What is Mortgage Refinancing in Arizona?
Refinancing replaces your current mortgage with a new one, typically with a better interest rate. Currently, in Arizona, mortgage rates are between 6% and 7%, though your rate will vary based on your profile. If you purchased during historically high rates, you can lower your monthly payments without needing to sell your home. It’s also possible to receive a portion of your home equity as a lump sum through a cash-out mortgage refinance.
Top Reasons to Refinance in Arizona
Homeowners may choose this versatile loan option for a variety of reasons, such as:
- Reducing costs through lower payments
- Debt consolidation
- Securing lower rates
- Switching from an adjustable-rate mortgage to a fixed-rate mortgage
- Removing private mortgage insurance
- Changing loan terms, such as going from a 30-year to a 15-year mortgage, to pay off your home sooner
- Finance home improvement projects
- Leveraging your home’s purchasing power cash-out loans
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Get a quoteRefinance Mortgage Options Available in Arizona
You can choose from conventional loans, FHA, VA, or USDA refinancing options, depending on your specific needs. Contact our mortgage experts for full details on your preferred loan type, and we’ll ensure you get the best deal on your next mortgage.
- Rate-and-Term Refinance: Save with a lower interest rate, or switch from a 30-year to 15-year mortgage depending on your needs.
- Cash-Out Refinance: With this option, you take out a larger mortgage loan and get the difference in cash, which can be used for a down payment on a new home or repairs for your primary residence.
- FHA Streamline: Those with FHA loans can choose this option, which does not require a new appraisal or income check, making it perfect for those worried about getting approved
- VA IRRRL (VA Streamline): VA borrowers can enjoy a similar process as those with FHA loans, all without appraisals.
- USDA Refinance: Rural homeowners can access better interest rates and more advantageous loan terms.
- Jumbo Loans: If you need more than a conventional loan can offer, explore larger financing options with low fees and competitive mortgage rates.
Cash-Out Refinance vs. HELOC
Both cash-out refinances and home equity lines of credit (HELOCs) can be great options, depending on your specific goals. Our mortgage loan officers can help you compare rates and advantages so you can make the right choice for your needs.
| Cash-Out | HELOC | |
| Interest Type | Fixed-rate | Variable-rate, starting with interest only and then principal plus interest |
| Payment Options | Lump sum | Revolving line of credit |
| Repayment Starts | Immediately | With interest-only payments, then principal and interest |
| Closing Costs | Similar to a first mortgage | Lower than a home loan |
| Lien Position | First lien | Second lien (in addition to primary mortgage) |
Benefits of Refinancing in Arizona
You can access a number of benefits from this mortgage option, including:
- Saving on taxes
- Paying off debt
- Accessing ready cash, such as to buy a vacation property
- Changing to more advantageous loan terms
- Eliminating PMI
Who Should Consider Refinancing?
Many homeowners can benefit from this flexible financing option. If you have a high interest rate or a low LTV, you can secure better terms and save money. You can also use these mortgages to cover major expenses, consolidate debts, or save for retirement.
Arizona Mortgage Refinance Rates
Current rates range from 6% to 7%, but the mortgage market is subject to frequent shifts, making it essential to monitor rates and determine when to apply.
Your rate will be determined by your borrowing profile, such as credit score and LTV. You can see how much you may be able to save by requesting a free quote or contacting us for a personalized consultation.
The Refinance Process Step by Step
There are five primary steps to getting your new loan:
- Speak to a Mortgage Loan Officer: We’ll review your financial goals and determine which product is best for you, such as a conventional mortgage or VA loan.
- Apply for the Loan: You’ll provide updated financial details, proof of identity, and proof of home ownership. Here, you’ll also determine what type of loan you’d like.
- Get an Appraisal: The lender needs to know what your home is currently worth to determine how much you qualify for.
- Underwriting: The underwriting team will carefully review your details to determine if you are approved.
- Close: At closing, we will close out your old loan and formally open the new mortgage. You will also pay any closing costs that are required.
Arizona Refinance Requirements
To qualify for this new mortgage, you should meet the following requirements.
- Credit Score: Generally, a score of 620 is required, although some lenders may accept lower scores depending on the mortgage type.
- Income: You must provide proof of a stable income through bank statements or tax returns for the past two years.
- LTV: You typically must have an 80% LTV or lower, meaning that you retain 20% ownership after the new loan is opened.
- Current Loan Status: You cannot be delinquent or in default on your current loan.
Documents Needed to Refinance in Arizona
When you apply, you will need to provide us with certain documentation. Our team will ensure you have everything ready for your application, including:
- Bank statements and pay stubs
- Two years of W2s or tax returns
- Mortgage documentation
- Proof of home ownership
- Credit report
- Proof of identity, such as a Social Security number
- Proof of homeowner’s insurance
Refinance Closing Costs in Arizona
Like with your original loan, you’ll have some fees to pay on closing day. They can be paid out of pocket, or you may roll them into your loan. Generally, you can expect to pay 2% to 6% of the total loan. Here are some of the most common expenses, along with the associated costs.
- Appraisal Fee: This can cost between $500 and $1,000.
- Title Services: Usually around $1500, this secures your title.
- Recording Fees: The new loan must be recorded with the city. This is generally around $25, though it could be as high as $200 in some areas.
- Credit Report: You’ll need to pay around $125 for the report.
Other costs may include prorated expenses such as property taxes and homeowners’ insurance, prepaid interest fees, escrow opening costs, attorney fees, and survey fees. On a $200,000 loan, homeowners can expect to pay anywhere from $4,000 to $12,000.
How Long Does It Take to Refinance in Arizona?
You can expect to have your new loan within 20 to 45 days. Providing proper documentation upfront can significantly reduce your waiting time, while any issues with your documentation or conflicts about the appraisal may make your loan take longer.
What’s the Break-Even Point in Refinancing?
The break-even point is the time it takes to recoup the losses from opening a mortgage when compared to the savings from better terms.
For example, if you were able to reduce your expenses by $150 a month, but the process cost you $5,400, then it would take you around 36 months to break even. If you intend to stay in your home for another three years, then getting a new loan makes sense for you.
Common Refinancing Mistakes to Avoid
As with any decision regarding your home, this is a major decision that must be taken thoughtfully. Common mistakes we see homeowners make include:
- Failing to compare lenders first
- Ignoring the break-even point
- Not paying attention to current rates
- Refinancing too frequently
- Choosing the wrong loan type for their needs
- Taking out more money than they really need
Working with a trusted mortgage expert can help you avoid these issues.
Why Work with Arnaiz Mortgage for Arizona Refinancing
Our local experts provide a broad range of loan services and personalized support. With a five-star rating from over 170 reviews on Google, you can be assured that we will offer excellent customer service and a smooth, stress-free process.
Get Your Free Arizona Refinance Quote
Use our free, easy, and fast quote request to learn how much you can afford, or start your loan application online with our convenient tools.
