to offer you a simplified loan that requires less paperwork, since you are already a good customer. If your current lender won’t offer a streamlined loan, you should be able to find other lenders willing to offer you good mortgage deals. There is fierce competition among lenders regarding second mortgage rates and terms, so sometimes good deals can be found. This could be an attractive option if you are happy with the terms of your first mortgage and want to keep it. However, if you determine that you could save money by refinancing your primary mortgage as well, then consider combining both of them into a single loan.
If combining both loans into one would save you money, then it is certainly more convenient to make a single monthly payment and deal with just one lender instead of two. The same advice applies as above: contact your existing lenders first, to find out if one or both of them will offer you a streamlined loan package to save on paperwork and closing costs. If not, then shop around. 
When considering this option, you must carefully compare the costs of refinancing to the potential savings. If your current mortgages have fairly low interest rates, or the gap between the two rates is not large, then refinancing might easily cost you more than simply leaving matters as they are. Another factor to consider is the length of time remaining on your first loan. If you have fewer than ten years remaining, then the majority of your payment each month is applied toward principal. Refinancing could cost you more in the long run, because your new payments would start being applied almost entirely to interest, and you could wind up paying a lot more interest over time.
This is the trickiest of the three options, but it is possible to keep your second home mortgage and refinance only the first. Your first mortgage is the one that is recorded first in line, in the public records. If you refinance, the old loan is paid off and all the others move up one place. That means your second mortgage loan would automatically become first in line.
The only way this option will work is if the holder of the second mortgage agrees in writing to subordinate the lien, in other words, to remain in second position and allow the new loan to move into first. Some lenders will refuse to do this. If that is the case, then it will not be possible to refinance only the first mortgage and you are left with the other two options above. However, some holders of second mortgages recognize that it is in their own best interest to allow refinancing of the first mortgage, and they will agree to subordinate their loan. They realize that since the new loan puts the borrower in a better overall financial condition, it improves his or her ability to repay the second mortgage as well.
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