Home Buyer Tips | Arizona Mortgage

My Blog

Archive for the ‘Home Buyer Tips’ Category

off

Experiencing ‘Purchase Anxiety’? How to Calm Your Nerves Before Committing to Buy a New Home

Experiencing 'Purchase Anxiety'? How to Calm Your Nerves Before Committing to Buy a New Home Whether this is your first big purchase, or your family is moving to a new location or looking for more space, buying a home has its share of ups and downs.

It’s perfectly normal to feel anxious about whether or not you’ve found the right property. Here are some things you can do to make yourself feel more secure with your decision.

Do The Math

You’ve probably already done this, but it’s okay to go over it a number of times to be sure. Factor in your household income and all the bills you expect to pay every month. Add everything up.

It sounds like a stressful activity, but when you look at the numbers and realize that buying a home is actually doable, it can be a liberating feeling.

When you know for sure you can make it as a homeowner without getting underwater, you will feel more confident.

Meet The Neighbors

If you haven’t had the chance to knock on a couple of doors yet, you should spend some time saying hello to people in the neighborhood. The more you can get to talking with families that are just like yours, the more you will be able to picture yourself as a member of the community.

If you have kids, find out if there are other kids the same age nearby. That will help to ease their anxiety about moving as well.

Ask Your Agent

Don’t feel like you are being overly cautious if you ask your real estate agent and or mortgage professional your lingering questions. Make sure you’re getting a good price for the area, and make sure you know about any issues with the condition of the property.

You should be able to trust that your realtor and mortgage professional are excited for your decision.

Familiarize Yourself With The Neighborhood

Take a drive and figure out which stores you’re nearest to, the route you can take to get to work, and which other amenities you might take advantage of. Home buyers often underestimate how important living in a safe neighborhood with plenty of accessible businesses can be.

The more you can imagine yourself living at your new address, the better you will feel.

Remember, never sign the papers on a new home unless you feel one hundred percent secure in your buying decision.

off

Five Absolute Truths About the Home Buying Process That You Will Need to Come to Terms With

Five Absolute Truths About the Home Buying Process That You Will Need to Come to Terms With Buying a home is one of the most exciting times that an individual will undertake in life. However, a property purchase is not without its challenges, and these can cause frustration. In this article we’ll share five potential setbacks that home buyers will need to understand and come to terms with to make a successful purchase.

Homeowner’s Insurance is Necessary

Most lenders will require insurance before financing is approved. To fulfill these requirements, the policy should be for at least one year and proof that the policy has been paid for must be presented. Purchasing the policy is something that must be done before closing can take place, so if you’re sure that this is the home for you, don’t delay.

Some Sellers Are Firm, No Matter What

In an ideal situation, the buyer and the seller come to a mutual agreement very easily. However, in most cases negotiation of some type is likely to be a part of the process. As with most negotiations, to reach success both sides will need to compromise.

Probate Properties Have Special Terms

When the original homeowner has died, there are certain considerations to keep in mind that do not typically apply to other types of property. One is the fact that there is a special process that must be completed before the property can be sold, even though the heirs may advertise the property as being for sale ahead of time. Another factor to keep in mind is that a recently probated property may have been uninhabited for some time and will be sold ‘as is’.

Loan Offers May Not Be Set in Stone

A common pitfall for many buyers is the assumption that home financing will be approved without issue. Unexpected circumstances may arise that cause a mortgage loan to be denied, which can cause an unprepared buyer numerous issues. Many sellers, in anticipation of such problems, have a contingency requirement.

Expect Caution from Sellers

If a seller treats your offer with caution or trepidation, don’t take it personally. Many homeowners have been burned during previous sales, and you have no idea what the seller has been through with potential buyers this time around. If someone is exercising caution, there’s likely a good reason for it.

off

Buying a House or Condo? Why the Home Inspection Process is One You Won’t Want to Skimp On

Buying a House or Condo? Why the Home Inspection Process is One You Won't Want to Skimp On Once you have found that perfect home with the right price and every little feature you were hoping for, it’s important to keep in mind that the home has been presented in a way that accentuates its highlights and shadows any flaws. For this reason, it is crucial that you get a home inspection before completing a purchase.

Many sellers also have inspectors investigate the home in order to determine its sale value. As such, they should be aware that a prospective buyer will want to request an independent inspection to verify the findings.

