Refinancing vs. buying a home in Utah: Which is the right move?

With home prices still on the decline, many homeowners have decided to remain in their current properties and try to make them more affordable or livable through refinancing.

Although buying a home in Utah is still a popular action, the rate of these purchases declined somewhat in the last week. In addition to the 11.2 percent drop in purchases, as reported by the Mortgage Bankers Association (MBA), home sales also take up a smaller share of total mortgage applications – 29.5 percent to 24.8 percent. With this drop in purchases comes a 13.5 percent increase in refinance arrangements over the last week and a 2.36 percent climb in the last month.

Part of the reason for this shift is the decline in mortgage interest rates, which dropped last week after coasting north of 4 percent for the better part of the last month. Interest rates on 30-year loans fell from 4.10 to 4.05 last week, making refinancing even more affordable for current homeowners.

"Renewed concerns about sovereign debt in Europe led to a drop in rates last week, with the 30-year rate tying our survey low, reached in early February," MBA chief economist Jay Brinkmann said in a statement to the press.

When deciding whether to refinance or purchase a home, consumers need to keep pricing among their chief concerns. The average loan required to purchase a home increased in March to approximately $233,000, while the average home refinance cost dropped to about $214,500.

A Utah mortgage company can help consumers decide between these two financing options and may be able to help them save a considerable amount of money as they settle down in the Beehive State.

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