If you have enough equity, you may qualify for an AZ refinance if your credit report is good and your credit score is high. Staying current on your bills and keeping credit card debt under control are the primary ways to achieve this.
The other factor to be considered is that income documentation guidelines are being enforced, so expect to provide two years of income tax statements, along with current paycheck stubs. If the debt-to-income ratios are met, you may be on your way to lower monthly expenses, when you consider an AZ refinance.
There are some cases where you are better not to refinance, because there are closing costs involved, including origination points, appraisal and credit report fees, along with title insurance. To make this a cost-effective process, you need to consider mortgage refinancing that offers interest rates that are at least 2% lower than your current mortgage interest rate.
The exception to this rule is for those that almost have their home paid off because the majority of final payments go towards principal pay-down, with very little going towards interest, giving you effectively lower interest. It also leaves you more options, once your home is paid off, so this is something to consider, before thinking about an AZ refinance of your mortgage.
For the majority of people in Arizona, the appraisal value of their home is the problem, when it comes to an AZ refinance because some areas have lost 50% of market value. The housing market is stabilizing and home values are starting to rise, but if you have enough equity, it may be the best time to refinance, if you plan to stay in your home for five years or more.
You have to consider that refinancing is like starting over, with the majority of payments going towards interest, so the only exception to this rule is if you are refinancing for a shorter term, to pay your home off quicker. There are many options available for an AZ refinance for those that meet the credit and income requirements and have enough equity, however.
When you are shopping mortgage refinance companies, be sure you are aware of closing costs associated with the loan because this can affect the overall interest rate. If you are considering a company that charges a 2% origination fee, this needs to be added to the interest rate they are advertising, for example.
The important thing to consider is you understand the contract terms in the documentation of the AZ refinance agreement and if not, you should consult a real estate attorney to advise you. For many people, refinancing their mortgage can lower their monthly housing expense and possibly give them cash from their equity to use on other things.