Reasons For Home Inspections

If you are the one purchasing the home, getting an inspection is likely to be the most important investigation you need to perform to ensure you are getting the best value. It can also help to know what reasons each party has for requiring a home inspection.

Buyers, for example, feel peace of mind knowing the home in question is safe. They also gain the ability to negotiate in the event a problem arises from inspection, or they can request repairs first. They can also opt out if the problems that arise are too overwhelming to deal with prior to or after the purchase. Finally, buyers can learn about the kind of maintenance and upkeep be required for the home in the long run.

Sellers, on the other hand, want to make the transaction as smooth of a process as possible to prevent issues that could slow down the sale. They can also learn about any problems they need to repair before putting the house on the market, and they can determine the sale price for the transaction. Lastly, this allows the seller to prove their transparency by having an inspection report available, even though he or she should expect that the buyer should be requesting an independent home inspection regardless.

It should be evident, having an inspection conducted is vital for buyers and sellers alike; though the price might seem costly at first, it is merely a small fee that is well worth the effort to solidify a home purchase.

Finding A Home Inspector

The first thing to keep in mind is that most states lack a licensing process for those who inspect homes. If your state does not have such criteria, finding an inspector in good standing with a nationally recognized organization can help as well.

It is very important not to take a seller’s inspection report at face value, no matter what kind of reputation they may have as a person. You might not even want to accept an inspector that someone else hires since they may have a vested interest that can influence the report.

Keep in mind that a general inspector is not typically licensed to check for specific issues like gas or pests. As such, you will need to either seek someone who is licensed for a full inspection or specificaly request inspection for pests, especially for those in high risk areas.

off

Three Ways That Your Credit Score Affects Your Mortgage (and Your Chance of Obtaining One!)

If you’re thinking of buying a home, you’ve probably been thinking a lot about your credit score as well. Credit scores control so much of what we do in the world of finances, but what does your credit score really have to do with your mortgage? Here are three ways that your credit score could impact your mortgage application.

Your Credit Score Affects Your Ability To Get A Mortgage

The first thing your credit score tells a lender is whether they should lend to you at all. In some cases, if you have a very low credit score, you may not be able to obtain a mortgage at all.

Different lenders will have different criteria for determining safe and unsafe lending situations. Typically, if you have a score below the 600 mark, you’ll have trouble obtaining a mortgage.

If you’re worried about a low credit score, don’t despair – you can still get a mortgage, you just might have to work a little harder to get one. Some lenders will still lend to people with lower credit scores (just make sure you’re approaching legitimate lenders and not mortgage scam artists). Or, if time is on your side, you can work toward building up your credit score so that when it comes time to take out a mortgage, your score will be more appealing to lenders.

Your Credit Score Affects What Types Of Mortgages You Can Obtain

The second thing a lender learns from your credit score is which types of mortgages you qualify for. If a lender sees you as a higher risk, they won’t necessarily be willing to offer you just any old mortgage.

In most cases, if you have a credit score of less than 620, you won’t qualify for a conventional mortgage. In addition, if you have a lower credit score, you may have to make a larger down payment in order to qualify for the type of mortgage you want.

Your Credit Score Affects Your Interest Rate

The final thing that a lender learns from your credit score is what type of interest rate they’re willing to offer you. As a general rule, the higher your credit score, the lower the interest rate.

However, just because you have a high credit score, that doesn’t mean you’ll automatically get a great mortgage rate. There’s more that goes into the price of a mortgage than just the interest rate, so watch out for additional factors like extra fees, mortgage insurance, lock-in periods, and so on.

Your credit score tells a lender a lot about what type of borrower you are. Ultimately, a higher credit score means that you’ll be able to borrow money at a lower interest rate. But if your score is low, don’t worry – there’s a lot you can do to bring up that score before you apply for a mortgage, so don’t throw in the towel just yet!

Every financial situation is different, so if you want to find out more about how your credit score will affect your mortgage in your specific circumstance, talk to your mortgage professional.

Should I Shorten My Mortgage Term, Important Factors To Consider

When you first bought your home a few years ago, perhaps you started off with a 30 year mortgage. Now, you are considering refinancing and changing it to a 20 year or even a 15 year mortgage.

Shortening your mortgage term and refinancing can be a smart financial move, but before you make this decision there are a number of factors that you should consider.

