If you pay attention to the housing market, you will hear when it is and isn’t a great time to refinance your home. Taking advantage of the right opportunity could help you lower your monthly payment and the overall amount you end up paying the bank.
But how often should you refinance? Let’s talk about it.
What is a Refinance?
Refinancing your property means that you are replacing your current loan with a new one. It does not mean you are just redoing your current mortgage. You may choose to work with the lender you currently have or any lender of your choice. When you refinance, a new mortgage will be issued with the condition that the old one will be paid off and satisfied.
Sometimes the market conditions when you buy aren’t as good as you’d like them to be. If things get better down the road, the opportunity to refinance could present you with quite a few advantages.
There are many different reasons why property owners make the decision to refinance. A few of the most common include:
Adjusting the term of your loan
Getting a lower interest rate
Removing your private mortgage or mortgage insurance premium
Depending on your current loan and the current market, you should consider whether refinancing could help you meet these or other financial goals.
How Often Can You Refinance Your Home?
You can refinance your home as often as you’d like. However, it only makes sense to do so when it is financially beneficial to you.
Keep in mind that there may be certain restrictions with different loan types - especially when it comes to waiting periods between refinancing. For instance, if you have an FHA loan, depending on the type of refinance you want, you could be required to wait for a total of 7 months (or 210 days) between doing so. It is always a good idea to gain an understanding of the conditions set forth by your loan.
Be sure to do your due diligence and make sure the time is right before you go through the hassle to refinance your home. After all, there are fees associated with each refinance that you will be responsible for paying which means refinancing too often could become quite costly.
Do You Need Title Insurance for a Refinance?
There are two types of title insurance - an owner’s title insurance policy and a lender’s title insurance policy.
When you purchased your Florida property, you would have purchased owner’s title insurance. Its protection will last for as long as you or your heirs have an interest in the property - despite how many times you refinance.
The lender’s title insurance policy, on the other hand, protects the lender based on the specific loan you took out. When you refinance, you are satisfying the first mortgage and getting a new one. That means you are closing out the old title insurance policy - and your new loan will likely require a new one.
Ready for some good news? When you refinance, you are given the opportunity to receive a discount known as a reissue credit. You will supply the title company handling the refinance with a copy of your owner’s title policy. In turn, they will issue a credit ranging from $100.00 to $1,000.00 (or more) depending on the policy amount.
Simply put, be prepared to purchase a new lender’s title insurance policy when you refinance - and don’t overlook the reissue credit.
Enjoy a Hassle-Free Refinance at Haven Title
If you have made the decision to refinance your property, you need a title team that can provide you with a smooth, streamlined experience. And that is what you will find with the title experts at Haven Title.
To learn more, contact us today at (813) 699-3054.