Combine First and Second Mortgages?

A caller asks Dave about refinancing 2 mortgages.

QUESTION: Marleese and her husband have 2 mortgages.  The first is on a 30-year, 5.65% fixed rate.  The second mortgage is 7.1% and has a balance of $23,000.  They bring home $60,000.  Should they refinance and combine both mortgages?

ANSWER: You should not refinance and combine the first mortgage with other home equity lines.  As long as your second mortgage is less than half of your take-home pay, you should be able to pay it off.  Just make that second mortgage a focused goal in your debt snowball.

Then, to pay off your house in 15 years instead of 30 years, just calculate how much more you’d have to pay each month.  Send in the extra payments, making sure to write “principle only” on the check for the additional amount.  You don’t have to refinance to pay off your house earlier.