Switching to a shorter mortgage will mean that your monthly payments will be higher, but you will be 100% paid off much sooner and you will save thousands of dollars in interest rates. Here are a few of the factors to consider before making this decision:

Has Your Situation Improved?

Perhaps you have moved to a higher paying position, allowing you to earn a higher income and pay off more of your mortgage every month? Or maybe you have received an inheritance, which will help you to make the payments? Perhaps your expenses have gone down and you will have more money left over from your wage?

Whatever the reason, if your financial situation has improved you might want to consider switching to a shorter mortgage. With your spare money, you will be able to make the larger payments and get your house paid off sooner.

Is The Improvement Long Term?

However, it is important to consider whether this improvement will last for the long term. Will your higher wage stay that way for the next several years? Are there any hidden expenses that you are failing to factor in?

You might be set up to repay larger monthly amounts on your mortgage at the moment, but you don’t want to set yourself up for failure in the future if your finances change.

What Are The Refinancing Costs?

Keep in mind that refinancing often comes with costs and fees, so make sure that you subtract these when you are making your calculations. It can sometimes take at least two or three years to recoup the fees, so make sure that you don’t plan on selling your home in the short term.

Can You Get A Better Rate?

One of the advantages of refinancing to a shorter mortgage is that you can sometimes get the opportunity to find a better rate. Perhaps if you have an adjustable rate you will be able to convert it to a fixed rate. Take a look at what is available and ask your financial advisor for help.

These are just a few important factors to consider when it comes to shortening your mortgage term. For more info about your home, contact your trusted mortgage professional.

Dodd-Frank’s Latest Gift: The Qualified Mortgage Rule

Dodd-Frank's Latest Gift: The Qualified Mortgage Rule The Dodd-Frank Wall Street Reform and Consumer Protection Act’s latest provision – the Qualified Mortgage rule – is going to effect on January 10, 2014.

While, like many of Dodd-Frank’s other features, its ability to protect customers remains to be seen, one of its impacts is already clear. Taking out a home loan just got harder.

The QM rule contains a set of provisions that, if followed, may protect lenders from lawsuits. They will also make it harder for customers to qualify to borrow money to buy a house.

Verifying Incomes

Lenders now have to follow stringent procedures to verify that borrowers can repay their loans. While many home loan lenders are already verifying and documenting borrower incomes, assets and debts, they will have to create additional paperwork to prove that they did their jobs.

DTI Caps

For a loan to be considered a qualifying mortgage, the borrower’s debt-to-income ratio can be no more than 43 percent. This means that if a borrower has $4,500 in gross monthly income, his total debt payments including his new mortgage cannot exceed $1,935 per month.

Previously, some lenders had been willing to go up to 45 percent.

Fee And Term Caps

Lenders will be less able to make creative loans, as well. Loans that meet the QM rule can be no longer than 30 years in length. They also cannot have closing costs and fees that exceed a cap of 3 percent of the loan’s balance.

Who Gets Impacted?

The good news is that the normal borrower taking out the normal loan might not notice the new QM rule. Borrowers that get squeezed are those that need to take out a loan that doesn’t fit the box laid out by the provisions. These include:

People in high-cost cities that need 40-year or interest-only mortgages to lower their payments.
Self-employed people and contractors that need to be able to borrow money on “stated” income without detailed verification.
Borrowers that can afford a loan but have other debts, like student loans.
Those that need non-traditional loans with high fees.

While the law still allow a lender to make a loan that isn’t a qualifying mortgage, given that the loan won’t have the same legal protections, its costs remain to be seen. This could end up pricing people with special needs out of the home loan market.

3 Considerations When Making A Down Payment

3 Considerations When Making A Down Payment One of the challenges you will face when deciding how much money to put down on your new home is whether to put down a larger down payment or to take a bit of money from your down payment and use it to pay “discount points” to lower your interest rate.

There are pros and cons to doing both and each borrower’s situation will be different so it’s important to understand which option is best for your individual need.

Some Factors You Should Consider Include:

Cost Of Borrowing - generally speaking, to lower your interest rate will mean you pay a premium. Most lenders will charge as much as one percent (one point) on the face amount of your loan to decrease your mortgage interest rate. Before you agree to pay discount points, you need to calculate the amount of money you are going to save monthly and then determine how many months it will take to recover your investment. Remember, discount points are normally tax deductible so it may be important to talk to your tax planner for guidance.

