AZ refinance is an option available to Arizona homeowners who want to refinance their mortgage. Many reasons exist for mortgage refinance, but the most common include obtaining a reduced rate of interest and extending mortgage terms to reduce monthly payments.
Before entering into AZ refinance, borrowers should take time to conduct research and determine if mortgage refinancing is in their best interest. Mortgage financiers recommend obtaining a minimum 1-percent reduced rate of interest to making refinancing worth the effort. Borrowers should strive for 2- to 2-1/2-percent to achieve substantial home loan savings.
Most mortgage lenders require borrowers to have a minimum 5-percent home equity in order to refinance. Arizona has been hit hard by foreclosure rates, so borrowers should review their credit history and FICO score prior to applying for mortgage refinance. Lending criteria is considerably stricter than a few years ago and borrowers will need a FICO score of 720 or higher to obtain a decent interest rate.
Borrowers must also calculate refinance rates such as loan application and origination fees, loan points, costs for home appraisal and inspection, attorney review, closing costs and prepayment penalties. AZ refinance fees can quickly escalate to several thousand dollars.
Mortgage lenders provide borrowers with a "Good Faith Estimate" of anticipated fees charged by the bank. This estimate does not include third party costs such as home inspections, appraisals or attorney fees. However, homeowners can utilize good faith estimates to calculate the true cost of entering into mortgage refinance.
Oftentimes, Arizona homeowners refinance mortgages through their current lender because it is convenient or they have established a good relationship with the bank. While it can be easy to pick up the phone and commence with the mortgage refi process, it is much smarter to take time to comparison shop. A mere 1/4-percent reduction can save borrowers thousands of dollars over the course of the mortgage term.
BankRate.com is a trusted source for comparing mortgage refinance rates. Bank Rate provides links to a variety of AZ and nationwide mortgage lenders, along with current refinance interest rates, annual percentage rates, and anticipated costs and fees.
Borrowers who obtained bad credit lender loan mortgage and have improved their credit scores may want to consider entering into AZ refinance. Bad credit mortgage loans carry a higher rate of interest and can add thousands of dollars to the loan amount. By clearing derogatory credit and obtaining a higher FICO score, borrowers who refinance can potentially reduce monthly payments by a few hundred dollars.
These are just a few options available for entering into AZ refinance. Our mortgage refinancing article library provides additional information and resources to help homeowners make informed choices.
It is crucial to obtain trustworthy information and resources prior to applying for mortgage refinance. By taking time to learn about available mortgage refi options, you can avoid making the wrong decision about AZ refinance. Education is the key to reducing home loan payments and locating the best mortgage refinance deal.