Is now the time for an Arizona refinance?
And here are just a few reasons why.
Arizona Refinance Reason #1: Interest rates are low and probably won’t move much lower.
Because of the actions taken by the US government over the last few months, interest rates are lower now than they have been in generations. Will they go significantly lower? Probably not. What is happening now is that the lending institutions are using interest rates as a way to control volume. They already have more loans than their operations staff can handle (some lenders are on 45 day turn times right now) and when this happens, they use interest rates as a way to slow down the volume of loans they are getting.
Arizona Refinance Reason #2: Guidelines are tough and probably only going to get tougher.
In the last couple of weeks, we have seen 2 major guideline changes: first, lenders are now requiring a 620 mid score for all FHA loans ( Arizona FHA streamline and Arizona VA streamline loan programs included) and second, FHA issued a new rule allowing up to 85% cash out for an FHA refinance, down from 95% previously. In the last 12 months, guidelines have become significantly tougher – and I don’t think we have seen the last of tightening guidelines.
Arizona Refinance Reason #3: The Obama Refinance is now available.
Lenders are now taking applications for the “ Obama refinance” – aka “the underwater refinance” plan. This plan is now in place where you can refinance your home even if you owe (slightly) more than it is worth. True, many people in Arizona who want to do an Arizona refinance probably won’t be eligible for this plan because they are 20-50% upside-down, but it will help a few.
Will the environment for refinancing get better in the future?
Maybe, but don’t count on it.