Applying for mortgage refinance in Florida is a complex procedure. As complex, in fact, as applying for a first mortgage. Of course, a lot of things are changing, particularly since President Trump is promising to repeal and change a variety of rules and regulations put in place to protect banks and borrowers alike, including the Dodd-Frank Act, which means nobody really knows what is going to happen next. That being said, all loans, whether first mortgages or refinances, generally have to come with a down payment. So what are some acceptable sources for this down payment in Florida?

Mortgage Refinance in Florida Down Payment Sources

  1. Money you have saved up and hold in your bank account. If you have money in your account and you report this, then they will verify whether this money is really there. Usually, this is done by providing them with a statement of your bank account, which will show the money being there.
  2. Money that was gifted to you by someone else. That said, this will need to come with a letter from the person who gifted you the money to verify that they are happy for you to have this money and that they will not require you to repay the money at any point. Usually, this letter will have to be notarized for a lender to accept it. It must be signed by all parties, being the person giving the gift, and the person receiving it.
  3. Money that is borrowed against an asset with equity, including land, stocks and bonds, or other real estate. You could, for instance, take out a second mortgage and use that to pay the down payment. However, it is important that you’re very careful about borrowing money like this, because it instantly increases your debt ratio. The result is that you may not be able to borrow as much as you would have liked. Alternatively, you can borrow against your retirement 401k plan, but most lenders frown upon this.

Unacceptable Down Payment Sources

  1. Money that you have borrowed from friends or family members. This would go down on your file as an unsecured loan, and lenders do not like to see those types of loans against their borrowers.
  2. Money that you have held in a jar for many years. If you have your own money, then lenders want to see a paper trail that showcases exactly where that money came from.

The best thing to do is to speak with a knowledgeable financial advisor to discuss the options that are available to you. You can explain your financial situation to them and why you are looking at a refinance option. They also have all the most up to date knowledge and understanding on the different financing and mortgage laws in Florida, which means they can make sure you get the most affordable and relevant solution for your particular needs. Best of all, their services are usually free, as their cost is clawed back through the finance provider.