Mortgage refinance in Arizona can be used for repaying your earlier mortgage or for debt consolidation. It can help in reducing your interest rates, changing the loan to fixed repayment terms and savingtaxes.
It also helps in reducing the timeframe to repay the mortgage.
Refinancing for Mortgage in Arizona
Arizona mortgage refinance has increased over the years.The state is famous for its Jumbo loans as the houses here are priced high and the conforming limit is at $417,000. Moreover, the interest rates are also higher than the conforming loans.
Residents of the state prefer to buy Arizona mortgage refinance as ‘interest-only’ loan which makes the monthly payments lower as the principal does not get affected.
The money which needs to be repaid is only for interest and not for principal. At times, such refinancing can help you to move to a better home or use the money for other expenses as you would be paying only the interest.
Applying for Mortgage Refinance in Arizona
When you are interested in refinancing your mortgage at Arizona, the lender will first evaluate your house and find out its market value, then review your FICO score and credit report to decide on the interest rate.
He will then evaluate your personal details like employment, bank accounts, and financial obligations. Afterwards, he will give you the following:
- Truth-in-Lending disclosure which is a summary of the total cost of credit and other details of the loan
- A Home Buyer's Guide to Settlement Costs
- Details about Annual Percentage Rate (APR) which indicates the interest rate, discount points, broker fees, and other mortgage expenses
- If the mortgage is an adjustable-rate one, then you should be given an ARM disclosure which indicates the costs of the ARM and performance of the index to find out the interest rate
Arizona State also provides Subprime mortgages if your credit score is below 620. According to the Federal Reserve Board,about 20% of U.S. mortgages made in 2006 were subprime loans and Arizona is considered to be at number two in the nation which is offering bad credit mortgages with about 17 percent of Arizona residents having subprime loans.
The interest rate on this kind of mortgage is 3 percent more than on the regular prime credit loans.
Thus, if you want to own a house in Arizona and want to stay in it for the next few years, the lower payments will cover the refinancing.
So, it is wise to contact the local lenders who will offer you the proper mortgage refinance along with right repayment terms. You should do adequate researchto choose a lender who can offer you the best deal.
This can be done by comparing the deals offered by various lenders and getting the most competitive one.