An Accurate Perspective on Florida Refinance Mortgage Rates
There are many reasons to refinance a home. These reasons might be to take advantage of decreasing interest rates, to decrease the cost of monthly payments by increasing the length of the loan, or to decrease the number of years before you own your home. Or maybe you just want access to some of your home’s equity.
But is refinancing a wise decision for you?
A logical reason to refinance in the current economic climate would be to move away from an existing adjustable rate mortgage. Some of these adjustable rates have included a monthly mortgage payment that has been increasing over time, and the homeowners have lost too much of their disposable income toward house payment. They are now looking for a fixed rate and a house payment that fits more easily within their budget. More about the best mortgage rates in Florida.
Another good reason to refinance would be a decrease in Florida refinance mortgage rates. It was not that long ago that interest rates of 10%, 12% or even more were not unheard of. At that time, homeowners were advised to wait for a drop of two or more points before refinancing.
Â
Single-family home mortgages in Florida are averaging 5.5% to 6.5%. With these lower rates, the old rules no longer apply. A decrease of one point from a 6% loan is the equivalent of two points from a 12% loan. That’s 12% off the cost of the mortgage – and that is figured over the course of your loan. This may be significant if you owe a great deal of money on your home. If you only owe another $10,000 – then not so much.
But even a significant decrease in interest rates may not make refinancing a wise option. You have to consider the number of years you plan on living in your current home and the total cost of refinancing. Refinancing costs can be based on points or a flat fee. Whether you will recoup the money you invest in refinancing is a function of how much longer you plan on living in your home. You can use a Florida mortgage calculator to determine this.
Using the Equity in Your Home
There is another kind of finance rate that you can decrease with your home’s equity. You can use the equity in your home to pay off credit card debt, which is often two or three times higher than the rate you will get on a home equity loan. Even if you don’t have a significant amount of debt, a home equity loan is a convenient way to have access to cash for financing home improvements.
Read more about the best mortgage rates in Florida.
Comments
Sorry, the comment form is closed at this time.
No comments yet.