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  • Refinance mortgage rates in Florida (FL)? What you need to know

    As refinance mortgage rates in Florida (FL) continue to change, refinancing can become a relatively easy way to reduce overall interest rates for many homeowners.

     

    Florida was one of the states to be the most affected by the housing crisis in America. During the peak of the bubble’s impact, median housing prices in Florida had decreased to $125,000. Though the recovery was sluggish, Zillow estimates home values to average around $209,000 but 2018.

     

    As the housing market bounces back, interest rates are beginning to rise, too. The Federal Reserve lowered the rates during 2012 to accommodate the market’s demise, and while they remained low and stagnant for about five years following the collapse, now they are beginning to slowly pick up again.

     

    This means refinancing in Florida – soon – might be a smart decision for many homeowners. As market values pick back up, it may be that your home is worth more now that when you purchased it. It also might mean that your interest rate is significantly higher than the current value.

     

    Finding the best refinance rates in Florida

    Reduced interest rates on a current home loan can mean a lot of things: lowered monthly payments, less expense over the life of a loan, and additional cash available for other expenses such as remodeling, renovation, home decorating or even everyday expenses.

     

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    Refinance mortgage rates in Florida are offered under a variety of different terms, depending on the individual bank or mortgage company. For example, an FHA loan will provide different terms from a refinance arranged through a local bank or mortgage broker. These terms could involve the overall length of the loan, changes in interest rates, whether an individual loan can be transferred to another company, and other elements that can affect how the loan will be handled and/or paid as it matures.

     

    The most common types of refinancing products are as follows:

     

    Fixed rate: The interest rate will not change over the life a loan with a fixed-rate mortgage. Refinancing with 10, 15, 20, or 30-year terms are popular options with a fixed rate. The longer the term, the lower the monthly payment.

    Adjustable rate mortgages (ARMs): For homeowners that are nearing the end of their purchase loan, or plan to move soon, ARMs might be your best bet. ARMs come with low interest, initially, then rise or decline with the market value. The uncertainty of life of loan costs associated to ARMs make them a smart short-term play.

     

    FHA or VA: These government-backed loans are great options for many homeowners. If you have a subpar credit score, your loan to value ratios, or debt to income ratio aren’t strong enough to get you qualified for a conventional ARM or fixed rate, these products can help you refinance.

     

    Jumbo loans in Florida are also available. If your property is more expensive than what conforming loan limits will lend for, you might consider a jumbo mortgage.

     

    florida refinance mortgage rates FL

    Florida refi opportunities abound. Take advantage of the low rates today (Photo/Pixabay)

     

    Comparing Florida refinance rates, by lender

    Although refinancing rates at Florida banks and mortgage companies will be similar, it can pay to shop around before making a final decision.

     

    If you already have a loan taken out from one lender, ask them how refinancing through them will benefit you. Often, lenders don’t want to lose your business, so they will offer new incentives to keep you on board. This could mean a streamlined process where the borrower won’t need to complete expensive paperwork or redo their appraisal.

     

    Consider a local bank or a credit union. The smaller the financial institution the more valuable the customer. Local banks and credit unions might have slightly lower interest rates than regional banks, and may also offer more attractive loan terms to earn your business.

     

    If you are having a difficult time finding a lender or determining which product is best for you, consider working with a mortgage broker. Though brokers do charge a small fee for their service, they have the knowledge and connections to help you land the best deal possible.

     

    As with any major financial decision, taking the time to compare refinancing loans can save money and decrease the likelihood of additional financial burdens or surprises down the road.

     

    Evaluating a refinancing home loan

    A common myth about refinancing is that the lowest rates mean the best option. This is not true.

     

    If your current mortgage is $200,000 with six percent interest, and your monthly payment is $1,199, then in six years you’ll have paid $69,131 in interest.

     

    If you’re considering refinancing to a 30-year fixed rate, at five percent (you secured a lower interest rate) what does the mean for the total cost of your loan?

     

    Your monthly payments will drop to $981. But over the life of the new mortgage, you’ll pay $170,468 in interest. Including the interest you’ve already paid. The total interest for your refinancing decision will be $239,599, over $7,000 from your original loan terms. In this case, you’ll wind up paying more through a refinance than sticking with your original loan.

     

    Additionally, when you refinance in Florida, remember to compare elements such as closing costs, points, the length of the overall loan and any other terms the lender might place upon the final contract. Always calculate the break-even point of your refinance to make sure the terms fit your financial plans. If your loan will end soon or if you plan to move, you need to ensure you’ll still be around to reap the benefits of your refinance.

     

    Here is how you calculate your break-even point:

     

    Total cost of refinancing / total monthly savings from refinancing = the number of months it will take to break-even. In other words, if you have $6000 in closing costs and save $300 each month it will take you 20 months to break-even.

    Regardless of what kind of loan a Florida homeowner is considering, it is vital to be sure the contracts and the requirements of the loan are clear. Misreading or not understanding a mortgage contract can lead to serious issues in years to come. Take the time to contrast and compare options, and to understand the final contract before finalizing any refinancing arrangement.

     

     

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