We cannot deny that home refinance in Orlando, FL offers some benefits to many homeowners. For instance, locking in a significantly lower interest rate can mean thousands of savings. That said, you must be careful about whether or not to refinance your mortgage because you might end up losing rather than gaining from it. Remember, refinancing your mortgage has associated costs and fees, which can add up based on several factors.
To help determine whether or not a home refinance in Orlando, FL is right for you, consider answering the following questions:
How long have you been paying for your current mortgage? It does not make sense to go for refinancing if you only have – let’s say – about five years remaining in your 30-year mortgage. That is because, if you refinance, you could end up paying thousands more interest – even if the interest rate of the new mortgage is lower.
Does your current mortgage impose a prepayment penalty? You must check the loan terms of your present mortgage to ensure there’s no prepayment penalty. If there is, they will charge you a fee if you refinance because refinancing is paying off your loan before it’s due.
Are you out of equity? If the value of your home has significantly dropped and requires you to finance over 80% of your home value, you may end up paying private mortgage insurance each month to your lender. Your home-to-value ratio should be at 80% or less to avoid PMI.
What’s your credit score? As we know, the higher your credit score, the better the offer you can get, including when you refinance. It is worth noting that a 100-point difference in your credit score may result in thousands of dollars extra in interest payments for a 30-year mortgage. If you are not confident with your credit score, consider improving it before refinancing.
Online looking for a reputable mortgage company that offers home refinance in Orlando, FL? Talk to an expert at Homeplus today.