Larger Down Payment Means More Equity – keep in mind, the larger your down payment, the less money you have to borrow and the more equity you have in your new home. This is important for borrowers in a number of ways including lower monthly payments, potentially better loan terms and possibly not having to purchase mortgage insurance depending on how much equity you will have at the time of closing.

Qualifying For A Loan – borrowers who are facing challenges qualifying for a loan should weigh which option (discount points or larger down payment) is likely to help them qualify. In some instances, using a combination of down payment and lower rates will make the difference. Your mortgage professional can help you determine which is most beneficial to you.

There is no answer that is right for every borrower. All of the factors that impact your mortgage loan and your overall financial situation must be considered when you are preparing for your home mortgage loan.

Talking with your mortgage professional and where appropriate your tax professional will help you make the decision that is right for your specific situation.

Pitfalls And Warning Signs Of Making A Down Payment

Pitfalls And Warning Signs Of Making A Down Payment When you already have a home, you may be interested in determining if a refinance is a good option. You will not have to worry about restrictions on down payments or some of the problems that can occur with a down payment.

However, if you are considering purchasing a home in or the surrounding communities, understanding down payment restrictions is important.

Gifting Of A Down Payment

There are some programs that will allow you to use a gift for your home down payment. However, before you assume this, make sure you talk to your loan officer. Generally speaking, the lender will require the person making the gift to provide a letter stating the money was a gift and does not require repayment.

Windfalls Of A Down Payment

When people hit the lottery or come into money through an inheritance, one of the first things they may consider is buying a new home. However, it is important to keep in mind that lenders will typically want to know exactly how you came up with your down payment.

Borrowers still need to show a “trail” of how they came into money. If your down payment amount has not been “seasoned” the lender may not accept your loan.

What Is A Seasoned Down Payment?

Generally speaking, your loan officer will want a “paper trail” to document your down payment. Most lenders require down payment funds to be at a minimum six months old.

For example, let’s assume a borrower did win the lottery: If they deposit the funds into their checking account and leave it there for six months or more, the funds would be considered seasoned.

Lender restrictions on down payment funds are fairly common. If you are uncertain if your funds meet the lender’s criteria, talk to your loan officer. In most cases, a lender will require at least one-half your down payment fall into the category of seasoned funds.

Some borrowers may use their retirement account or other savings to make their home down payment.

Don’t wait until the last minute to discuss your down payment with your loan officer because you may wind up disappointed. Keep in mind, every lender has different requirements and these rules may not apply to your lender.

4 Tips To Save For That Down Payment

4 Tips To Save For That Down Payment In order to save up a huge amount of cash for the down payment on your first mortgage, you need a solid savings plan!

When you take out a mortgage on your new home as a first time homebuyer, the more you can pay as a down payment the better. The down payment on a mortgage reduces the principle of the loan and means that you will be paying tens of thousands less in interest payments over the life of the loan.

Most financial experts recommend that you should save up at least 20% of the value of the home as a down payment. Depending on the value of the home that you want to buy, this can be a serious chunk of money.

The conventional saving tricks of skipping your morning latte and eating dinner at home just aren’t going to cut it when saving up this much money! You will need some strategies for saving big.

Here are some tips to help you get closer to that down payment:

Make A Separate Savings Account

No matter how much you have already saved for your down payment, create a new savings account to put the money in. When the money is in your personal account it is so much more tempting to spend it on day to day expenses. Also, a savings account will give you a better rate of interest so that you can help you money grow.

Pay Off Your Credit Cards First

If you have credit card debt, you will be paying interest charges to the credit card company every month. These charges can really add up, especially if you are only paying the minimum on your loans. If you can pay down this debt you will have extra money every month to put into your savings instead.

Get A Part-Time Job

If you want to accelerate yourself towards having your down payment saved up, you could consider taking on a part-time job in addition to your full-time job on a few evenings and weekends.

It doesn’t have to be something that you do forever, but even sticking with it for six months to a year will give you thousands in extra income that you can put straight towards your down payment.

Make A Backwards Budget

Do you find that after you have paid all of your bills and your living expenses, there is nothing left over to save? Rather than calculating all of the money that you use on your monthly expenses and then saving whatever is left afterwards, why not make your budget the other way around?

Start off with how much you want to be able to save per month then subtract that amount from your net income. The number you have left is what you have to live off.

