FL Refi: Low Mortgage Interest Rates
How to Refinance your
Fl Mortgage Loan
When you’re ready to refinance your Fl mortgage loan, make sure you get every step right. Here are 9 tips to help you.
1. Shop around for your Fl Refinance
Always shop around. Your current lender may not offer the best option for you. Compare offers from several mortgage lenders. Consider their rates, fees and other terms and conditions. Choose the option that will work best for you.
Let your current lender know that you are shopping around to make sure they offer you their best deal. Even if you do refinance with your current lender you will need to update your current financial situation to qualify for your new loan.
2. Get a written rate lock
Make sure any verbal rate lock promises are confirmed in writing. This should include your interest rate, length of rate lock and the other details of the loan program.
3. Get a Good Faith Estimate
Your potential new lender should give you a Good Faith Estimate of closing costs within 3 days of receiving your loan application. Check for hidden costs such as a document preparation fee or notary fee etc. This will allow you to compare the true costs of the loans provided by each mortgage lender.
4. Automated Valuation Model
You may be able to avoid paying for a formal appraisal. Ask your current lender to determine your home value by using the automated valuation model (AVM). This takes into account the value of similar homes in your neighborhood.
This appraised value of your home may be enough to support your mortgage refinance.
5. Calculate your break-even period
When you refinance you’ll have to pay closing costs. Divide your closing costs by the amount of money you will save on your new monthly payment. This will show you how long it will take to break even.
Example: If it will cost $4000 to refinance a loan that will save you $400 per month, you can break even after 10 months – smart! But if it costs you $4,000 to refinance a loan that will only save you $40 per month, it will take you 100 months to break even.
6. Confirm your break-even period will expire before you intend to move
Compare your break-even period with how long you intend to stay in your home. If you think you will move before you break even, it probably won’t be worth refinancing your loan. Ideally you will stay in your home for longer than your break even period. This means that you should save money on the mortgage lending costs and refinancing may be a good choice.
7. Get pre-qualified for the loan
Decide on the type of mortgage
Consider the factors that might influence the interest rate on your loan:
Your credit score.
Loan amount.
Number of points paid.
Lock-in-rate.
8. Check loan documents
Give yourself plenty of time to check the loan documents before signing them. Make sure you understand the terms and conditions. Get answers to any questions you have before you sign them. What appears to be the best deal may not be once you understand the small print.
9. Closing
On closing you’ll have to sign the loan documents and the mortgage note. And you will have to pay for the closing costs and any prepayment penalty.
Follow these tips for FL refinance and you’ll avoid making the common mistakes when switching to your new loan.