There are several factors to consider when you are planning to refinance your mortgage. Mortgages in Florida offer you a lot of options and reasons to refinance your home.

But first, what is refinancing?

When you refinance your mortgage, you take out a new mortgage even while you still have an existing mortgage on your home. It is like trading your old mortgage for a new one. The old mortgage will be paid off by the proceeds of your new mortgage, leaving you with just the new mortgage to pay off.

Benefits of refinancing

Most of the time, homeowners refinance their home because the current interest rate falls below the original interest rate of their first mortgage. This allows the homeowner to pay a lesser monthly fee and save a significant amount of money over the life of the loan. But it is very important to assess if the overall savings is much greater than the cost of refinancing to find out if it is worth the effort.

Other benefits of refinancing include consolidating your first and second mortgage to a lower payment, getting cash out, getting advance repayment of debt, reducing monthly mortgage payments, getting more money monthly, canceling tax liens, and paying off nearing balloon payments

How to apply

Just like getting your first mortgage, you have to submit the required documents. Your credit file will be initially reviewed. The lender will re-assess your property and determine its current value. If all is satisfactory, a second mortgage will be approved and a new mortgage will then be signed. Proceeds of your new mortgage will pay off the old mortgage and other refinancing fees. You will only have the new mortgage to pay.

The costs of refinancing include document preparation fees, tax service fees, points to secure the loan, appraisal fees, title expenses, and other costs incurred by the lender.