Like any borrower, you want a favorable rate on mortgage refinance in Phoenix, AZ, as it can save you a significant amount of money. Even a half-percent rate reduction can mean thousands in savings.

In the interest of helping you find a deal that works to your advantage for mortgage refinance in Phoenix, AZ, we are sharing below some strategies that have been proven to be effective for years.

Consider the following tips:

Shop and compare multiple lenders

With easy access to technology, particularly to the internet, shopping around and comparing deals from different lenders is one effective strategy that helps find one that is a standout from your list of options. Comparison websites offer a comprehensive listing of prospective lenders to choose from, which include business profiles, current rates, among others. So, allocate some time to browsing the internet, you will be surprised how it is going to get you an upper hand in the market.

Achieve a healthy credit score before application

Before you apply for a mortgage refinancing, make sure you have a good credit score. It is one of the factors affecting interest rates. Borrowers usually can secure better rates for conforming refinances with a 740 or higher credit score. That’s the score you should aim for.

Lock in your target rate when you find out

Again, the good thing about internet technology is that it allows you to access several free online tools, which let you know the rates you qualify for in just a few minutes. Using these tools, you can lock-in your target rate, thereby not losing the opportunity to get the deal you want even if there’s a fluctuation until then. A rate lock usually lasts about 30 days, which buys you time from the moment they give you an offer to the time it takes the loan to close.

Pay close attention to your loan-to-value ratio

An LTV ratio is computed by dividing the amount borrowed by the appraised value of the property. For example, if you purchase a home appraised at USD 100k and you make a 20k down payment, you borrow USD 80K, which results in an LTV ratio of 80%. Take note that the lower the percentage means the better LTV. That means, the higher the down payment, the better the chances of getting your target rate.

Consider changing the mortgage terms

If you are planning to get the traditional 30-year fixed mortgage, you may want to reconsider that option. That is because short-term mortgages allow you to get a better rate. Also, you get to pay off your existing mortgage much faster.

Do you want to know more about some strategies to get favorable rates on mortgage refinance in Phoenix, AZ? Talk to a mortgage professional at HomePlus today.

Call us at 800-810-7587.