Conventional Loan Utah

When Refinancing Your Home is Absolutely Worth it and When it’s NOT!

Have you been considering refinancing your home for say, a lower interest rate…or maybe you’ve had your eye on that one white kitchen from Pinterest for way too long but need more cash to properly renovate it. 🛠👀 Whatever the case may be, you’ll want to check this blog out to see if a refinance is WORTH it for you! 

Refinancing a home loan means paying off the current loan and replacing that loan with a new one. There are several reasons why one would consider a home loan refinancing option. Most importantly, if you want to refinance your St George or Mesa home loan, ensure that you are working with the best mortgage lenders in Utah and Arizona. This opens up the possibility of having the loan handled in house from start to finish while enjoying the best local mortgage rates. 

Now that you understand the basics of home loan refinancing, let us look at some of the common refinancing options when you are buying a home in Arizona or Utah.

  • The Conventional Refinance
  • The FHA Refinance
  • The VA Refinance
  • The Jumbo Refinance

1. The Conventional Refinance

If you have a good credit history and can raise a minimum of 20% equity, the conventional refinancing option may be ideal for you. The type of home loan is backed by Freddie Mac and Fannie Mae, and could provide someone that has an FHA loan the opportunity to get rid of expensive mortgage insurance. If you opt for conventional refinancing, you have different alternatives to consider.

  • The first one is a cash-out refinance. This is where a homeowner has the option of increasing the loan balance by a minimum of five percent. The additional amount that is borrowed is used for paying cash, at the closing, to the borrower. The Cash-out refinance loan, is ideal when there is a need to consolidate the debt for the borrower. Hello new kitchen or goodbye student loans!  
  • The rate and terms refinance option is where the conventional refinance loan changes the rate or the period of the loan. The amount remains the same, lowering the borrower’s monthly mortgage payments. Now doesn’t that sound nice?! 
  • The no-cost refinancing option helps a borrower who wants to refinance, but not to pay any fees and the cost of refinancing at closing. The loan amount includes the additional costs letting the borrower spread out the payments over the period of the loan.

Life Changes
And Your Loan Should Too!

Take cash out, adjust your mortgage term, lower your interest rate or consolidate your debt.

Refinance Rates - Researching on Laptop

2. The FHA Refinance

If you do not have enough saved for a down payment or if your credit score affects your eligibility for conventional refinancing, FHA refinancing is a good option for you. FHA loans are secured by the Federal Housing Administration and are available to consumers who lack the 20% equity to qualify for conventional loans. 

If you are buying a house in Arizona or Utah and you need FHA refinancing, talk to us! We’re here to help!

The FHA refinancing option is available to homeowners who can provide proof of using their home as the primary residence. The FHA refinancing is considered beneficial to the homeowners whose properties have increased in value. Therefore, the homeowner can refinance the existing FHA home mortgage and take another mortgage that is more than what they owe currently. To qualify for the FHA refinancing, the borrower must:

  • Meet the credit score guidelines of 580
  • Meet the debt-to-income ratio guideline, in order to prevent getting into a loan, you cannot repay.
  • The maximum loan-to-value of 80% of the current value of the home
  • Prove that the borrower has made all the monthly payments for the past 12 months.

3. The VA Refinance

The VA loans are available to active military professionals. The VA loan is backed by the US Department of Veteran affairs. The VA refinancing option presents two alternatives: cash-out refinance and the Interest Rate Reduction Refinance Loan (IRRRL). 

The Cash-Out-Refinance is an excellent choice for veterans wishing to cash out from their home equity value. The Interest Rate Reduction Refinance Loan is the most common VA refinancing option. It allows veterans to refinance their VA loan without any needs. The Interest Rate Reduction Refinance Loan does not require proof of credit score.

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4. The Jumbo Refinance

The Jumbo refinancing loan exceeds the limits set by Fannie Mae and Freddie Mac. If you are considering the Jumbo refinancing option, you will be required to present a FICO score of 660, and a maximum debt-to-income ratio of 43%. In addition, the applicant is expected to present a loan-to-value ratio of not more than 80 %, and proof of cash and other liquid reserves. 

The requirements to qualify for the Jumbo refinancing option appear similar to those of conventional refinancing. However, the reality is that the credit score and down payment requirements are not as flexible. 

A home loan refinancing option allows the borrower to take advantage of the borrowed amount. This can be used for paying off the previous loans faster. In addition, refinancing allows the borrower to use the home equity to better manage the debt while lowering the interest rate on the existing loan. Another reason why refinancing has always been a good option is the ability to eliminate the mortgage insurance premiums, imposed on FHA loans. Are you contemplating to apply for the refinancing option, talk to us, the best mortgage lenders in Utah and Arizona! 


Mortgage Lenders in Scottsdale AZ

Hi, I'm Mary

I’m a professional Loan Consultant with over 27 years of experience. There isn’t a scenario I haven’t seen or realized. Let’s connect today and see what’s possible! 🙌🏼

Becky Staples Home Loans Utah

Hi, I'm Becky

I love living in Southern Utah with my husband, son and our dog. LOVE hiking in the beautiful red rocks, running, and yoga. I’m looking forward to helping you for years to come with financing solutions tailored to you!

Arizona Mortgage Broker

Hi, I'm Dallin

Experience is one of the most important things you need in a loan officer when choosing the financing for your home (and that’s what I’ve got!) Some even call me the Superman of Home Loans 😉

Arizona Home Buying Programs

Hi, I'm Parker

Not many mortgage professionals are CPA’s. I bring that extra level of financial expertise to each transaction to ensure you and your family is making the best decision to meet your goals. 👊

Utah Home Mortgage

Hi, I'm Derek

I have a strong passion to help people realize the value of homeownership through a purchase or refinance. Let’s connect today and see what’s possible! 😃

Buying A House in Arizona

Hi, I'm Marc

I pride myself in being reliable and motivated to make sure you are coached through this process and that the experience is one you will appreciate. In my spare time, I love spending time with my family and watching sports movies!

AZ Home Loans

Hi, I'm Rex

I’ve been in the mortgage industry since 1978 and love to fly across Arizona in my single engine airplane to help various consumers learn and obtain a reverse mortgage. Give me a call today!

Home Loans Chandler

Hi, I'm Linda

I’ve been with Sun American Mortgage since 1987 and have always been committed to providing customers with mortgage services that exceed their expectations. I’d love to help you!

Nan Glauser Saint George Utah Home Loans Mortgage

Hi, I'm Nan

I am a mother of 8 children and grandmother of 9. When I am not in the office and helping clients find their best mortgage options, I teach yoga, love to hike Angel’s Landing, and spend time outdoors with my friends and family. 

Article Name
When Refinancing Your Home is Absolutely Worth it and When it’s NOT!
Refinancing a home loan means paying off the current loan and replacing that loan with a new one. There are several reasons to consider the home loan refinancing option.
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Sun American Mortgage
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