The subject of refinancing your mortgage is always interesting as there are so many different options to choose from. But, before you enter into a refinancing agreement with a Florida mortgage company, you must consider the reasons why you are thinking about refinancing your loans in the first place.
This article will provide a few specific reasons why you should consider refinancing your mortgage to make sense of it all.
Refinancing your Mortgage
Dropping Your Rate
Many homeowners take out a loan with a variable interest rate because it starts low but can go up in the future. You can only get a variable loan by paying for points, which gives you a lower rate but costs more money upfront. You may get tired of living with steep interest rate changes and decide to refinance your mortgage rates in Florida using a fixed-rate plan instead.
Cutting Cost
Some homeowners are willing to pay more money on their mortgage each month to save money in the long run. However, a refinance can help you cut your interest rates and monthly payments, which will cause you to spend less on your home loan over time. You may also choose a shorter term with a lower monthly payment or an adjustable rate that starts low and rises over time.
Converting your ARM to a Fixed-Rate
If you want even more savings, you can refinance into an ARM and then convert it to a fixed-rate plan before the expiration of the introductory period. This way, you get the benefits of an adjustable loan while still having security in knowing what your monthly payments will be for at least a certain amount of time.
Getting Cash for Other Purposes
You may be refinancing to get money for other purposes, such as buying a new car or consolidating your debt. This type of Mortgage is sometimes referred to as an equity loan because you are repaying the existing balance at a lower rate and then using that same amount of money elsewhere. You can also use this cash if you decide to use your ARM for other purposes.
Steps to Refinance your Mortgage
The first step is to check if you qualify for a mortgage refinance in Florida. You should meet specific criteria to make yourself eligible for a refinance plan. Your loan amount, credit score, and debt-to-income ratio will all be considered when your lender decides whether or not you will qualify for the mortgage you want.
You should also check with your current lender to see if they have any incentives available for existing customers who want to refinance. If you are not happy with what they are offering, be sure to check with other mortgage companies to compare loan quotes.
Once you have decided that you are ready to apply for your new loan, you will have to provide all the relevant financial information about yourself and your home. Your Florida mortgage lending company may use this information to determine your eligibility for refinancing, how much you can afford to pay each month and whether or not you can make the payments. Therefore, it is essential that you provide accurate information, even if it means gathering all of your necessary documents.
You may be required to pay an application fee for your refinance plan. If your loan with the new lender is approved, this will be deducted from your closing costs at the time of closing. It is usually non-refundable, so do not pay this fee unless you are sure your loan is going to be approved.
Once you have everything in order, you will need to sign all necessary documents. This includes the promissory note (which lays out the terms and conditions of your loan), legal disclosures, closing statements, and any other paperwork required by law. All parties involved in the transaction should sign all of these documents.
Even after you have signed your new contract, you are not entirely done with the refinance process. You still need to schedule a closing date and be present at this appointment. If you cannot make it, you may be able to reschedule or authorize someone else to sign the documents for you.
Once everything is signed, and your Florida home loans have been funded, your new lender will give you a check that reflects the total amount of money you owe on your Mortgage. At this point, it will also update all of your pertinent information so that you have access to all of your new accounts with an updated account number and payment information.
If you stay on top of all your obligations, your refinance plan should be just as easy and hassle-free as your original Mortgage. However, if there are any issues or problems along the way, it is up to you to resolve them. You can do this by dealing with the Florida mortgage lenders directly or by consulting a third-party mediator.
Should You Refinance?
The first thing you need to do before looking into mortgage refinance options in Florida is to determine the cost of refinancing and whether or not it will save you any money. If the interest rate on your current Mortgage is lower than what you can get by refinancing, then refinancing will probably not be worth the hassle.
However, if refinancing offers the chance for you to lower your interest rate, then it may be worth considering. In addition, if you can save just a few hundred dollars each month, the savings may add up over time so that you have enough money to buy new furniture or put towards an emergency fund for unexpected expenses.
You should also look at how long you plan on staying in your home. In general, the more time you have before you plan on selling or moving out of your home, the more worth it refinancing becomes.
If you will be staying in your home for a few years and at least one year has passed since you first closed on your Mortgage, then this is an excellent time to consider refinancing.
Conclusion
Refinancing is not something you should jump into without giving it some thought. If you are considering taking out a new loan, the last thing you want to do is take on more debt than necessary.
Deciding whether or not refinancing is for you will depend on how much money you could save and how long you intend on staying in your home. Remember that refinancing can be just one part of your overall financial plan, so think about your financial goals before signing any new Florida home loans.
Whether you are looking to lower your monthly payment, simplify things with one loan, or just want to explore all of your options before applying for refinancing, talk to the trusted and experienced Florida mortgage lenders today. They will determine what options are best for you and help you get a lower rate on refinancing your home.
