Mortgage dilemma- How do I refinance a 2nd mortgage when I don't have much equity?

Unfortunately, there's not a whole lot you can do.

Lenders will normally go up 80% of the value of property. Going beyond (90%, 95%, even 100%) is possible...but the lender will normally require you to get mortgage insurance...which is expensive, useless, and not tax deductible.

This is why most people do a 80-20 split with the first 80% being their first mortgage, and remaining 20% in a second mortgage. Once they've paid things down a little, it's normally possible to recombine the 2 mortgages back into a single standard mortgage.

Unfortunately in this wacky economy, there aren't many banks willing to do a 2nd mortgage anymore, and even those few that are, are going to be very picky.

If you really have no choice, you'll have to see about recombining the mortgages, and then taking out a mortgage insurance policy. Hopefully when house prices go back up, and you've paid the mortgage down a bit, you'll be able to refinance again and get rid of the mortgage insurance.

You have to look at the whole picture. If you have your mortgage loan for long time and had paid most of the interest, refinancing means you start over again to pay those interest plus closing cost. How much are you gonna need for your home repair? If it's a small amount like $5k to $30k, you may want to lend from your HELOC instead because it's a interest only and very flexible with payment. You can pay extra each month to bring it down in few years. Its interest rate usually lower than a 30 years loan. Bank of America is about 4.5% and no closing cost at all. Check it yourself and do the calculation. Most of the HELOC interest you paid is tax deductible. Usually after 15 years it will turn to a fixed rate or you can refinance to a fixed rate any time you want.

I just don't see this happening. You MAY be able to get an FHA or a single standard, but that's going to be with a pertty serious interest rate and PMI.

Most seconds, which are usually HELOCs or HE Loans, won't go above 75-80%. 95% just isn't going to happen with a piggyback refi.

Really what you guys need to do is get a lawyer who can help you get her name off the mortgage and you need to start throwing money at this mortgage to get it down to 80%.