This article is discussing about the Subordinate Home Equity Line. If you happen to own a first mortgage and a home equity line of credit (HELOC), you might want an agreement of subordination set if you have your first mortgage refinanced. The date when a mortgage filed will make certain what position it is in. In the first position is the mortgage that has the earliest filling date, any HELOC and mortgages filed after that will be in order of their date of filling. Your refinance will no longer be in first position because it will have a new filing date by the time you`re ready to have your first mortgage refinanced. A subordination agreement must be prepared and sent to the HELOC lender in order to obtain the first mortgage back to first position.
Action 1 : Look for information from the holder of the second lien (the HELOC lender) what it will require to have it`s loan subordinated. Several lenders intend that you fill out a request of subordination and deliver it together with a fee, other documents and application, title report, and copies of the loan documents.
Needs for different lenders could be differ. They might ask you to be ready and hand over an agreement of subordination ((instead of a request of subordination), together with important paperwork, for them to review. Remember that your request could be delayed, so make sure you have included all needed materials.
Action 2 : Deliver the agreement of subordination to the Lender of HELOC. The agreement of subordination must be filled out and signed by the mortgage company`s representative in the first place and delivered to the subordinating company (if this the way the lender wants it finished). Many other paperwork asked by the subordinating lender shall be invoked too. This document doesn`t require to be notarized nor to be signed by the borrower. To see whether the second lien holder will approve or deny the request to have its loan subordinated to second place, it will evaluate and process all of the paperwork.
Action 3 : Wait for a decree. Get information from the second lienholder how much time is required to handle the request. This legal action may need much time. The second lien holder will ensure all things has been accepted and all of the information is correct.
Action 4 : Let the new customer sign the documents of the new loan. Note that you can sign the new loan documents, including those for the new mortgage by the time the request for a subordination agreement is approved. The notarized and the signed copy of the real mortgage documents will be forwarded together with the agreement of the subordination, to be filed at the courthouse, and the fore mortgage will not be valid anymore. the first mortgage holder will once again occupy the first position, and the second lienholder will be subordinated to second position when these documents are filed with the courthouse.
