FL Refinance

2010-05-04T06:28:00.000-07:00

Guide To Refinance in Florida

When it comes to FL refinance the first thing that you need to know is when is the best time to refinance your mortgage and what you need to know about refinancing. The main reason people will look at this option is to save money each month on their mortgage payments but it is not as simple as this. There are a number of things that you need to look at first because there are often time where the fees that you pay are too high or the break even period is too long to actually make your Fl refinance mortgage worthwhile. In this article you will find all the information you need to help you make your decision and follow it through.

Below are some questions that you need to ask if you want to lower your monthly repayments and avail of a lower mortgage interest rate.

Is There A Lower Rate Of Interest Available For Your Fl Refinance?

When checking rates etc you really need to look at the monthly savings that your remortgage will give you. You should be looking at a monthly payment decrease of between $125 and $150 if you want to break even on your costs within a 2 to 3 year period. The old 2% rule no longer really applies so bear this in mind when looking at the Florida interest rates on offer.

Are You Planning On Staying In Your Home If So A Fl Refinance Is Not For You

If you are looking at refinancing your mortgage then you need to be planning on staying in your home for the long run. If you are planning on moving in the next five years then a refinance on your mortgage might not be the best idea.

What Closing Costs And Fees Are You Likely To Face On Your Fl Refinance

Closing costs are an essential part of any refinance so you need to take these into consideration when making your decision. Will your savings actually offset these costs? You need to understand all these costs and then workout everything including your break even period.

What Is Your Current Mortgage?

The next thing to consider when it comes to a Fl refinance is the type of mortgage you currently have. Most people who have Adjusted Rate Mortgages (ARM) will choose to refinance and opt for a Fixed Rate Mortgage (FRM). This means that their monthly repayments will be fixed.

What About Your Private Mortgage Insurance (PMI)?

When you were getting your mortgage you probably had to take out private mortgage insurance to qualify for your loan. If you currently own more than 20% of the equity in your home you will probably be able to stop paying this private insurance. You might also be able to stop paying this if you refinance and this in turn will also save you more money.

Do You Have Unsecured Debts – A Fl Refinance Could Help

Getting a refinance on your mortgage is all about saving money and many people use this option if they have unsecured debts such as credit cards. The interest charged on these cards can be very high and therefore a lot of people choose to pay them off with their refinanced loan. Debt consolidation is another reason why many people choose to look at remortgage options.

As you can see, refinancing is often a great option especially with today’s low interest rates. A Fl refinance is a great way to reduce monthly repayments but the question now is how to go about this.

How To Get A Fl Refinance

If you have made the decision to refinance your Florida mortgage then you need to make sure that you do it right. In this section of our article we will cover all the necessary steps that you need to take.

Shop Around For Your Fl Refinance

This is probably the most important step. You need to shop around. Your current lender may not have the best option for you so you need to compare several different mortgage lenders. To do this you will need to consider their rates, fees and their terms and conditions. Make sure you go through everything and choose the option that will work best for you. It is also worth mentioned to your current lender that you are shopping around because quite often they will offer you a better deal.

A Written Rate Lock Is Important

Whatever rate locks you get make sure you have them confirmed in writing too. This written confirmation should include the interest rate, length of the rate lock and the loan program details.

Get A Closing Costs Estimate

The lender you choose to go with should be able to offer you a good faith estimate of the closing costs within 3 days of receipt of your loan application. You need to check through this for any hidden costs. These can include document preparation fees, notary fees, etc. You need to be able to compare the true costs from each mortgage lender before you make any decisions.

Opt For An Automated Valuation Model

It is possible to avoid paying for a formal appraisal. You can ask your current lender to determine your home’s value by using the automated valuation model. This will take into account the current value of other homes in your neighbourhood. This valuation could be enough to support your refinance application.

Work Out Your Break Even Period

It is a known fact that when you remortgage you have to pay the closing costs. What you need to do is to divide the closing costs by the amount of money you will actually save on your new monthly repayments. This calculation will show you how long it will take for you to break even. You need to make sure that your break even period will expire before you move home. If you are intending to move home you need to make sure that your break even period has expired otherwise it is not worth refinancing.

Getting A Pre-Qualified Loan

There are a number of things you need to do to get pre-qualified for your refinance loan and the first thing that you will need to do is decide on the type of mortgage you are going for. Then you need to look at all the factors that might influence the interest rate on your loan. These can include your credit score, the loan amount required, the number of points paid and the lock in rate.

Go Through Your FL Refinance Loan Documents

Don’t rush into signing anything. The first thing you need to do is to give yourself time to completely check over the loan documents. Make sure that you understand all the terms and conditions and ask any questions that you might have before you put pen to paper.

Closing On Your Agreement

When you are closing on your Fl refinance you will have to sign the loan documents and the mortgage note. You will also have to pay the closing costs at this stage and any prepayment penalty from your existing mortgage.

Now that you know the ins and outs of remortgaging your Florida mortgage the next thing that you need to do is figure out just how much you can save and then start getting your FL refinance sorted.