How to Lower Monthly Florida Mortgage Loan Payments Through Refinancing

Have you been thinking about Florida home mortgage refinancing? Many people are doing so in the current market because interest rates are low. This could be a good time to lock in those low rates.

Moreover, numerous borrowers simply want lower paymens every month. It’s hard to blame them for this. With that in mind, let’s take a closer action at how you can refinance a Florida home loan to accomplish this goal.

Are there any risks with this course of action?
Yes. While you can save in the short-term by reducing your monthly payments, you may pay more in interest payments over the long-term if you extend your loan term and pay your mortgage off more slowly. There may also be financial penalties associated with a mortgage refinancing. Find out if there are - and whether the gain on the refinancing is greater than the cost.

Extending the term
One way to cut down on your current bills is to extend the term of your Florida mortgage. For example, if you extend the term of a $100,000 mortgage at 6.25 percent interest from 15 years to 20 years, you could reduce your monthly payments by $126.49. But you will also end up paying an extra $21,086 in interest charges. Only you can decide if that’s an appropriate trade-off.

Lowering the interest rate
In the case of a $100,000 mortgage amortized over 30 years, you could reduce your monthly payments by $47.91 by refinancing from a 6.25 percent interest rate to a 5.5 percent interest rate. Plus, you’ll save $17,253 in interest charges over the life of the Florida home loan.

Combining options
It may be possible to change both the term and the interest rate of your mortgage in order to lower the rate. Start by finding or negotiating the lowest possible Florida mortgage rate, then calculate the term that brings your payment to a level that is acceptable to you.

Arranging a payment holiday
Some mortgages allow you to take a payment holiday. If your financial bind is likely to be only short-term, ask your lender if you can arrange a temporary suspension of payments.

Refinancing with an interest-only mortgage
You can reduce your monthly payments to the least possible amount by refinancing with an interest-only mortgage. The downside is that when the typical five- or 10-year interest-only period expires, your payments will increase considerably. This option is, therefore, only worth considering if you are experiencing a temporary financial squeeze but expect your finances to pick up.