Arizona Mortgage Refinancing: Is It Right For You?

By: Mike Hamel

Mortgage refinancing is as popular in Arizona as it is in the rest of the country. It accounted for almost half of all mortgage applications last year.

Mortgage refinancing involves getting a new loan to pay off your current one. The new loan can be for more money, depending on how much equity there is in your home. Equity is the difference between what you owe and the home’s market value.

Mortgage refinancing can lower your monthly payments if the new loan has a lower interest rate. If the new mortgage has a shorter term, you can pay it off sooner and save thousands of dollars. Refinancing will let you change an adjustable-rate mortgage to a fixed-rate mortgage or vice-versa.

And, you can refinance to cash out equity to pay for anything from home improvements to a college education.

Before refinancing, make sure your original mortgage doesn’t have a prepayment penalty. If it does, this might affect your decision, depending on the size of the penalty.

Comparison Shop

Comparison shop to get the best deal on Arizona mortgage refinancing. Interest rates and closing costs may be negotiable, especially in today’s competitive loan market. Contact several lenders and find out all the costs involved in refinancing with them.

Once you have all the information you need, don’t be afraid to ask lenders to waive or reduce one or more fees in order to get your business. Be sure that any discount reduces your bottom line and that a lower fee in one place isn’t offset by another cost being raised elsewhere.

Get whatever deal you negotiate in writing. You can also “lock-in" the interest rate for an agreed upon period of time to protect against rate increases while your paperwork is being processed. If you are charged a fee for this, see if it is refundable at closing.

You can get a worksheet for comparing different offers at the . You can also get a quick and confidential loan quote at no cost.

It is no-risk way to learn how much equity you could cash out or how much you might be able to lower your payments.

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