Arizona Refinance Process

Four Reasons to Refinance

A mortgage loan is generally the largest debt that most homeowners will need to manage. It's a good idea to review your real estate finance portfolio a check-up annually.

There are many reasons that a homeowner may choose to refinance their mortgage loan, but the top four reasons are;

• Drop in mortgage rates
• Lowering current mortgage payments
• Debt consolidation
• Changing mortgage programs

Calculating the Net Benefit of a Refinance

You certainly don't want to refinance unless you receive a benefit! Calculating that net benefit can be a bit confusing, however. You can make this calculation easier by focusing on the lowering of the interest rate. Again, there are many reasons to refinance but lowering the rate is the most popular.

Should I get a Home Equity Line of Credit or Cash-Out Refinance to make home improvements?

Many homeowners are interested in making improvements to their property without tapping into their savings or investment accounts. Two options available are a Home Equity Line of Credit or a Cash-Out Refinance.

There is also a Home Equity Loan which, unlike a Line of Credit, is a lump-sum given to the borrower paid back through fixed payments.

Both a Line of Credit and a Home Equity Loan are what's called a "subordinate position" to the first loan and usually referred to as a "Second Mortgage". Because of the risk taken by a lender in this case, the rates are usually a little higher.

To refinance your home loan, there are basically three steps that you will take:

• Assess: With your lender, assess if refinancing your mortgage is the right decision for you at this time. Then assess which program is best for you.
• Apply: Complete the mortgage application. Gather together the documents required by your lender and his underwriters. Submit them to your lender.
• Appraise: Your lender may require an appraisal of your home to ensure that it will cover the amount of the home loan. He will arrange this for you.

Completing the Refinance Process

Once the mortgage application has been approved and the appraisal has been accepted, your lender will schedule a closing date. On the date of closing, you will sign new mortgage documents. Shortly thereafter, the existing mortgage will be paid-off and retired and payments on your new mortgage will begin.