Property owners in the Sunshine State are turning to Florida refi in order to reduce mortgage payments or obtain cash for home improvements, college tuition, or to pay off high interest loans and credit card debt.
When borrowers enter into Florida refi they are taking out a new home mortgage loan. Therefore, borrowers should be prepared to provide financial records to exhibit they are credit worthy. Borrowers must also be financially prepared for upfront mortgage refinancing fees.
can encompass prepayment penalties, loan application and origination fees, property appraisals, home inspections, lawyer review, and closing costs. The average cost of mortgage refinancing ranges between $2000 and $7000. Much depends if prepayment penalties are assessed, along with home values and the amount of funds borrowed.
Florida property owners should take time to research the pros and cons of mortgage refinance to determine if this option is in their best interest. In order to qualify for a new loan, borrowers must have a solid credit history and good fico score, as well as the financial ability to repay the mortgage loan.
Another consideration of Florida refi involves home equity. Mortgage lenders typically require borrowers to have at least 5-percent accrued equity before refinancing can occur. Home equity is calculated by subtracting appraised property value from the loan balance.
Many Florida property owners have witnessed property values decrease by as much as 40-percent. In order to refinance mortgages, borrowers usually must obtain a home appraisal to determine current market value. This expense is paid out of pocket and is not included in lender refinancing rates.
Most mortgage lenders allow borrowers to obtain a broker price opinion (BPO) appraisal, which is more affordable than traditional property appraisals. BPO is conducted by mortgage brokers who either drive-by the property or conduct an internal inspection of the home. Drive-by BPOs are usually sufficient for borrowers entering into Florida refi, but the final decision is made by the servicing lender.
Many Florida real estate investors are engaging in mortgage refinance in order to reduce monthly payments and increase cash flow. Rental rates have significantly decreased in many areas of Florida hit hard by foreclosure. Investors often find mortgage refi allows them to remain competitive in the rental real estate market.
Florida refi isn't for everyone. Borrowers who have paid more than half of their mortgage loan payments probably won't witness financial benefit. Much depends on the terms of the loan and overall reduction of payment. Refinancing a home mortgage loan with less than 10 years of outstanding payments into a 30-year note would be financial suicide.
The Federal Reserve Board provides a comprehensive mortgage refinance guide via their website at FederalReserve.gov. Homeowners can download and print mortgage shopping worksheets, locate credit repair resources, review frequently asked questions, and gather tips for locating the best Florida mortgage refinance provider.
Refinancing mortgages can place your home at risk, so take time to understand the advantages and disadvantages before submitting a loan application. Start by browsing our Florida refi article library to locate information and resources about all aspects of home loan financing strategies. Also, subscribe to our mailing list to receive notification when new real estate and personal finance articles are published.
Published on July 07, 2010 at 02:33 AM