Az Refi
The title of this article is AZ Refi, which is short for Arizona Refinance but for the sake of brevity I will just refer to it as AZ Refi. I have used this title because I live in Arizona and I have experience with Arizona Refinancing. The information that follows is just a short primer on refinancing in general and can be applied to just about all states.
There are many reasons that you might want to refinance. There are also many options available to most homeowners that meet the financial requirements, which will allow you to refinance your Mortgage at a lower rate. An AZ Refi can save you a lot of money over the life of the loan if you are smart and take all options into consideration. Lets take a look at three reasons why you may want to do an AZ Refi.
1. Lower Your Monthly Payment
One consideration when you might want to refinance is to get a lower monthly payment. If you are planning to stay in your home for a number of years you may want to pay some points to bring down your interest rate and your overall monthly payment. The savings in monthly payments will pay for the cost of the refinance and will have saved you thousands in interest charges. I did this with an AZ Refi on my first home. The mistake I made was that I didn’t stay in the home long enough to benefit from the lower monthly payments. If you plan on only staying in the home for a short period of time then this may not be the best option for you. Make sure you do some simple math and calculate your break-even point before you refinance.
2. Switch From an Adjustable Rate to a Fixed Rate Mortgage
Adjustable rate mortgages (ARMs) became very popular when the interest rates were stable and market conditions were favorable. This type of AZ Refi will get you into a more expensive home at a much lower interest rate. The problem is if the market moves against you and your monthly payment increases dramatically. If you plan on living in your home for a long time then you will want to get out of the ARM and into a fixed rate mortgage if you can. The fixed rate mortgage will be a higher interest rate but you will know what each monthly payment will be and you can budget accordingly.
3. Escape Balloon Payment Programs
Balloon mortgage programs are similar to an ARM in that you get a low interest rate and lower monthly payments. This is great until the note comes due and you have to pay the balance of the loan. There are different terms for these financial products but traditionally they last for 5 to 7 years. At the time of the balloon payment it is relatively easy to do an AZ Refi and switch to a fixed rate mortgage.
The laws and terms of refinancing are constantly changing and you should always do your homework when you are looking to do an AZ Refi. With the current banking crisis it is getting even harder to secure a loan. Ask your lender what is available and what you qualify for. Be realistic and don’t get a home you can’t afford.