With the Current Arizona Mortgage Rates, Why I Should Refinance My Mortgage?

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With the Current Arizona Mortgage Rates, Why I Should Refinance My Mortgage?

Are you a homeowner who seeks a lower interest rate? Do you want to shorten your mortgage terms? Do you want to utilize your home equity to raise funds for your child’s college education, have money to start a business, or simply consolidate your debt? Are you a homeowner who wants to refinance with FHA loans? Since refinancing can cost between 3% to 6% and requires appraisal, lender fees, and title search, homeowners must determine if refinancing is a wise financial decision.


Aside from the information on Arizona mortgage rates and the need to refinance your mortgage, we also share topics ranging from how Arizona VA home loans work and how to apply for FHA loans in Arizona. Especially if you are a veteran or active military personnel, you can find our articles to learn how to make the most of your VA loan rates useful.

First of All, Here are the 2022 Home Mortgage Rates in Arizona (as of April 1, 2022)

  • 30-year fixed: 4.54%

  • 15-year fixed: 3.71%

  • 5/1 ARM loans: 3.56%

  • 30-year fixed mortgage refinance rates: 4.71%

  • 15-year fixed mortgage refinance rates: 3.71%

  • 7/1 ARM refinance: 3.56%

  • 15-year fixed jumbo loans mortgage refinance rate: 2.99%

What Are My Refinance Options?

The reason why you are getting a refinance is primarily to utilize lower mortgage rates. If you plan to remain in your current home for a long time, it may make sense to switch from an adjustable-rate to a fixed-rate mortgage or vice versa, depending on which has a lower interest rate. You can consider refinancing when interest rates drop, as this could shorten your mortgage term and pay much less in interest payments. Best of all, you can tap into the equity or consolidate your debt.

 

Refinancing To Shorten The Mortgage Term

Homeowners can have the opportunity to refinance an existing loan when interest rates fall. If the interest rate falls low enough, you can shorten the loan term without changing monthly mortgage payments. For instance, if you refinance from a 9% to 5% interest rate for a 30-year fixed-rate mortgage on a $100,000 loan, you may increase the monthly payment from $805 to $817 while cutting the term in half. However, if the interest rate decrease is just around 2%, for instance, from 5.5% to 3.5%, decreasing the duration to 15 years will increase your monthly mortgage payments from $568 to $715.

 

Refinancing to Avail of Lower Interest Rates

Suppose you have enough money for a down payment or gained access to down payment assistance. You may have an opportunity to cash in on savings if the interest rate offered is lower by 2% (though some mortgage lenders may advise you to take even a 1% decrease in interest rates). Then the best reason to refinance is to avail of lower interest rates on your existing loan. By reducing your interest rate, you will save money in the long term, but you can also build equity in your home. You can also decrease your monthly loan payment. For instance, a $100,000 loan amount at a 30-year fixed-rate mortgage with an interest rate of 5.5% has an interest and principal fee of $568. You will only pay $477 monthly for the same loan at a 4.1% interest rate. You will need to qualify first, such as submitting a good credit score, debt-to-income ratio, and other requirements. However, if you are eligible and have enough down payment, you can cash in on lower mortgage rates in Arizona as soon as it is available. You may also ask the mortgage lenders about closing costs, insurance premiums, lender fees, and other inclusions. This may work for more substantial loans such as jumbo loans.Refinancing to Convert to Adjustable-Rate Mortgages or to Fixed-Rate Mortgages.

 

Converting from a fixed-rate loan to an ARM, which often has a lower monthly payment, maybe a smart move if the interest rates are falling and you don’t plan to stay in your home within a few years. If you don’t mind how the interest rates or the annual percentage rate will go within a decade, then it is OK. However, if the interest rates rise, you will lose money.

 

Refinancing to Consolidate Debt or to Tap Equity

If you seek to gain funds for a child’s college education or make major purchases such as substantial house renovation, you can consider refinancing your mortgage. However, you may need to resist the temptation to spend more once you are in the period of refinancing. Note that it takes years to recover the 3 to 6% of principal that refinancing costs. If you plan to move out of your current home, then do not go into refinancing immediately.

 

Takeaways: Call Us If You Want To Know The Best Option

We believe that our clients should have the best options available when refinancing their home mortgage. Whether they have conforming loans such as VA loans, USDA loans, FHA (Federal Housing Administration) loans, regular loans, other government-backed loans, or non-conforming loans such as Jumbo loans, refinancing can be an excellent financing move with the proper advice which we can provide. Refinancing can help reduce your mortgage payment, build your home equity quickly, and shorten your loan term. It would help if you were cautious, though, because there are conditions where refinancing might be a wrong move. Taking cash from your equity, for instance, when you refinance, may not work out. If you are an astute homeowner who is always looking for ways to build equity, save money, reduce debt, and eliminate your mortgage payment, you can always ask us how to do it, and we will always be glad to help you today. If you want a helpful tool to be a perfect mortgage calculator that fits the types of loans you qualify for, then visit this link: Contact Valor Mortgage | Home Refinance | Valor Mortgage Lending (valormortgageaz.com).

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