It is easiest to refinance when mortgage rates are low. Refinancing has certain up-front fees but may lead to reduced monthly payments. It may involve the existing mortgage company that retains your home loan or a new lender altogether. Florida Home Refinance Information including the costs and benefits of refinancing are provided in this article.
Factors to Review Before Refinancing a Home
The price of properties can affect your refinancing options. If real estate values declined from when you first closed on your loan, this might make refinancing a bit complicated. Lenders traditionally issue loans up to a certain percentage of the value of a home, based on an updated appraisal. If a loan principal exceeds that percentage, you might need to reduce your balance before a refinance. FHA mortgages (and some others) have the advantage of a streamline refinance that avoids appraisals. There are also options for home owners whose property values are below loan amounts because of declining market values. An experienced mortgage professional will assist you with evaluating different programs.
Mortgage Rate Variance
The general practice is to refinance when the mortgage rate drops at least 1% lower than the existing interest rate on your mortgage. The lower payment each month would make the up-front costs of refinancing worthwhile. Also, certain mortgage companies will not approve a refinance unless the savings is greater than a specific amount.
Fees and Other Factors
There are expenses that come with refinancing a mortgage. Examples are closing fees, lender charges, up-front interest, and mortgage insurance, just to list a few. The amount can differ with each lender and mortgage program. Understand these expenses before refinancing and compare it to the overall savings. Furthermore, know that you will have a gap between when your existing mortgage is paid off and the new payment is due, so those funds can be used for those fees.
Florida Home Refinance Information
Beyond the Florida home refinance information provided in this blog, also factor in how long you intend to reside in a home since the savings accumulates when summed up over several years. Mortgage rates are also affected by your personal finances, so consult with a local loan officer for details on your personal situation. The information here is generic and does not include things specific to your home or personal finances.