The Mortgage Brothers Show

If you have not heard the term buy down before, it means that you can pay a one time fee to get a lower Arizona mortgage rate at the time you take out your Arizona loan. Your lender or your Arizona mortgage broker can explain what it would cost you to buy down your Arizona mortgage rate.

A Jumbo mortgage is used to purchase higher priced homes that require larger loans above the loan limits that are established each year by Fannie Mae and Freddie Mac. There is less demand for investors to buy jumbo loans so Phoenix mortgage lenders charge about ¼% to 1% higher interest rates in order to make their profit.

When you purchase a Scottsdale, AZ home or refinance your existing Arizona home, your Arizona mortgage lender will require an appraisal which tells them the appraised value of your home so that they know they are not loaning more money than your home is worth. Since you are using your home as collateral for your Arizona mortgage, the lender wants to make sure that if you default and they need to foreclosure, they can sell your home and the proceeds will pay off the loan balance that you owe so they don’t lose any money.

When you hear about predatory mortgage lending practices the first thing that comes to your mind is fraud and deceitful loan practices involving high pressure sales and collusion of appraisers, lenders and mortgage brokers. Such practices hurt everyone in the community because they cause borrowers to lose their homes to foreclosure and bring down community and neighborhood property values as well. The best way to avoid being a victim of these types of practices is to work with a reputable Arizona mortgage broker. The mortgage broker will help you comparison shop for the best rates and loan products.

Second Arizona mortgages are secured by the same property as a first lien Arizona mortgage. The first lien has priority. The first lien gets paid first if you default. The second lien gets paid whatever amount is left over. If there are no funds left after paying the first off, then the second won’t get paid anything. Second mortgages are normally determined by the equity in your home.

The higher your credit score, the better Arizona mortgage rates you can expect to get. With average scores, you may have to pay fees known as points to lower the Arizona mortgage rate to one that you want. If you have a low score, you may not even qualify. Even with a good credit score these days, you will need to provide financial documentation such as your paycheck stubs, bank statements, income tax returns and a list of your outstanding debts in order to qualify for an AZ mortgage.

Borrowers should be aware of ads for Arizona mortgages that offer very low rates because they may just be teaser rates to get you to look at their loan products. You know the old saying, “if something sounds too good to be true, it probably is”. That is good advice when it comes to choosing a mortgage product. In fact, many banks advertise their best prime rates, but those are not the ones that you may end up with. It is nearly impossible for banks to advertise a set fixed Arizona mortgage rate for all Arizona borrowers because rates depend on your creditor score, credit history, the type of property you are purchasing or refinancing and your income, debts and assets.

One Mortgage point is the equivalent of 1% of your loan. So if you pay two mortgage points at the time you obtain your loan or refinance, you are paying 2% of your loan. Mortgage points are used to allow borrowers to obtain a more favorable loan rate. When you pay points to obtain your Phoenix or Scottsdale mortgage, your lender must provide you with a 1098 tax form at the end of the year. The mortgage points you pay on your purchase loan are deductible during the current tax year providing they meet…

If you are an active duty service member, veteran or the spouse of a veteran who died while on active duty or from an injury related to military service, you may be eligible for a VA Arizona mortgage loan. For specific information, you should talk to your Arizona mortgage broker or visit the VA’s website portal.

It is not uncommon for Arizona homeowners to have a first mortgage and a second mortgage on their homes. Second mortgages are generally equity loans that homeowners take out to pay for medical bills, home improvements, college tuition, vacations, retirement and other personal expenses. Before you take a second Arizona mortgage on your home, you should think seriously about how you will pay it back if your home value declines, you lose your job, become ill or disabled or experience some other financial hardship.

Prepayment penalties are at the borrower’s option and are never mandatory requirements by the lender. Generally, prepayment penalties disappear after five years. The penalty is a percentage of the outstanding loan balance or it can be equal to a specific number of months of interest. If you want to pay 20% of your loan balance, there is no prepayment penalty for most loans.

Is required on conventional mortgages when you make a down payment less than 20%. PMI is required because loans with lower down payments are considered to be higher risk. A typical PMI payment is around .64% percent of your interest rate. So that averages out to be about $106.00 per month if you have a $200,000 Arizona mortgage on your home.

Fannie Mae, Freddie Mac, FHA and VA all have guidelines that they set for borrowers who have had a short sale, pre-foreclosure, AZ foreclosure or Arizona bankruptcy to obtain a new mortgage. The waiting period for a short sale is generally two years with the exception regarding FHA, if you were not late on your payments and were relocated because of a job transfer.

Is required for all FHA Arizona mortgages. The appraiser must be on the FHA’s approved list. The lender will choose one of the FHA approved appraisers to conduct the appraisal. The borrower is never allowed to select the appraiser. However, the borrower pays for the appraisal. The appraiser who is chosen to do the appraisal is the only one who can perform and sign the appraisal report.

Mortgage modifications are when your lender modifies your current Arizona mortgage by either reducing your principal, lowering your interest rate and extending your loan term or a combination of any of those terms so that you have a monthly mortgage payment that is more affordable for your financial situation.

Although every situation is unique, it is not uncommon for Arizona homebuyers to qualify for a mortgage on a new home while still living in their primary residence.

Perhaps you are outgrowing your current house, or have been forced to relocate due to a job transfer? Regardless of the motivation for keeping one property while purchasing another, let’s address this question with the mortgage approval in mind: