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Arizona Mortgage Refinancing

Brian Reese
August 18, 2023

Mortgage rates in Arizona are quite envious compared to yesteryear: the average interest rate throughout 2023 for a 30-year fixed mortgage has been 6.02%, compared to 2007, when the yearly average rate was as high as 6.46%. Rates change frequently, and by timing carefully, you can get a lower interest rate that lets you pursue other financial goals with your savings.

If you’re halfway through your mortgage term and eager for a lower rate, you can reduce your monthly payment by undergoing the refinance process – and District Lending can help.

No matter how much is left on your loan amount, District Lending can help you find a great interest rate you’ll love. Our highly qualified loan officers are ready and waiting to assist you in finding an excellent product, reviewing all the factors that go into your monthly payment, and identifying which options are best for you. Today, we’d like to help you learn about the Arizona mortgage refinancing process with an overview of the benefits of this powerful tool.

What Is Refinancing?

Reduce monthly cost with refinance options

Mortgage refinancing is when you take out a new mortgage to replace your existing one, usually with a lower rate and more favorable terms.

Working with a mortgage loan officer, you’ll select a new loan with better terms; this will be used to cover and close out the existing mortgage and finance the rest of the property.

Before starting the refinancing process with a mortgage loan officer, you’ll need a home appraisal to determine the fair market value of your home. This information informs your new home loan amount.

Once this is done, you can compare different lenders and their rates, then open up a brand new home loan with terms that benefit you.

When Should You Refinance Your Home?

There are a variety of factors at play when it comes to deciding whether or not to refinance mortgages.

Debt Consolidation

Refinancing can make this more manageable if you have a lot of other debt. By choosing a cash-out refinance, you’ll receive money to pay other debts, such as credit cards, student loans, or renovation costs.

You can also select a longer term with a more favorable interest rate that reduces your monthly payments, which can be used to pay off other debts over time.

Cash In On Equity

Equity is the market value of your property minus the current mortgage; in other words, it’s the dollar amount of your home that you own outright through your previous mortgage payments.

When you refinance, you can choose a cash-out refinance, which allows you to pull money out of your home for other things, such as renovations, medical bills, or assisting a relative with their bills.

Take Advantage of Lower Interest Rates

Miserable with your mortgage rate? You might consider refinancing when you find a lower interest rate; this can save you thousands of dollars in interest over the life of your home loan and reduce your monthly payment considerably.

If you originally had a fixed-rate mortgage, you can select an adjustable-rate mortgage instead, which has a fluctuating interest rate based on market conditions. Adjustable rates are an excellent option for those who opened a fixed-rate loan with high-interest rates, as even a fraction of a percentage can make a huge difference.

Shorten Your Loan Term

Homeowners who acquired their current mortgage when making less money but have improved their overall financial situation can refinance to shorten the loan term and pay a little more each month. This reduces the amount in interest and other fees they’ll pay over time,

Eliminate Private Mortgage Insurance

If you initially provided a down payment of less than 20%, you’re likely paying for private mortgage insurance (PMI). PMI can cost you a considerable amount each month; however, when you refinance, you can acquire a new loan that doesn’t require PMI, reducing your monthly costs.

How Often Can You Refinance Your Home in AZ?

There’s no limit on how often you can refinance in AZ, but your lender will likely have a “seasoning period” of 6-12 months between refinancings. Usually, you’ll need to wait at least six months from your closing date to start the refinance process the first time.

This can differ based on your loan type and your lender’s requirements.

Refinancing Options

Your options vary depending on whether you’re trying to access equity, change your loan terms, find a new loan type, or switch to a new lender. Here are the four common refinance options that you can select from.

Rate-and-Term Refinance

This is the most common refinance option in AZ; in fact, 48.2% of all state refinancings are rate-and-term, allowing you to swap out your old interest rate for a new one. You don’t need to use your old lender, either: you can find another loan servicer if you’d like.

Cash-Out Refinance

This mortgage type is for those seeking to leverage their home for other needs. You’ll get a new mortgage to cover the current home loan balance, then receive cash to pay for things like home improvements or other debts.

A cash-out refi is different from a Home Equity Line of Credit, a revolving line of credit you pay as needed – sort of like a home improvement credit card.

Cash-In Refinance

This is when you bring more money to the closing table, essentially making a lump sum payment on your home loan. This can shorten the term and reduce your mortgage amount.

Streamline Refinance for FHA or VA Loans

Those with an FHA or VA loan can choose a streamlined process that doesn’t require an appraisal and needs far less paperwork, which makes it easier for disadvantaged borrowers to access their home equity or improve their terms.

Refinancing Your Mortgage In AZ? Call District Lending

Bad mortgages can put you on precarious financial footing. If you’re looking for a better loan, we’re here to help.

We’ll match you with a lender that fits your needs at no added cost, so you get the best deal on the market.

Available throughout the entire loan process, District Lending is the support you need to refinance your mortgage, save money, and meet your financial goals, with no fees attached.

Buy a home and refinance at no cost.
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