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  • What homeowners in Arizona (AZ) should know about refi mortgage rates

    Low refinance mortgage rates in Southwestern states, such as Arizona, allow home and property owners to save money on their long-term home loans. Refinancing in Arizona can also offer homeowners to secure cash on hand to make investments, pay for higher education, or even make a down payment on a second home.


    According to data from CoreLogic, the average property value in Arizona is $140,439.30 and the average mortgage balance $118,105.40. This means many homeowners in Arizona could be in a great equity position. This opens the doors for plenty of refinancing options.


    Arizona mortgage lenders and mortgage companies frequently offer home refinance loans that are custom tailored to offer the maximum benefit in terms of flexibility in payment structure for homeowners. What are your options?

    Refinance products in Arizona

    There are two common products for refinancings, fixed rate, and ARM loans. Here are some core differences between the two products.


    Fixed rate:  As the name implies, a fixed rate mortgage means your interest will remain fixed over the life of your loan. Regardless of the ebbs and flows of the market, your payments will remain the same.  Fixed rate mortgages usually come in loan terms of 15, 20, and 30-years.


    ARM: An adjustable rate loan means the interest rate charged on the outstanding balance will adjust, usually after a short fixed period of time, as market interest rates change. Most ARM loans come with caps on how high your interest can change annually, as well as over the life of your loan, but your payments will eventually adjust. 3, 5, 7 and 10-year ARM loans are common terms.


    Which product is right for you? Determining if refinancing with a fixed rate loan or an ARM loan is right for you will depend on many factors. What are current interest rates at? If you refinanced to a fixed rate loan, would you save money over the life of your loan? How long do you plan to stay in your home – if it’s only a short period of time, an ARM loan might offer more benefits. Read on for more details about refinancing options in Arizona.

    What are points and how do they relate to refinancing?

    Refinance mortgage rates in Arizona use a system that factors in the length of the loan and the number of so-called ‘points.’ Points are a term in refinancing that refers to a portion or percentage of the total home loan that is paid upfront by the borrower. Therefore, if a loan has a very low interest rate but 1 to 2 points, the borrower will need to pay 1 to 2 percent of the total value of the mortgage to the lender as soon as the paperwork is signed. The length of the loan usually varies between 15 years and 30 years. A longer term loan usually has lower interest rates.

    Closing costs and fees associated with refinancing

    Some lenders offer refinancing loans that have no closing costs. This means that the lender pays all associated bank fees on the loan, including processing fees, and does not require any points to be paid. This type of refinancing loan can be beneficial to the borrower if they plan to resell the house within a few years for a higher value. However, no closing cost refinance loans usually make up for this initial waiver of fees by requiring homeowners to pay a much higher interest rate on their loan. In some cases, a lender may collect money from the bank for managing to get a borrower into a high-interest loan in what is known as a yield spread premium.


    If you are not able to secure a no closing cost refinance loan, some fees you may have to incur include escrow, title, appraisal, and credit fees. While shopping around for the best deal, make sure to include these ancillary costs for a true picture of how much a refinance will cost you.


    Arizona refinance mortgage rates AZ

    The estimated average housing value in Arizona is currently higher than the average mortgage debt. This could mean homeowners are in a nice position with their home equity – an ideal time to refinance. (Photo/Wikipedia)

    Refinance Rates in Arizona

    Mortgage rates can change daily and they can vary by location. Arizona refinance mortgage rates encompass many different types of plans, from no closing cost fee loans to 30-year refinance loans with with a low interest, to everything in between. Borrowers are advised to carefully calculate the total cost of whatever loan they are considering, and then break this down into monthly payments to determine whether or not the loan makes sense for their particular financial situation. An Arizona borrower should never enter into a refinance rate until the terms and payment structure are clearly defined.


    Our mortgage calculator can help give you a better sense of the cost of homeownership. Calculate your estimated monthly mortgage payment with our mortgage calculator to see if refinancing makes sense for you.

    Find the right Arizona lender

    A huge part of refinancing success is the ability to find the right lender. Credit unions and community banks are a great place to start research for your upcoming refinance. Many credit unions are able to provide lower rates or deals because of their not-for-profit structure. One credit union, for example, Arizona Central Credit Union, advertises that they will provide free appraisals to customers who opt to refinance through them.


    Looking for a lender in your area? We can help. In minutes you’ll find a local, licensed lender with positive customers reviews who can help you apply to get pre-approved for a mortgage, obtain a mortgage for a new home, or refinance your existing mortgage.

    Final tips for securing the lowest refinancing rates in Arizona

    At the end of the day, no one can know whether rates will pop back up or drop, and to what degree. Always use best practices, financially, to earn better refinance rates regardless of the market trends.  Have you spent time working on your credit score? Or lowering your overall debt?  Credit scores and the loan-to-value ratio of your property have a large impact on the refinancing rate you’ll be able to secure.


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