Lowest Refinance Rates in Arizona: How to get them
Everyone in Arizona wants the lowest refinance rates possible when the refinance or buy a home.
How do you get the lowest refinance rates in Arizona?
The easy way is to be prepared. Have a complete mortgage application submitted to a local mortgage lender and have them watch the rates for you. By having your application done and ready to go, you’ll be able to wait for just the right moment to refinance. With just quick call you can your lender lock in that low rate before it goes away.
Rates are expected to drop for the rest of this year after already being at historical lows. There’s a catch however. When rates have hit these once in a lifetime lows they haven’t stayed there for long. There’s always some news that moves the stock and bond markets and mortgage rates follow close behind.
Working with a local mortgage lender in Phoenix, you can get advice on the right type of loan and the right term. A local lender can also advise you on anything you should change that could improve your application (typically your credit score or debt ratio).
When rates drop again, you’ll have the hard work done and can pounce on those rates right away.
How do you prepare yourself for the lowest refinance rates?
You Need Good Credit
You don’t need perfect credit to get the lowest refinance rates in Phoenix, AZ, but the better your credit the lower your rate. Aim for a credit score of at least 720 or higher. This shows lenders that you’re financially responsible. To get this credit score, make sure you:
- Pay your bills on time
- Don’t charge more than 30% of your credit lines
- Don’t open new accounts
- Don’t close old credit card accounts
You Must Document your Income
The days of ‘stated income’ loans are behind us, thanks to the housing crisis. Today, you must document your income if you want the lowest refinance rates in Arizona. Documenting your income means providing:
- Paystubs for the last 30 days
- W-2s for the last 2 years
- Tax returns for the last 2 years if you are self-employed or work on commission
- Bank statements for the last 2 months
- Letter of Explanation for any gaps in employment or other unique circumstances
Watch your Debt Ratios
Next to your credit score, lenders look closely at your debt ratios. The comparison of your monthly debts to your gross monthly income tells lenders how much of your money you already have committed each month.
Aim for a housing ratio of 28 percent and a total debt ratio of 36 percent. This means your mortgage payment (principal, interest, taxes, and insurance) doesn’t take up more than 28 percent of your income before taxes. Your total debts, which are your credit cards, student loans, car loans, personal loans, plus your mortgage payment shouldn’t cost more than 36 percent of your income before taxes.
If you want the lowest finance rates in Arizona, prepare yourself now. Contact Chris Sicz at EducatedLender to see what you need to work on before you apply for a mortgage. Take the time now to prepare your qualifications and you’ll have access to the best interest rates and best terms available on a refinance today.