Applying For An Arizona Mortgage

Arizona is a state that many people tend to prefer because of its wide open land, and the cleanliness of the air. In spite of its extreme heat, people flock to the state as a way to escape allergies and other upper respiratory conditions. With that in mind, it is likely that many people flock to Arizona looking for an Arizona mortgage so that they can improve the state of their health. That might make some people think that there will be a shortage of land in this mid-western state, but with so much land within its borders, its unlikely that anyone wanting to move to Arizona is going to find a problem finding property.



Even with its vast deserts, the climate is preferable to that of other states for many conditions. That sends many flocking in for an Arizona mortgage so that they can begin to enjoy life.



The first thing you want to do is choose where you want to live, and then choose the Arizona mortgage lender that best meets your needs. You want someone who has good customer service, efficient telephone answering system, and impeccable business and professionalism skills. You certainly don't want to call your mortgage company and find that you have to hold for ten or more minutes nor do you want to ask a question and be snapped at by a customer service representative as if you interrupted their day by calling.



Choose a lender who puts the customers first and isn't afraid to go that extra mile to make sure that you have everything you need. An Arizona mortgage broker has access to many different lenders throughout the state and can place your mortgage with a lender who meets all of your requirements.



In the long term, finding an Arizona mortgage will be easier if you enlist the services of a mortgage broker because of not only their expertise, but also their contacts.



Brokers have access to many different lenders and can arrange for your mortgage to be placed with one of many different lenders. Brokers have inside connections that even real estates agents do not have, and often have special arrangements with the lenders with whom they work. With these special arrangements between broker and lender you may obtain a lower interest rate than you had originally received from another Arizona mortgage company. The broker handles all of the application processing, and though it may cost you a little bit, it's worth the cost to hire a mortgage broker.

First Time Home Buyers - Get Your Top 5 Mortgage Questions Answered Here!

Buying a home for the first time can be a little rattling, as it is a huge financial investment and responsibility that will stay with you for years. If you are not familiar with how to buy a home and get a mortgage, then use this information to get a little insight as to what a mortgage is, and how one is obtained.



By understanding the basics of a mortgage, you are more likely to get a better deal and mortgage that best fits your financial profile.



Question 1: What is mortgage and where do you get one?



Answer 1: A mortgage is a conveyance of or lien against property that is terminated upon complete payment according to pre-determined terms. More simply, a mortgage represents the money you borrow from a lender in order to purchase a house. You must pay interest on the money borrowed in return for having borrowed the money in the first place.



You can find mortgage lenders everywhere, as the mortgage industry has greatly increased as there are more opportunities for people to buy property.



More and more money is being circulated through this market because of two reasons. One, investors recognize the opportunity for a high return on investment through mortgages. And two, the government is pushing for the ability for every American to be able to live the "American Dream" and purchase a house.



Mortgage lenders can be private investors or companies, as well as public companies, commercial banks, and other financial institutions such as a credit union.



There are mortgage officers and brokers that can aid you in finding a good mortgage from a qualified lender. You can also shop mortgages yourself by calling different institutions and asking for their rates and terms.



If you go online, there is a myriad of websites that will shop 4-5 lenders for you all at once, so you can get an idea as to the mortgage you could qualify for. Finding a good mortgage will take time and energy, especially if you shop around, which is highly suggested.



Remember that terms are negotiable, so don't take the first offer you get.



Question 2: How long does the mortgage process take?



Answer 2: The actual process of applying for a mortgage and closing takes anywhere from 30 to 90 days, depending on the mortgage lender and the situation with the property. It may differ slightly from case to case, but generally, this is how long it takes. However, you may take weeks, even months shopping for a lender that is best for your situation, depending on what it is you need to buy the house.



Those home buyers with a good financial profile may find good terms more quickly then those with poor financial profiles. Also, it depends on when the property will be available, moving times, perhaps a contingency like the sell of another property for the seller etc. It is important to create a timeline for this process by assessing both your needs as well as the mortgage lender's needs. You so not want to cut things too short, or be without money for the close of escrow.



Question 3: What mortgage rate is better: fixed or adjustable?



Answer 3: Whether or not one mortgage rate is better than another is really up to the home buyer's needs.



The rates alone are not better than the other. If the home buyer wants a slightly higher interest rate, but steady payments every month for the life of a loan, then a fixed rate mortgage is the way to go. There will be no fluctuation of interest rate and therefore payments are constant.



