Refinancing a Miami mortgage is a very good idea every time you want to consolidate debts or lower your interest rate. It can also be a good idea when varying financial circumstances makes it hard to pay the monthly payment.
By refinancing the mortgage to one with a longer term, you can decrease your monthly payments substantially. Usually, you may want to think about refinancing every time you can lower your rate by over ½ a point. If you refinance for under than ½ a point difference, the charges of the new loan won’t be covered by the savings realized from the lower rate.
You may in addition want to refinance your Miami mortgage for one with a shorter life so that you pay off your home soon by building up equity faster. With shortened term, the loan will be paid quicker and the total interest charges paid will be lower.
An additional common reason to refinance your Miami mortgage is to get the cash needed to do home improvements or to pay out big expenses. To do this, you must have sufficient equity in your home to get the needed money out.
People also refinance their ARM mortgages to prevent rate increases. ARM’s (also called ATM’s) have started to be very popular during the last few years because of their flexibility. The problem with ARM’s is that after a few years, there is a recast of the loan and the monthly payments tend to suffer a large hike.
If you expect to live in your house for a long time, you might prefer to refinance your Miami mortgage with a 30 year fixed-rate loan. With a fixed interest rate, you get the predictable payments throughout the mortgage term.
If you are thinking of moving within the next couple of years, you may want to consider obtaining another ARM. Most of the time, ARM’s start with a lower rate and might fit your financial goals better.
If you desire to get a good idea of what is the best kind of Miami mortgage loan for you, you can call me and we will look at your current mortgage and your financial goals to arrive to the best mortgage for you. We will look at things such as:
- The lowest rate available
- How long do you wish to take to pay your mortgage
- Are you planning to increase your income in the coming years or will they remain constant
- The tax implications of your new Miami mortgage
Also, keep in mind that refinancing is a very good choice when you are planning to stay in the house for more than 2 years. If t’s not so, the cost of refinancing a Miami Beach mortgage won’t be recouped.
