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Long Term South Florida Residents Could Save Money with a Refi

By Joe Taylor Jr.
Local Lender Columnist
Aug 11, 2006
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Rising interest rates underscore the opportunity to lock in a low mortgage rate with a refi. The blistering real estate market in South Florida still makes real estate a solid investment. Refinancing your mortgage now could lower your monthly mortgage payments if your home's value continues to appreciate.

Appreciating South Florida Homes

Recent economic figures show that real estate markets nationwide are cooling off. In some areas of South Florida, where home values have appreciated more than 40% in a year, economic forecasters predict that price hikes will level off to single digit increases. Those conditions still aren't ideal for buyers, so a refi may be a better option than buying another house in South Florida.

If your mortgage rate is at least two percent higher than the current rate, a refi could be a wise decision. If your mortgage has an ARM that is about to end, refinancing to a fixed-rate mortgage at a lower rate will ensure lower payments for the long term.

Key Questions About Your South Florida Refi

There are some questions to consider before pursuing a refi.
  • Will lenders charge you points or a percentage of your mortgage to refinance for a lower rate?
  • Is it worth it to accept a slightly higher mortgage rate instead of paying closing costs?
  • Can you use a refi to lower your payment and get some cash out based on your home's equity?
If you're tempted to sell your house to take advantage of the high housing prices in South Florida, you may want to hold back. It could take three years to recoup your costs, so consider a refi if you expect to stay in your house awhile.

Sources
AppraisalInfo.com
Auburn Journal
Miami Herald
St. Petersburg Times

About the Author
Joe Taylor Jr. has covered business and finance news for Financial Times Television and CNBC. He coaches beginning mortgage brokers to provide better customer service and to understand creative financing opportunities.