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Should You Refinance Your Mortgage: An Interview with Fern C. Burr of Mortgage Professionals of Central Florida, Inc.

By Fern Burr

Please describe the background of your company and some of your qualifications.

I have been a real estate broker since 1984 and a mortgage broker since 1990. I am also an active real estate investor, so I have a unique understanding of that segment of the market. As a real estate broker, I work with buyers and sellers and investors. As a mortgage broker and owner of Mortgage Professionals of Central Florida, we assist people with buying and refinancing properties. We offer the usual Conventional, FHA, and VA. We also have a niche product offering Private Lending (often known as Hard Money), for people that cannot get a traditional loan, either because of prior short sales or foreclosures, or because they are buying an "ugly property" to fix and flip.

How much equity do I need to have in my home before I consider refinancing?

Most lenders will want you to have 20% equity in your property. However, if you have NO equity, and are "upside down" in your loan-to-value, you may qualify for a HARP loan (Home Affordable Refinance Program).

My credit score isn't very high, will this affect my ability to refinance?

Most lenders want to see a 650. There are lenders that will consider a lower score. They may require more equity, and they may charge a higher interest rate.

What are the main reasons people choose to refinance their mortgage? Is refinancing the best option if I want to lower my monthly payments?

People refinance to pull cash out, for remodeling, or for personal expenses, like paying for college. Refinancing is definitely an option to lower your monthly payment, if you now have an interest rate that is at least 1 ½ - 2 percentage points higher than the rate you can currently get by refinancing.

Can I still refinance if I don't plan on staying in this home for a long time?

Yes you can, but should you? You need to look at the closing costs, and the monthly savings. If you don't "break even" in 24-36 months, it's usually not worth it.

Can I still refinance if I have a second mortgage?

Yes, but it is slightly more complicated. On a traditional refinance, you have two options. One is to combine your existing first and second into a new first mortgage. The second is to call your second holder and ask if they will sign a subordination agreement. That means that you can get a NEW first mortgage, and the current lender in second position will agree to remain in second position.

How can home mortgage refinancing affect my financial situation in retirement?

That depends. Some people believe that it is best to have your home FREE AND CLEAR in retirement, with no debt and no expense, other than taxes and insurance and maintenance. Other people believe that doing a cash-out refinance at today's low rates gives you liquid funds to invest for retirement income.

What are the risks associated with refinancing my home?

If you cannot make your mortgage payment, you risk losing the property in foreclosure. The primary risk is for someone who is going to have a major decrease in income during their retirement. For that person, it is probably best to avoid refinancing, and have a small mortgage, or no mortgage at all.

What is the best way for people to get in contact with you?

I am very accessible. We do not have voicemail, so you always get to talk to me or one of my assistants. Our Motto is "Modern Technology Combined with Old Fashioned Customer Service."

My office telephone is 407-330-2855. My direct email is Fern@cfl.rr.com. My website, where someone can fill out a loan application online, is www.Mortgage.Florida.biz.

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