Consolidating and Refinancing Mortgages in Hurricane Prone Areas

Now that the real estate market in certain areas of the Southeast have begun to decline in value, in part due to high insurance rates, the practice of refinancing mortgages may make the difference between being staying and leaving for many in the Coastal Southeast.  Even in inland cities such as Talahassee and Atlanta, very hot real estate markets have become relatively soft in recent months, making interest rates dip.  

Those who have taken higher rates to purchase their homes will certainly benefit in a declining economy and can stand to save hundreds, if not thousands) due to refinancing.  Mortgages that are high, and especially multiple mortgages taken out on very expensive homes, can benefit from a new, single loan, taken out a lower interest rate.  

These are typically available from a large, national/regional bank or a local lending institution such as the town bank or a credit union.  Rates will vary according to the term and size of the loan.  Your risk may also play a factor when a bank officer makes a loan offer for refinancing.  Mortgages offered can be adjusted by a limitless set of variables, depending upon the policies of the lending institution.  It's a good idea to ask them about the specific criteria involved.

These loans should reflect the current value of your home as closely as possible – a recent appraisal is useful, as are a few modifications around the home (such as shoring up the roof or windows) that can lower the potential hazard from storm damage.  Thus, the resale and appraised value is higher.  This property valuation will be useful if you choose to sell and will ensure you have enough value in your home to cover the refinancing mortgages, regardless of what happens to the market in the meanwhile.

An adjustable rate mortgage can seem like it will save a great deal of money.  However, in the long run and, especially in the hurricane-prone Southeast, it would be foolish to rely upon low interest rates to continue for the term of a loan.  Unless you intend to pay it off within 5-10 years, this plan could turn disastrous if the local economy is struck by a large storm.

After refinancing, mortgages with a fixed rate will continue to be paid at the same rate, essentially irregardless of the rate of inflation.  One can pay a mortgage with a longer term off ahead of time by doubling up on payments when you can while having a low “base rate” of payment, just in case things get rough.  Remember, no matter what, you don't want to loose your home.  Those who are compelled into refinancing mortgages can not only save money in the short term but, may also protect themselves in case of difficult times due to storm activity.

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