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.

Knowing when to refinance your Tennessee mortgage after bankruptcy can be difficult. Then again, there are times when a refinance is absolutely essential. Here are three signs in particular that you need a mortgage refinance after bankruptcy:

You Can't Afford Your Payment
If you struggle to make your mortgage payment on a monthly basis, you're in trouble. Getting a post-bankruptcy Tennessee mortgage refinance can help, especially if you can find a lower rate than you are current paying or better loan terms. Maybe you have an adjustable rate that isn't working out or a balloon loan that has suddenly come due; whatever the case may be, by refinancing, you are sure to free up extra money each month, making it easier to make your payments and pay off other debts in the process.

You Have a Double-Digit Interest Rate
If your interest rate on your current mortgage is in double-digits, it's time to get out of the loan. Mortgage interest rates in Tennessee are currently very low, averaging only 5.59 percent on a 30-year mortgage refinance. Even if you have a bankruptcy on your credit report, you should be able to find a single-digit rate that is more feasible than what you are currently paying.

You Need Cash
If you are in desperate need of cash to pay college tuition, consolidate debt, pay medical bills, or make home improvements, a post-bankruptcy Tennessee cash-out mortgage refinance can allow you to borrow from your equity and provide you with the money you need. Even if your credit score doesn't allow you to qualify for optimal rates, you will still be paying less on a loan secured with your home than you would on a credit card or other types of loan products.