When It Pays To Refinance Your Florida Mortgage — Literally

For those of you that have been hiding under a rock for the past decade, to refinance a Florida mortgage means to pay off your existing loan and replace it with a new one.

There are many reasons why homeowners opt to refinance; obtaining a lower interest rate, shortening the term of the loan, switching mortgage loan types, or tapping into home equity to make home improvements or to consolidate high-interest debt..

Each has its considerations:

Lower Your Florida Mortgage Rate
Among the best reasons to refinance is to get access to lower mortgage rates. Unlike the common misnomer that your rate should drop 2% or more for a refinance to make sense, there is simply no “rule of thumb” that says how far rates should drop for a refinance to be sensible. Compare your closing costs to your monthly savings, and determine whether the math makes sense for your situation.

Shorten Your Loan Term
Refinancing your 30-year fixed rate mortgage to a 20-year fixed rate or a 15-year fixed rate is a sensible way to reduce your long-term mortgage costs, and to own your home sooner. As a bonus, with mortgage rates currently near all-time lows, an increase to your monthly payment from a shorter loan term may be negligible, giving you an opportunity to pay off your loan sooner without sacrificing financially on a monthly basis.

Convert ARM To Fixed Rate Mortgage
Homeowners with adjustable-rate mortgages may want the comfort of a fixed-rate payment. Florida mortgage rates for fixed-rate mortgages are often higher than for comparable ARMs so be prepared to pay more to your lender each month; although in today’s market, with Florida rates being so low, it almost always makes sense to choose a more secure, fixed rate.

Access Equity For Projects, Debts, Or Other Reasons
Called a “cash out” refinance, Florida homeowners can sometimes use home equity to retire debts, pay for renovations, or use for other purposes including education costs and retirement. Lenders place restrictions on loans of this type.

A refinanced home loan can help you reach specific financial goals or just put extra cash in your pocket each month — just make sure that there’s a clear benefit to you. Paying large closing costs for small monthly savings or negligible long-term benefit should be avoided.

Many lenders offer low- or no-closing costs options for refinancing.  And just in case you were wondering, YES we can help you even if your Florida mortgage is underwater!  For more information please click here.


About the Author

Jason Gonzalez

Jason is a lifelong student of the mortgage industry that prides himself on his innovative ability to consistently find the best deals for his clients. With well over a decade of industry knowledge and experience, you can trust that he will help guide you in the right direction for your home financing needs. What separates Jason from everyone else is the fact that he cares so much about the people he helps, driving him to go above and beyond to make the dream of homeownership possible for all.

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