If the home buyer wants to take a lower interest rate in the beginning, with the chance for the payments to be higher or lower based on the current market rate, then the adjustable rate mortgage is the way to go.



Depending on the terms, the interest rate will either be higher or lower than the initial rate, depending on the current market rate every few years or so. The payments could potentially change drastically and the home buyer needs to be aware of this risk.



There are many other rate structures and mortgage lenders have gotten very creative by combining different types of mortgages and rates. Ask your mortgage lender for other options than just your basic adjustable and fixed rate mortgages.



You may find something that would work better for your situation.



Question 4: What are points?



Answer 4: Points are a percentage of the principal amount of a mortgage that is paid upfront to the mortgage lender in exchange for a lower initial interest rate. For example, if your principal $200,000 and you are asked to pay 1 point, then you would pay $2,000 to the mortgage lender.



You must calculate the different scenarios with out without points, because sometimes is disadvantageous to pay points and get a lower interest rate, because you still end up paying more with the points than you would with a slightly higher interest rate with no points.



Generally, points are a way for mortgage lenders to make profit very quickly and upfront. Do your homework before you agree to any terms so you don't spend more money than you have to.



Question 5: What is the loan to value ratio (L to V Ratio)?



Answer 5: The loan to value ratio is used to determine how much money you can borrow on the property. It shows the amount borrowed on the property as a percentage of the total current market value of the property. For example, let's say your property is worth $500,000, and you have a loan principal amount of $350,000.



You would divide your loan amount ($350,000) by the current market value ($500,000) and you get 70%. The loan to value is 70%.



Mortgage lenders usually do not loan more than 80% of the current market value, and they use this in addition to your financial profile to determine how much you can actually borrow as well as pay back in full and timely manner.



There are mortgage lenders, known as sub-prime lenders who will let a home buyer borrow 100% of the current market value, as well as a little more to help with closing costs.



There are also many government programs and other options that allow home buyers to purchase property with little to know down. Investigate these options to see if they would allow you to get into a home if your financial profile is not so good.



There are options for everyone, so do some research and get all of your questions answered so you are educated and prepared when moving into the mortgage process.

Mortgages: Encouraging Stronger Personal Economic Growth

Monetary policy of every individual works though different channels. Financial conditions are fluctuating always making way for loopholes in your particular economy. Being a homeowner equips you with the ability to take on mortgages for sustained economic expansion. You have already completed the first major task for getting mortgages, i.e. buying a home. Now, we can safely move on the other part of the process.



The market for Mortgages is huge and there is an exhaustive list of types of mortgages available.



Therefore, it is important to realize which mortgages type you need and how much you can afford. Mortgages are secured loans. For the entire mortgages term which can range form 25-30 years the lending institution or the bank will hold the title to your loan. In case of non repayment your home will be on risk of repossession.



It is crucial to shop for mortgage loan and rates. Often borrowers neglect the importance of shopping around in their enthusiasm of finding the good rates.



The effort that you will put in as researching for mortgages will bring great returns as better interest rates and repayment alternatives.



While searching for mortgages you must be looking at interest rates. Lenders who provide mortgages are part of a profit making process. They would charge interest rates with the idea of making profit but will avoid charging more for they might loose a customer to a competitor. For that reason shopping around becomes essential.



While shopping for mortgage you will be looking for APR. It is the actual amount of interest rate that is charged for the entire term of loan. Though it is vital factor but that should not be the sole criteria for applying for mortgages.



Loan term is basic to mortgages. The most common type of fixed rate mortgages is 15-year mortgages and 30-year mortgages. The monthly repayments of 30 year mortgages will be lower than 15 year mortgages.



However, your will be paying more interest rates in a 30 year mortgage. With 30 year mortgage you will get a tax right-off which can be sizeable. With 15 year mortgage you will just be paying taxes without any savings.



Two basic types of mortgages are fixed and adjustable rate. With fixed rate mortgage you owe certain percentage of loan amount as interest rate. Interest rate remains fixed for entire loan term which can be 15 or 30 year mortgages.



The disadvantage with this mortgage type is inability to make use of drop in interest rates.



Other major type is adjustable rate mortgages (ARM). The interest rates changes according to the interest rates in the mortgage market. The first year interest rates are generally lower than market rates. There is an upward limit above which the interest rates can't go. However there is always the disadvantage of not being able to make use of drop in the interest rates.



