When to Refinance a Miami Mortgage
Refinancing a Miami mortgage is a very good idea every time you wish to consolidate debts or reduce your interest rate. It may also be a very good idea when changing financial conditions makes it hard to meet the monthly payment.
By refinancing the loan to one with a longer term, you can lower your monthly payments considerably. Usually, you might want to consider refinancing every time you can lower your rate by more than ½ a point. If you refinance for under than ½ a point difference, the charges of the new loan will not be covered by the savings experienced from the lower interest rate.
You may also want to refinance your Miami mortgage for one with a shorter life so that you pay off your house soon by building up equity faster. With shortened life, the loan will be paid off quicker and the total interest paid will be lower.
An additional common reason to refinance your Miami Beach mortgage is to get the funds required to do home improvements or to pay out big debts. To do this, you must have enough equity in your home to get the necessary cash out.
Home owners also refinance their ARM loans to prevent rate increases. ARM’s (also called ATM’s) have started to be very widely used in the last five years because of their flexibility. The challenge with ARM’s is that after a couple of years, there is a recast of the loan and the monthly payments tend to suffer a big hike.
If you plan to live in your home for a long time, you might prefer to refinance your Miami mortgage with a 30 year fixed-rate loan. With a fixed rate, you obtain the predictable payments during the loan term.
If you plan to move within the next few years, you might prefer to think about obtaining a new ARM. Usually, ARM’s start with a lower interest rate and may match your financial objectives better.
If you desire to have a good idea of what is the best kind of Miami mortgage loan for you, you may contact me and we’ll look at your present loan and your financial goals to find the right mortgage for you. We’ll study factors such as:
- The lowest interest rate available
- How long do you wish to take to pay your loan
- Are you planning to increase your earnings in the coming years or will they remain constant
- The tax implications of your new Miami mortgage
Also, remember that refinancing is a good idea when you are expecting to stay in the property for more than 2 years. If t’s not so, the cost of refinancing a Miami Beach mortgage will not make it worthwhile.
