Refinance in Utah

Many homeowners in Utah now have increased tappable equity, and they can utilize a cash-out mortgage refinance to achieve their financial goals.

Do you want to refinance your mortgage loan but aren’t sure how to begin? Our guide to the best mortgage companies for refinances and the refinance process will make getting your new loan in Utah less stressful. 

Refinancing your home can be a powerful tool to reduce monthly payments, tap into equity, or even shorten your loan term. However, navigating the ins and outs of refinancing in Utah requires a solid understanding of the local market and potential pitfalls. To steer clear of costly mistakes and unlock the full potential of refinancing, let's explore what you need to consider before making this critical financial decision.

Best Refinance Lenders in Utah

As a homeowner in Utah, you’ll have your choice between dozens of local and online mortgage companies to service your new loan. Not sure where to begin? Compare a few of the best refinance mortgage companies currently offering loans in Utah below. 

Current Utah Refinance Rates

When you refinance a mortgage, you’ll lock into a rate that’s in line with current market rates. Waiting to get the lowest rate possible can mean thousands of dollars saved by the time you own your property.

View current refinance rates in Utah with the table below. We update our information regularly to ensure that you have the most up-to-date refinance data available.  

Refinance Process

Most homeowners consider refinancing to be significantly easier than getting their 1st mortgage loan. Here are a few of the steps you should expect when you make the decision to refinance.

• Establish your goals. Before you apply for a refinance, you need to decide what you need from your new mortgage company. Do you want a lower monthly payment? Are you looking to take advantage of lower interest rates? Do you have credit card debt that you want to pay down? Define your goals before moving on so you can more effectively compare companies that offer refinances.
• Compare lenders. There are many mortgage lenders offering refinancing services in Utah — and not every lender offers every type of loan. After you know what you’d like from your refinance, start comparing lenders operating in your area that have what you need.

Each mortgage lender will offer its own unique benefits and drawbacks. For example, if you’re interested in a fast and streamlined mortgage process, you might want to consider refinancing with the help of Quicken Loans’ Rocket Mortgage platform. If you value in-person service, you might be more comfortable refinancing with a local lender like Wells Fargo.

• Apply for a refinance. After choosing a lender, you’ll submit a mortgage application using your lender’s process. Many lenders now offer 100% online applications and you’ll likely get a decision instantly after applying. The specific documentation you’ll need to apply for your refinance will vary depending on the type of refinance you need and your lender but be prepared to submit your last 2 W-2s, bank statements, and pay stubs.
• Lock in your rate. When you’re approved for a refinance, your lender will often give you the opportunity to lock in your interest rate. When you lock in your rate, your lender guarantees that your interest rate won’t change during the rate lock period, usually 15 to 60 days after you’re approved. During the rate lock period, your lender will underwrite your loan. If your loan doesn’t close before the rate lock period ends, you might be required to pay to lock your rate in further.

You might also have the option to “float your rate,” which means that you don’t lock your rate in until you close. While this might give you access to lower rates if market rates fall, it can also mean taking on a higher interest rate if market rates rise. It’s usually a good idea to lock in your rate if you’re satisfied with the rate you receive when you apply.

• Wait for underwriting to conclude. During underwriting, your lender verifies your financial information and the details of your property. This might mean scheduling a new appraisal for your home, running a credit check, and verifying your income and assets.
• Attend a closing meeting. Once your lender finishes underwriting your loan, it’s time to close. During closing, you’ll sign on your new mortgage loan and pay anything that you owe in closing costs. If your lender owes you money (for example, during a cash-out refinance) you’ll typically receive it a few days after closing. 

When Should You Refinance in Utah?

There are many situations where a refinance in Utah makes sense. You might want to consider a refinance if:

• You can’t pay your mortgage every month. A lost job, a car emergency, an unexpected home repair — there are an endless number of hazards that can throw off your budget. One of the biggest reasons why homeowners refinance their loans is because they’re having trouble making their monthly mortgage payments. Refinancing your loan to a longer term allows you to pay less each month by extending the amount of time you have to repay your remaining principal.
• You have an FHA loan and you own 20% of your property. If you have an FHA loan, you’re probably familiar with the monthly FHA insurance you must pay on your principal balance. Unlike the private mortgage insurance (PMI) requirement that comes with conventional home loans, you cannot cancel your FHA insurance at any point.

There’s an easy workaround to get rid of your FHA insurance so long as you have at least 20% equity in your property. Refinancing to a conventional loan from an FHA loan removes the FHA insurance requirement while also dodging the PMI requirement for borrowers who have a down payment of less than 20%.

• You have debt that’s piling on interest. The average credit card has an interest rate between 15% and 27%, while mortgage interest rates tend to be around 4% each year. If you have credit card debt, auto loan debt, or another type of debt-building interest, you can save money by paying it off with a cash-out refinance.

A cash-out refinance is a special type of refinancing that allows you to tap into your home equity. For example, let’s imagine that you have a home loan with $200,000 remaining on the principal and you need to pay down $5,000 worth of credit card debt. If you take a cash-out refinance, you’d accept a loan worth $205,000 and your lender would give you $5,000 in cash after closing to get rid of your debt. 

When Should You Not Refinance?

Though there is no limit on the number of times you can refinance your loan, refinancing isn’t always a good idea. If any of the following apply to you, you might not want to refinance.

• You can’t afford closing costs. Refinances, like new mortgage loans, require you to pay closing costs when you finalize your loan. Though you might have the option to roll your closing costs into the value of your loan, this usually means taking a higher interest rate — and paying more over time. If you can’t afford your closing costs, you might want to wait a few months until you can pay the full required amount in cash.
• Interest rates are higher now than when you got your loan. When you refinance your mortgage, you take on an interest rate that’s similar to current market rates. If rates are higher now than they were when you got your loan, you might end up paying more after you refinance.
• You just got your loan. Most lenders won’t allow you to take more than 80% to 90% of your equity from your home. If you’ve only been paying on your home loan for a few months, you might only have a few thousand dollars’ worth of equity since most of your mortgage payment goes towards interest in the first few years of your loan. If you aren’t sure how much equity you have in your property, contact your lender or check your most recent mortgage statement. 

Bad Credit Refinance

If you have a low credit score, you might still be able to refinance. Let’s take a look at a few methods you can use to refinance when you have a low credit score.

• FHA streamline refinance: An FHA streamline refinance is an abbreviated refinance process that doesn’t require an appraisal or a credit check. To qualify for an FHA streamline, you must already have an FHA loan, you must only be refinancing your rate or term and you must not have missed a mortgage payment for the last 12 months.
• VA IRRRL: A VA interest rate reduction refinance loan (VA IRRRL) also allows you to refinance your rate or term without a credit check, appraisal, or income verification. To qualify for a VA IRRRL, you must already have a VA loan, you must have made at least 6 consecutive on-time loan payments and there must have been at least 270 days between your original closing date and the date you refinance.
• Add a non-occupying co-client to your loan: If you know someone with great credit, you can use it to your advantage by adding him or her as a non-occupying co-client on your loan. A non-occupying co-client is someone who accepts financial responsibility for your loan but who doesn’t live in your home. If you default on your loan, your lender can pursue your co-client for the remaining balance on your principal.  

Frequently Asked Questions