Mortgage Refinancing in Arizona

Mortgage Refinancing to a lower interest rate and provide many, many benefits depending on your situation.  Whether you want to free up more cash flow by reducing your payments, make your existing payments more efficient, Pay for mortgage off faster or consolidate Debt - a low rate refinance can help you achieve your goals.   

Mortgage Refinancing to save interest 

One of the biggest reasons people want to refinance their loans is to save on interest.  If the currently available interest rates are lower than what you are currently paying you will immediately be saving money on your repayments.  Given that interest rates are historically low at the moment, it's likely that you can achieve some greatly interest savings by refinancing your mortgage. 

Some lenders will charge a "break fee" for refinancing your loan to a lower rate.  You should always check on this and find out how much it would be before making any decisions about refinancing, as if the charges are significant they can erode the benefits you'd gain by moving to a lower rate.  With that said, any fees charged will generally be outweighed by the interest savings over time.

Securing a lower interest rate means that every payment you make is more efficient and will pay off more of your actual debt - getting you mortgage free much faster

 

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Cash Out Mortgage Refinance

A cash out refinance is when you refinance your mortgage to a higher loan amount than you currently have.  The difference between your old loan amount and the new amount is the "cash out" portion of the refinance and is effectively like cash in your hand.  It can be used immediately for any purpose that you like.  A Cash Out Refinance unlocks the built up equity in your property and gives you access to it, but without the higher interest rates that Equity Loans or Home Equity Lines of Credit typically come with. 

 
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Refinancing to Pay off your Mortgage More Quickly 

There are a few ways you can use a Refinance to pay your mortgage off more quickly:

1.  Secure a lower interest rate.  This will mean that for every $1 or mortgage payments you make you will pay off more of the debt and less interest.  Even a modest change in interest rate can result in your mortgage being paid off years sooner if you keep your payments the same.

2.  Increase your repayments.  When you refinance, you can choose to increase your repayments and thereby shorten the mortgage term.  You may have changed jobs or got a promotion, be renting out a bedroom or your partner may have returned to work.  Regardless of the reason why you've now got more disposable income, refinancing your mortgage will allow you to step your repayments higher and knock years off your mortgage term.  Combined with a lower interest rate, this is the ideal "1, 2 Punch" to get you debt free in record time.

3.  Get rid of your PMI/Bad credit Terms.  If you have better credit now that you did when you took out the mortgage initially, you may be able to achieve a still better interest rate, as you have demonstrated a history of good payments and are now considered less of a credit risk.  Likewise if you have built equity in the property you may no longer be required to have PMI through your lender.  Dropping this alone will create huge savings annually and allow you to pay off the loan years faster.

 

Refinancing to Reduce your payments 

Just as you can refinance to up your repayments, Refinancing can be used to bring them down as well.  The easiest way to achieve this is to secure a lower interest rate, and adjust your payments to compensate.  

This will mean that you are paying the same amount off your actual debt (it will still be paid off in the same time) but you will pay less interest, thereby dropping your repayments.  Also, if your credit score has improved or you have built equity you may be able to avoid paying PMI or get rid of any "high risk" interest premiums you may have been initially charged.  Finally, if you have previously been paying off your mortgage quite aggressively you can look at refinancing to extend the loan term.  Paying your mortgage off over 30 years instead of 15 or 20 can drop the payments on it considerably, especially if you can get a lower interest rate than you currently have.