Refinancing Into a Conventional Loan in Utah: Is It Worth It?

Conventional Loan

Refinancing Into a Conventional Loan in Utah: Is It Worth It?

Reviewed by the HomeMath editorial team Updated 2026-08-06

Key takeaways

You can eliminate PMI by having 20% equity when you refinance into a conventional loan.
Typical closing costs are 2%–5% of the loan amount, and they can be paid upfront or rolled into the new loan.
A conventional refinance may be worthwhile if you can secure a lower rate, reduce your loan term, or tap home equity for cash.

Why Consider a Conventional Refinance?

A conventional loan is not backed by a government agency, so it often offers more flexibility on loan terms, fewer restrictions on property type, and the ability to remove private mortgage insurance (PMI) if you have enough equity.

Key Requirements for a Conventional Refinance in Utah

To qualify, lenders typically look at three main factors:

Equity: At least 20% equity is usually needed to avoid PMI. The equity requirement exists because the lender wants a cushion of value in case the borrower defaults.
Credit Score: A higher credit score reduces perceived risk, allowing the lender to offer better rates.
Debt‑to‑Income Ratio (DTI): Most lenders prefer a DTI of 43% or lower, ensuring the borrower can comfortably handle the new payment.

Cost Factors to Expect

Refinancing isn’t free. Expect the following typical expenses:

Application and underwriting fees.
Appraisal fee to confirm current market value.
Title‑company closing fees, which are common in Utah and replace attorney‑driven closings in many cases.
Recording fees charged by the county.

All of these items usually add up to about 2%–5% of the loan amount. You can either pay them out‑of‑pocket at closing or roll them into the new loan balance, which will increase the loan amount but spread the cost over the loan term.

Utah‑Specific Considerations

Utah’s relatively low property‑tax rates can make a refinance more attractive because the overall monthly housing cost may stay lower even after adding any rolled‑in closing costs.

The state also offers a first‑time‑homebuyer assistance program through the Utah Housing Corporation. While the program mainly supports purchases, some borrowers may qualify for reduced‑interest refinancing if they meet the program’s income and occupancy criteria.

This article provides general information and does not constitute personalized financial advice. Consult a qualified mortgage professional to evaluate your specific situation.

FAQ

Can I refinance an FHA loan into a conventional loan?

Yes. Switching from FHA to a conventional loan can eliminate the FHA mortgage insurance premium, but you’ll need to meet the conventional equity and credit requirements.

Do I have to use a title company for the closing in Utah?

Most Utah transactions close through title companies, which handle title searches, insurance, and the recording of documents. An attorney can still be involved, but it’s not required by law.

Will rolling closing costs into my new loan increase my interest rate?

Rolling costs raises the loan balance, which may slightly increase the monthly payment. However, the interest rate itself is set based on your credit profile and market conditions, not the loan amount.

How does my credit score affect the decision to refinance?

A higher credit score signals lower risk to lenders, often resulting in better interest rates and lower fees. If your score has improved since you first obtained the mortgage, refinancing could be more advantageous.

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