The above two types of mortgages are the major ones while the other types are derived from either or contain the characteristics of both of them. Balloon mortgages have fixed interest rates for a particular period of time. After that the entire loan amount has to be paid back in one go. This will push the borrower to start on another mortgage borrowing task. But if you are unable to find new mortgage, you stand loosing your home.



The advantage with balloon mortgages is low initial payment. Balloon mortgages also have a conversion option and you can change balloon mortgages to another type.



There is also something called two-step mortgages. They combine characteristics of fixed and variable rate mortgages and have names like 2/28, 5/25 or 7/23. A 2/28 will have two years of fixed payment, an adjustment and then remaining term with fixed payment.



Similar pattern will follow for other mortgages. Bi weekly mortgages enable you to make payment bi weekly instead of monthly. This mortgage is used to shorter the term of 30-year-old mortgages. Bi weekly mortgages are a great tool for budgeting but won't be of good help when faced with emergency money requirements.



There is not a mortgage that refuses to solve your financial dilemma. Interest rates have fallen, equity prices have raised - this is the best time to apply for mortgages.



If you have plans in the pipeline there is not better way to get them materialized than acquiring mortgages.

What about Taxes and Your Second Mortgage?

For the average consumer who has managed to acquire credit card

debt, automobile loans, and various other small debts, is the

second mortgage loan an answer for the consolidation of debt and

a tax reduction? Quite often the answer to this question is yes.

Second mortgages that have traditionally been used in areas of

home improvement, funding college educations or business

startups are now being considered as a means to eliminate or

consolidate high-interest credit card debt and create a tax

deduction at the same time.



For the average consumer, using second mortgage loan money to

pay off credit card debt or to consolidate individual personal

loans does not eliminate the possibility of a tax reduction;

especially if that average consumer does not already own a

second home. The only problem here seems to be that we're

replacing credit card debt for second mortgage debt; what do we

then do with the credit card we've paid off? The smart consumer

cuts them up.



How does a second mortgage affect your tax liability at the end

of the year? A lot of that will depend on your income levels,

your medical expense, and your other interest deductions.



Mortgage interest expense is deductible on the Schedule A

"Itemized Deductions" form of your individual or personal tax

return. The Schedule A, however is not a straight tax reduction

tool. Tax reductions, or deductions, carried forward from the

Schedule A are a percentage of your AGI, or your adjusted gross

income. Your adjusted gross income is based upon your income

less certain expenses and deductions from Schedule Cs, Schedule

Es etc. etc. Can you now see where this might be a little

complicated?



Let's throw something else into the mix: if you're an investor,

especially in the real estate market, your mortgage interest may

not be deductible, period.



Mortgage interest on your first home

and on your second home is a tax-deductible interest; if

however, you happen to be an investor in the real estate market

the ability to make it clear distinction between first and

second homes versus investment property becomes much harder to

prove. Is the home a second home with deductible mortgage

interest expense, or is it an investment? Of course, for

investors interest expense on a loan for investment purposes is

fully tax deductible; no percentages to work with at all.



Now let's ask another question, if you decide to take out a

second mortgage could you better invest your money? What a

401(k), an IRA, or an MSA be a better benefit when it comes tax

time versus leading the money in your home as equity? This has

been a question long debated by financial analysts, tax

attorneys, and fairly tax proficient homeowners. How does the

equity better serve the homeowner? As a savings account, which

is really what the equity in your home turns out be, or as an

investment tool that can be used to increase your retirement

savings? There are other factors to be considered here: such as

penalties for early withdrawal, risk ratio versus profitability

ratios, and which programs reduce tax on a one-to-one ratio?

Unless you already have some general knowledge of the tax

system, it can be more expensive to determine tax savings than

you would actually save.



As you can see there are many, many ways to affect your tax

liability, your tax deductions, or affect a tax reduction; the

correct answers are highly dependent upon the individual

situation and the individual objectives. The only way to

accurately determine the better benefit is to sit down with a

financial advisor, your tax information, and evaluate your

long-term objectives.



Does the average consumer ever take the time to accomplish this?

As a general rule the answer is no. Most consumers never take

the time to look past next month.



Over the course of a stressful

and busy work week retirement planning, tax deductions, and

income producing benefits never cross the consumer's mind. For

those individuals who truly anticipate and receive benefit from

tax planning in relation to their mortgage interest, there are

many more individuals who never even contemplate that there

might be a savings. Maybe, we should just skip this question.