Are you wondering if you should refinance your Florida mortgage? Refinancing
your mortgage can seem like a good idea when the interest rates drop, but
there are many aspects to consider. Income taxes, closing costs, and other
items are also affected when you refinance.
It isn’t hard to figure out that lower interest rates mean more
money in your wallet. Yet, how low do the interest rates on your Florida
mortgage have to be in order to justify refinancing? A good rule of thumb
is that the interest rates be at least 2% points below your current mortgage
One reason you want to allow that 2% cushion is to cover the closing costs
and other fees associated with the refinancing of your Florida mortgage.
One alternative to refinancing your mortgage is to renegotiate your mortgage.
These are very similar, though technically not the same.
Renegotiating your Florida mortgage is when you are negotiating with your
current mortgage holder for a lower rate. This may not be as low as the
current rates or the rates that you may not be offered by other companies.
However, the rate may be lower in the end due to the addition of closing
fees which may not be charged through a renegotiation with your current
Another aspect that you need to consider is the affect on your income
taxes. Lower interest rates mean lower deductions. Lower deductions mean
higher income taxes. These higher income taxes may be offset by the lower
amount of your mortgage but you do need to take into consideration all
of the facts and figures.
Visiting with your accountant may answer many of your questions regarding
the refinancing of your Florida mortgage. You can also visit the IRS’s
website where you can find information on taxes and your Florida state
website where you can find information on Florida interest rates.