Can I Combine My Mortgages?

Homeownership often comes with the challenge of combining multiple mortgages, whether from a primary mortgage, second mortgage, HELOC, or home equity loan. If you’re juggling multiple payments, you may wonder, “Can I combine my mortgages?” The answer is yes, but the process involves significant financial considerations, eligibility requirements, and an understanding of home refinancing and home equity loan options.  We published this article to explain the benefits homeowners have to consolidate mortgages with home equity loans and how the process works, and key benefits and drawbacks.

How to Combine 1st and 2nd Mortgage into One Loan

The RefiGuide can help you better understand your financial options with multiple mortgages and home loans. Our team will help you shop top lenders so you can make wise financing decisions in 2025.

1. Simplify your life with one mortgage payment
2. Refinance primary mortgage and HELOCs together for one monthly payment
3. Save money by combining mortgages for lower loan payment

Why Homeowners Consider Mortgage Consolidation

1. Simplifying Finances

Managing multiple mortgages can be overwhelming. Combining them into one loan allows homeowners to streamline payments, track their finances more efficiently, and reduce the risk of missed payments.

• One single monthly payment instead of multiple due dates.
• Less paperwork and loan management hassles.
• Improved budgeting and financial planning.

2. Lowering Interest Rates

If your current mortgages carry high-interest rates, consolidating into a new equity loan or HELOC with a lower rate can save you thousands of dollars in interest over time. In most cases, 2nd mortgage rates are higher than 1st mortgage interest rates. Who wouldn’t want to pay less in interest and keep more in savings?

• Lock in lower interest rates compared to older loans.
• Reduce total interest paid over the life of the loan.
• Potential for shorter loan terms, helping you become mortgage-free sooner.

3. Accessing Home Equity

By consolidating mortgages through a cash-out refinance, you can tap into your home equity to fund home renovations, pay off high-interest debt, or cover major expenses. But ask yourself—is tapping into your home equity the right choice for your financial future?

• Get lump-sum cash for home improvements or debt consolidation.
• Reinvest equity into your property, increasing home value.
• Use funds for educational expenses, medical bills, or investments.

How to Combine Mortgages

1. Refinancing into One Loan

Refinancing allows homeowners to replace multiple mortgages with a new single mortgage. This often provides a lower interest rate and better loan terms.

Requirements for Refinancing:

• Sufficient home equity (typically 20% or more).
• A good credit score (620+ for conventional loans, higher for better rates).
• A low debt-to-income (DTI) ratio, usually under 43%.

2. Home Equity Loan or Line of Credit or HELOC

Instead of refinancing, you can take out a home equity loan or HELOC to pay off multiple mortgage balances. This method is ideal for those with favorable loan terms on their first mortgage who do not want to refinance.

Key Differences:

• Home Equity Loan: Lump sum with fixed interest rate.
• HELOC: Flexible line of credit with variable rates.

3. Cash-Out Refinance

With a cash out refinancing, you replace existing loans with a larger mortgage and withdraw the difference in cash. This method is suitable for homeowners needing funds for renovations or large expenses. Compare the cash out refinance vs home equity loans.

Pros:

• Lower interest rates compared to credit cards and unsecured personal loans.
• Increased home value through renovations.

Cons:

• Higher total loan amount.
• Longer repayment period.

Risks and Considerations

1. Closing Costs and Fees

Mortgage consolidation often involves closing costs (2-5% of the loan amount), appraisal fees, and potential prepayment penalties. Factor these costs into your calculations before refinancing. How much does it cost to refinance a mortgage in 2025?

2. Extended Loan Term

While consolidation may lower your monthly payments, extending the loan term could result in paying more interest over time.

3. Risk of Foreclosure

By securing a larger mortgage, you increase the amount at risk in case of financial hardship. If payments become unaffordable, you risk losing your home.

Mortgage consolidation can be a smart financial move, offering lower interest rates, easier payment management, and access to home equity. However, it requires careful evaluation of costs, loan terms, and potential risks. Before proceeding, consult a mortgage specialist or financial advisor to determine the best approach for your financial goals.

In the end, the real question isn’t just “Can I combine my mortgages?” but rather, “Is combining my mortgages the best decision for my future?”

7 Reasons to Refinance and Combine Your Mortgage and Home Equity Loan Together in 2025

Homeowners often juggle multiple loans, such as a primary mortgage and a home equity loan, which can be challenging to manage. As we move into 2025, refinancing and combining these loans into a single mortgage presents a strategic financial opportunity. Whether you’re looking to lower payments, secure a better interest rate, or simplify finances, mortgage consolidation can provide long-term benefits. Here are seven compelling reasons to refinance and merge your mortgage and home equity loan in 2025.

1. Lower Mortgage Rates

Interest rates fluctuate over time, and 2025 may present an ideal opportunity to secure a lower fixed-rate mortgage. Many homeowners originally obtained home equity loans when interest rates were higher. By consolidating both loans into one mortgage with a lower rate, you can significantly reduce your total interest costs over the life of the loan.

Key Benefits:

• Reduce overall interest payments.
• Secure a fixed, stable rate for long-term financial predictability.
• Take advantage of historically low refinancing rates in 2025.

2. Simplify Monthly Payments

Managing multiple loans means keeping track of different due dates, interest rates, and payment structures. Refinancing into a single loan eliminates this hassle, making financial management easier.

Why It Matters:

• One monthly payment instead of two or more.
• Less financial stress by reducing complexity.
• Easier budgeting with a clear, fixed amount due each month.

3. Improve Cash Flow with Lower Payments

By refinancing, you can extend the repayment term of your combined mortgage, thereby reducing your monthly payment. This frees up cash flow, allowing you to allocate funds toward other financial goals, such as investing, saving for retirement, or paying off high-interest debts.

How It Helps:

• Reduce financial burden by lowering monthly payments.
• Free up cash for emergencies or investment opportunities.
• Maintain a more flexible budget to adapt to changing economic conditions.

4. Access Home Equity for Major Expenses

Refinancing allows homeowners to tap into their home equity by borrowing more than what they owe on their existing loans. This can be an excellent way to fund home improvements, college tuition, or medical expenses at a lower interest rate than personal loans or credit cards.

Ways to Use Your Home Equity:

• Renovate or upgrade your home to increase its value.
• Pay off high-interest debt such as credit cards or personal loans.
• Cover major expenses like tuition, weddings, or emergency medical bills.

5. Potential Tax Benefits

Mortgage interest on a consolidated loan may be tax-deductible, whereas interest on a home equity loan used for non-home-related expenses might not be. Refinancing into a primary mortgage allows homeowners to maximize their tax deductions while maintaining financial flexibility.

Tax Benefits to Consider:

• Deductible mortgage interest on a primary residence.
• Potential savings on tax liabilities.
• Consolidation of debt into a tax-favored loan structure.

6. Protect Against Rising Interest Rates

If your home equity loan has a variable interest rate, your payments may increase significantly if rates rise. Refinancing allows you to lock in a fixed-rate mortgage, providing stability and predictability in monthly payments regardless of economic fluctuations.

Why This Matters in 2025:

• Fixed rates offer protection against economic uncertainty.
• Peace of mind with a stable loan payment.
• Avoid the risk of rising HELOC interest rates.

7. Pay Off Your Mortgage Faster

Refinancing can also help you shorten your loan term, enabling you to pay off your home sooner and save thousands in interest. If you’re in a stronger financial position, opting for a 15- or 20-year mortgage instead of a 30-year loan can accelerate your homeownership goals.

Advantages of a Shorter Loan Term:

• Build equity faster and increase homeownership value.
• Reduce total interest paid over time.
• Achieve financial freedom sooner by eliminating mortgage debt earlier.

Refinancing and combining your mortgage and home equity loan in 2025 can lead to significant financial advantages. Whether your goal is to reduce interest rates, simplify payments, free up cash flow, or gain financial security, mortgage consolidation is a smart strategy for homeowners.

Before making a decision, compare rates, consult a mortgage specialist, and consider your long-term financial objectives. The right home refinance plan can provide stability, savings, and a path to financial independence.

FAQ’s for Combing Mortgages

Do I Need to Refinance My Mortgage to Combine My Home Equity Loan Into One Mortgage?

Yes, to combine your home equity loan and primary mortgage into one, you typically need to refinance both into a single new loan. This is known as a cash-out refinance or rate-and-term refinance. Refinancing can help you secure lower interest rates, reduce monthly payments, and simplify loan management. However, eligibility depends on credit score, home equity, and lender requirements. Also consider refinancing a home equity loan for a lower interest rate.

Can You Refinance a Home Equity Loan Into a Mortgage?

Yes, you can refinance a home equity loan into a primary mortgage through a cash-out refinance or a rate-and-term refinance. This allows you to combine both loans into one, often at a lower interest rate with a fixed payment. Refinancing may simplify payments and reduce costs, but consider factors like closing costs, loan terms, and equity requirements before proceeding.

Is It Worth It to Combine Home Equity Loans and Mortgages Together? Combining a home equity loan and mortgage can be worth it if it results in lower interest rates, reduced monthly payments, and financial simplicity. If your current 1st and 2nd mortgages have high interest rates or variable terms, refinancing into a single, fixed-rate mortgage can offer long-term savings. However, consider home equity loan closing costs, refinance terms, and overall financial goals before deciding, as extending your loan term could increase total interest paid.

Can You Refinance a HELOC Into a Mortgage?

Yes, refinancing a HELOC into a primary mortgage is possible through a cash-out refinance or consolidation loan. This can help lock in a lower fixed rate, reduce monthly payments, and simplify debt management. However, it may extend your loan term, and closing costs apply. Ensure you have sufficient home equity and meet lender qualifications before refinancing.

Can You Refinance a HELOC Into a Home Equity Loan?

Yes, you can refinance a HELOC into a home equity loan if you want fixed payments instead of variable interest rates. Remember that a home equity loan offers a lump sum at a fixed rate, making budgeting easier. This option is beneficial if HELOC interest rates are rising, but it may require a credit check, income verification, and home appraisal.

Can I Refinance My HELOC and Get More Cash Out?

Yes, you can refinance a Home Equity Line of Credit and get cash out if you have sufficient home equity. This can also be done through a cash-out refinance or converting your HELOC into a fixed-rate loan. Doing so allows you to tap into additional equity for home improvements, debt consolidation, or major expenses while securing a more predictable repayment structure.

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