You have to look at the numbers. What is the total cost of refinancing? What is the new rate and terms of the new loan? The length of the new loan? The total cost of the new loan over its lifetime, etc. It could be good idea if the terms are better. Or it could be better to keep things as they are.
Typically, in situations where there is a second mortgage, the second mortgage is at a higher rate than the first. So, if you refinanced and combined both loans into one, you could potentially lower your average interest rate. However, that is only one aspect to consider. You have to look at the other terms as well. If you have 20 years left on your mortgages and you refinance to a 30-year, you will have lowered your payment, but you will be adding on 10 years to the repayment term, so you will likely end up paying more in the long run. If you plan to move within 3-5 years or so, you may not recoup all of the costs associated with refinancing. Refinancing costs are typically pretty close to the costs when you are buying a new home. There is a breakeven point somewhere (it differs for everyone based on loan amount, refinance costs, interest rate, etc.), but as a general rule, if you plan on staying in the house 5 years or more, refinancing can make sense from a fee perspective; but if you plan to move with 5 years, it often won't. I would suggest getting all of the information on the new loan and compare it to the existing loans and see which terms are better over the life of the loans. This is the only way you can truly determine whether it makes sense to refinance back to one loan. Good luck.
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