Weigh All Options for Refinancing in South Florida

By Allison E. Beatty
Local Lender Columnist
Jun 22, 2006
If you've owned your South Florida home for a while, you may be wondering whether your mortgage interest rate is too high. Find out if refinancing will give you a lower monthly payment or other benefits.

Many Refinancing Programs to Choose From

There are many competitive interest rates in the South Florida market. Begin the process by evaluating your current mortgage loan and financial situation. Do you foresee any significant changes in your income or expenses in the near future? If you plan to retire soon, for example, you might want lower monthly mortgage payments with a stable, fixed interest rate.

Fixed or Adjustable Mortgage Rate?

Another key consideration is whether you want a fixed or adjustable rate mortgage. Here are the differences:

• Fixed rate mortgages offer the stability of having the same rate for a set time, usually 30 years. These are ideal for those who like stability and are adverse to market fluctuations.
• Adjustable rate mortgages are designed to offer lower mortgage payments during the initial term. The interest rate then gradually goes up. With a "3/1" ARM, for example, you get a set rate for three years, then the rate goes up gradually every year after. The main downside to these mortgages is that they can work against you if rates rise in the future.

Refinancing to Take Cash Out

If your main goal in refinancing is to take cash out for home improvements or other expenses, then consider a mortgage refinancing aimed at those goals. There are many mortgage programs that allow you to borrow more than the traditional 80 to 85 percent of equity. This is particularly helpful in South Florida markets where homes have seen record appreciation.

Refinancing and Remodeling Loan in One

Another option is to refinance your first mortgage and take out a second mortgage for home improvement or other expenses. With home appreciation setting record levels in South Florida, this can allow you to access that equity.

There are many ways to refinance your existing South Florida mortgage and reach your financial goals. By shopping around with various mortgage lenders, both in person and online, you will get a good picture of how the process works.



About the Author
Allison E. Beatty is a syndicated real estate writer who has been writing columns for 15 years.