You will find that you naturally change your habits to make this amount of money work for you and if it if not enough you can increase your income by getting a side gig. These are just a few ways that you can save up for a down payment on your first home in order to save money over the years on your mortgage.

5 Great Questions To Ask At An Open House

5 Great Questions To Ask At An Open House An open house gives you a great opportunity to look more closely at real estate you might be interested in buying. It also affords you the chance to chat with the owner or real estate agent so you can bring up any issues or hesitations you have with the home.

Knowing what to ask can be difficult, so below are examples of questions to ask at the next open house you attend.

Why Has The Seller Decided To Sell Now?

If you ask why the seller is moving, you could learn valuable information to help determine your offer or possibly whether or not you want to buy the home.

Knowing whether the owners are about to go into foreclosure, have experienced trouble in the neighborhood, or if they’ve retired and completely paid off the home can help you understand how urgently they need to sell their property.

Has The Seller Had Any Other Offers?

Don’t forget that you are not only negotiating with the seller for a price, you are also competing with other potential buyers. It really helps to know what you are up against.

It is important to understand that you might not get a 100% straight answer to this question as most sellers know that competition or perceived competition can cause a potential buyer to move forward more quickly and at a higher price.

If you’re comfortable in this discussion, you might want to try and see if you can find out the details of any other offers.

Does The Property Have Special Ownership Costs?

Ask the agent or owner about the other costs associated with owning the property, such as Home Owners Association fees within a condo complex or a gated community. It’s important to know about these extra expenses in advance so you can make an informed offer.

You may also want to ask about any pending litigation concerning the property. Litigation is not always a deal killer, but it’s better to know the details before you sign closing documents.

What Furniture And Appliances Are Being Sold With The House?

Most of the time, a seller will include their major appliances such as the refrigerator, stove and dishwasher with the home, but this isn’t always the case. If you don’t already have these items, it’s important to know whether they are included in the purchase price.

Is There Anything Else That You Want To Leave With The Home?

This is an important question to ask. Especially if there are specific things in the home that you have a strong interest in. Perhaps there is custom art work or a pool table that fits perfectly in the game room.

The seller may be eager to part with those items and include them in the sale of the home or sell them at a large discount. The open house is a great opportunity to learn more about a home before making the decision to buy it, so be sure you ask the right questions.

Become a Fan the Arizona Mortgage Mark Taylor Team on Facebook

Follow Mark Taylor's Arizona Mortgage Team on Twitter

Check out Mark Taylor's Arizona Mortgage YouTube Video Channel

Check out Mark Taylor's Arizona Mortgage Blog for the latest mortgage news, updates and more

See how much Arizona Mortgage Klout Mark Taylor has

by Mark Tayloron | Arizona Mortgage | The Mark Taylor Teamon |

National Disclaimer:

AmeriFirst Financial, Inc., 1550 E. McKellips Road, Suite 117, Mesa, AZ 85203 (NMLS # 145368). 1-877-276-1974. Copyright 2014. All Rights Reserved. This is not an offer to enter into an agreement. Not all customers will qualify. Information, rates, and programs are subject to change without prior notice. All products are subject to credit and property approval. Not all products are available in all states or for all loan amounts. Other restrictions and limitations apply. License Information: Click Here for Licensing

Real Estate Websites & Realtors Websites & Realtor Websites by Char Bennett of YourSiteNeedsMe

Arizona Mortgage

Arizona Mortgage

Get Started

My Blog

Archive for the ‘Home Buyer Tips’ Category

Experiencing ‘Purchase Anxiety’? How to Calm Your Nerves Before Committing to Buy a New Home

Related Articles:

Five Absolute Truths About the Home Buying Process That You Will Need to Come to Terms With

Related Articles:

Buying a House or Condo? Why the Home Inspection Process is One You Won’t Want to Skimp On

Related Articles:

Three Ways That Your Credit Score Affects Your Mortgage (and Your Chance of Obtaining One!)

Related Articles:

Should I Shorten My Mortgage Term, Important Factors To Consider

Related Articles:

Dodd-Frank’s Latest Gift: The Qualified Mortgage Rule

Related Articles:

3 Considerations When Making A Down Payment

Related Articles:

Pitfalls And Warning Signs Of Making A Down Payment

Related Articles:

4 Tips To Save For That Down Payment

Related Articles:

5 Great Questions To Ask At An Open House

Related Articles: