Reasons to Refinance a Miami Mortgage

Refinancing is a good idea every time you want to consolidate debts or lower your interest rate. It can also be a good idea when changing financial circumstances makes it hard to meet the monthly payment.

By refinancing the loan to one with a longer term, you can lower your monthly payments considerably. Usually, you may want to consider a refinancing every time you can lower your interest rate by over ½ a point. If you refinance for less than ½ a point difference, the cost of the new loan will not be covered by the savings realized from the lower rate.

You may also want to refinance your loan for one with a shorter term so that you pay off your home quickly by building up equity faster. With shortened term, the mortgage will be paid faster and the build up of equity will be accelerated.

Another popular reason to refinance your loan is to get the cash needed to do home improvements or to pay-out large expenses. To do this, you need to have enough equity in your house to get the necessary money out.

People also refinance their ARM mortgage to avoid rate increases. ARM's (also called ATM's) have become very popular during the last few years because of their flexibility. The problem with ARM's is that after a couple of years, there is a recast of the loan and the monthly payments tend to suffer a big hike.

If you plan to live in your home for a long time, you may want to refinance your mortgage with a 30 year fixed-rate mortgage. With a fixed interest rate, you get the predictable payments throughout the loan you may need.

If you plan to move within the next few years, you may want to consider getting another ARM. Most of the time, ARM's start with a lower rate and may match your financial goals better.

If you want to get a clear idea of what is the best type of loan is for you, you can call me and we'll look at your current mortgage and your financial goals to find the right mortgage for you. We'll look at things such as:

• The lowest interest rate available
• How long do you want to take to pay off your mortgage
• Are you planning to increase our earnings in the near future or will they stay flat
• The tax consequences of your new mortgage

Also, keep in mind that refinancing is a good idea when you are planning to stay in the house for over 2 years. Otherwise, the cost of the refinancing won’t be recouped.