Mortgage refinance, Miami, FL is one of the biggest decisions homeowners can make; thus, it is imperative that all of the important considerations are taken into account before accepting any deal from a mortgage company. But what are these considerations? What are the factors to consider to ensure that decision you make works in your favor?
The interest rates have gone down. According to the authority (the White House, specifically), the average homeowner could save USD 3,000 annually by refinancing their mortgage. With that savings, refinancing is indeed a thing to consider. But, homeowners should make sure that they get a steal of a deal.
Your credit score is a lot better now than before (or has improved significantly from your previous one). If your credit score has gone up, you can take advantage of that to qualify for a lower payment on mortgage; that is true even if the mortgage rates have not gone down. The reality is, current mortgage rates can vary by as much as 1.5% based on your credit score. As for example, on a USD 300,000 mortgage, a 1.5% higher mortgage rate due to a poor credit score could translate to additional USD 250 monthly mortgage payment. (Try using myFico’s mortgage savings calculator to figure out the example given)
Converting an ARM to a fixed rate mortgage. This is another yet a good reason to refinance a mortgage. This is specifically applicable when the interest rates on mortgage are expected to increase in the near future/in the coming years. With refinancing, you can convert your adjustable rate mortgage into a fixed rate mortgage in order to ensure that you are not affected by increasing interest rates.
When you need to lower your monthly payment. If you want to lower your monthly mortgage payment for some reason, refinancing your mortgage can be a great option. For instance, after paying your 30-year fixed mortgage for 10 years, you can refinance your outstanding balance back to a 30-year fixed rate mortgage at a lower monthly payment, even if there are no changes in interest rates.