Arizona Refinance

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Maximizing Benefits with Arizona Home Refinancing

A mortgage refinance can help you save money and meet your financial goals by significantly reducing your interest rate. Should you time the market correctly, you can enjoy excellent benefits, including a lump sum payment if you choose a cash-out refinance. Our team at Arnaiz Mortgage will help match you to the perfect refinance rates and guide you through the process so you can select the loan term that best meets your needs.

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Why Refinance Your Arizona Home?

With a refinance, you close out your current loan and open a new mortgage, allowing you to enjoy current mortgage rates lower than your original loan. For example, those who purchased their home in late 2022 have an advantage since that was when mortgage rates were over 7%. They could significantly reduce their monthly payment by choosing a rate-and-term finance.

If you have owned your home for longer, you can use a cash-out refinance to take advantage of a lower rate and a lump sum payment. This allows you the funds you need to consolidate other payments or make home repairs. With a cash-out refinance, the homeowner receives compensation for the difference between their home’s current value and their previous loan balance.

As home values in Arizona have risen by 56% in the past five years, you may have significant home equity stored up in your home, even if you have only made the expected monthly payment.

When Should You Refinance Your Home in Arizona?

The decision of when to refinance depends on your financial needs and the current market trends. If you can achieve a lower interest rate by changing your loan term, it’s a perfect time to consider refinancing, especially if you intend to live in your home for five years or longer. This gives you plenty of time to recoup the expenses of refinancing a mortgage and enjoying a lower monthly payment.

Pay close attention to refinance rates to determine when it would be the best time to switch up your mortgage and what you intend to do with your home in the meantime. At Arnaiz Mortgage, we can assist you in making the decision to refinance a mortgage; simply give us a call at (623) 806-4645 to get expert advice.

Why Choose Arnaiz Mortgage for Your Arizona Refinance Needs?

Arnaiz Mortgage provides superior customer service, always considering our customers’ needs and how a refinance fits into their personal goals. We will help you explore mortgage rates and what loan term will best meet your needs, offering helpful advice on the mortgage refinancing process and how you can reduce your costs.

Our local expertise in Arizona mortgages makes us a natural fit for homeowners who want to save on their loans; we’re familiar with the many loan options available in the Grand Canyon State and will help you choose the one that fits your lifestyle. Most importantly, you’ll benefit from our experience in finding excellent refinance rates that ensure you never pay more than necessary for a refinance.

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Frequently asked questions about Arizona Refinance

  • What are refinance rates in Arizona?

    Your interest rate will depend on your loan type. Mortgage and refinance rates change frequently, so even if they are not in your favor now, check back to see whether you can get a better deal.

  • What is a reasonable refinance rate in Arizona?

    The optimal mortgage rate is lower than your current loan product, which depends on your circumstances, the type of loan you choose, and the current mortgage rates. In general, a reduction of 1% is very good, while even a 0.5% reduction can be a reasonable refinance interest rate, depending on your goals.

    No hard-and-fast rule determines whether you’re better off choosing a refinance to take advantage of lower interest rates. Instead, you should calculate the break-even point to decide whether a refinance is a good option for you.

     

    To find the break-even point, gather all the closing costs associated with opening a new loan, then determine how much you save in monthly payments by looking at the loan information your lender has provided. You’ll then divide your total costs to refinance by the savings in your monthly payments to get a time period in months.

     

    If you will break even before you expect to sell the home based on how much you save through better mortgage rates, then it’s a great idea to review the current national mortgage rates and assess if you’ll get at least a 0.5% reduction in your rate. 

  • What is the average refinance cost in Arizona?

    The cost to refinance mortgages varies and depends on various factors, such as the loan program, credit score, and other personal considerations. These lender fees pay for the underwriting process. You don’t need a down payment, which helps reduce the financial burden.

    If you so choose, you can also apply discount points at the time to close to reduce your interest rate further.

    The national average for a refinance is between $3,300 and $5,800, depending on whether taxes are included in the calculation.

  • Is it hard to get approved for a refinance in Arizona?

    While the loan application is similar to original home loans, lenders expect a better financial profile from those refinancing than they would a first-time homebuyer. You will need to show a sufficient debt-to-income ratio, typically around 43%, though some lenders will go higher. The credit score required for a single-family primary residence can vary depending on the loan program. Contact Arnaiz Mortgage to determine the minimum requirements based on your situation.

    The loan-to-value ratio is also essential; lenders usually want an LTV of at most 80%, though they may go higher than this if you have an excellent credit score. You may also have to pay private mortgage insurance if you have a high LTV, but it is unnecessary for Federal Housing Administration and Veterans Affairs loans.

    Additionally, you’ll have to get a new appraisal to assess the market value, as the lender wants to ensure they are not paying more than your home is worth. In some cases, such as for streamlined Arizona FHA loans and Arizona VA IRRRL loans, you will not need an appraisal.

  • Is refinancing easier than getting an Arizona mortgage?

    A refinance is a smoother process because fewer parties are involved, but the requirements for accessing a refinance may be more stringent. The closing date is not as tight, and no earnest money deposit is necessary, which reduces a lot of the paperwork.

    Because you don’t need to pay a down payment, you don’t have to worry about applying for down payment assistance programs or securing all the funds. Finally, there is less risk for everyone involved, as should the refinance process fall through, you will still keep your home.

  • Do you have to pay closing costs when you refinance in Arizona?

    Yes, you must still pay closing costs when refinancing an Arizona mortgage. These are usually between 2% and 6% of the total loan amount, though they may be higher if you decide to pay mortgage points to reduce your interest rate. You can typically roll the closing costs into the loan amount if you have enough equity.

  • How often can you refinance your home in Arizona?

    There is no fixed rule on how many times you can refinance mortgages, though nearly every lender will impose a seasoning rule that keeps you from opening new mortgages too frequently. This seasoning requirement can range from 6 months for Arizona VA loans and FHA loans to a year or more for a conventional loan program.

    If you have previously refinanced and are interested in doing so again, speak to Arnaiz Mortgage about your refinancing options. We will help you find mortgage lenders who can help you achieve your goals.