Which States are Best for Refinancing?
Many homeowners are reevaluating their financial and geographical situation in the wake of a global pandemic that has brought so many changes since early last year. Efforts by the feds to keep interest rates low and head off a worsening economy have resulted in many people buying as well as refinancing their existing mortgage. In fact, with lower rates and increasing home values, the 2020 refinance market reached the highest annual total since 2003.
Refinancing Where You Live
While there can be several reasons to replace your current home loan with a new mortgage, the biggest motivating factor is to save money. If interest rates are lower than when you purchased, and your home has been gaining equity then you may be considering a refinance program.
Does the state in which you own impact your chances of qualifying as well as the interest rate you can expect to pay? Absolutely. We looked at data around the country and established the best states for refinancing, based on approval rates, median loan amounts and appreciation.
1 | South Dakota
There’s more to South Dakota than Mt. Rushmore, with its high scores in quality of life and a lower cost of living. The median loan amount is currently a little over $200,000 and it has an encouraging approval rate of 91%.
2 | Utah
Utah is seeing a lot of growth, with homebuyers gravitating to Ogden and Provo as well as Salt Lake City. The state also offers competitive interest rates and an approval rate for refinancing over 90% – well over last year’s 82%. The average loan value is around $275,000.
3 | North Dakota
North Dakota is also proving to be a great place to refinance, with an approval rate over 90%. In addition to a median loan amount of $225,000, North Dakota boasts a home value appreciation of almost 100% from 2009 to 2019!
4 | Nebraska
Refinancing your home in Nebraska is affordable and chances are good for qualifying. The approval rate is just over 90% and the median loan amount is less than $200,000. Home values there have increased more than 12% in the past year.
5 | Iowa
Another state that ranks well for refinancing is Iowa. It has an 89% approval rate, which is a jump from last year, and their average loan amount is $175,000.
Refinance qualification rates are also encouraging for homeowners not in the Midwest. Colorado, Washington, Arizona, Oregon and Massachusetts all have approval percentages just shy of 90, with a notable home value appreciation in Colorado. Florida and New York can be a little tougher to qualify, but they still have refinancing approval rates over 70%.
Mortgage rates for refinancing will vary state by state so you’ll want to check the current rates and talk to a lender about the best programs available in your particular region.
Ready to Refinance?
The bottom line is that high approval stats and low interest rates in all 50 states makes refinancing an attractive option for many homeowners. If you’re ready to save money or leverage your home’s equity for some extra cash, there are a few initial steps to take that can help streamline the process.
- Check your credit rating and resolve any errors or issues you find. The average score in the top five states for refinance approval is 762, but many lenders can work with lower.
- Prepare your documents. Have your current mortgage, pay stubs, tax returns and records of assets ready for application.
- Check your neighborhood for recent comparative sales or use an online calculator to get an idea of the current value of your home. An appraisal for the refinance process will make it official.
- Shop around. No matter which state you own your home in, there are choices in lenders and in programs. Also, there is no obligation to refinance with the original bank or broker.
Our team at Titan Mutual Lending (Titan) are always available to answer questions and discuss your refinance needs – wherever your neck of the woods is. Connect with our expert bankers today for more mortgage refinancing solutions.