By: John Wesley

Unless you are one of the lucky few who has enough cash to pay for a house in full, you will have to research Phoenix, Arizona home mortgages before you can call that home your own. But, where do you begin your search?

And, how do you know what type of mortgage is right for your particular circumstances? Here are some tried and true hints on how to obtain the best Phoenix, Arizona home mortgages.

1. Check Your Credit

Once you have decided that you are ready to enter the real estate market, it is prudent to check your credit before you contact any Phoenix, Arizona home mortgages lender. There are many services that will, for a small fee, provide you with your credit score (also called a FICO score).

As well, by writing the individual credit agencies, you can obtain your detailed reports that will show all credit accounts that you have and any problems that require fixing. The higher your FICO score, the lower your mortgage interest rate will be, so it well worth your time to have your credit in order before you start working with lenders.

2. Research More Than One Lender

It pays to investigate several different types of mortgage lenders before you decide to work with one in particular. Keep in mind that there are more options than just the local bank. Consider contacting credit unions, mortgage brokers, direct lenders, and wholesale lenders. Don’t be afraid to ask them about their process, fees, and turn-around time. You might just be surprised that services can vary dramatically and that fees can be different with each lender. By choosing the right lender, you can literally save yourself thousands of dollars on Phoenix, Arizona home mortgages.

3.Prequalify For Your Mortgage

Once you feel comfortable working with a particular mortgage lender, ask to be prequalifed for a loan. You will be asked to supply income, investment, and tax information. Based upon your debt-to-income ratio, the lender will determine how much you can afford to pay for a mortgage each month. This will reveal how much home you can afford to buy. Once you know how much loan you can qualify for, you can begin shopping for homes in that price range.

4. Choose The Right Type Of Mortgage For You

Fortunately for homebuyers, there is more than just one type of mortgage. And, by looking at your particular circumstances, you will be able to determine which type is right for you. For example, adjustable rate mortgages have a set period of time where the interest rate is fixed. This is commonly three or five years.

After this time, the rate becomes variable depending on the market, and your rate will most likely go up. These types of Phoenix, Arizona home mortgages could be smart choices for those who only plan to stay in their homes for a short period of time. However, those who plan to live in their homes indefinitely would be better off with fixed rate loans. With a fixed rate loan, you will have a set interest rate for the duration of the loan, unless you choose to refinance during the loan period. There are many types of loan programs available to homebuyers, and they are worth exploring before you make a decision.

5. Avoid the Private Mortgage Insurance If You Can

Private Mortgage Insurance (PMI) is extra insurance that the homebuyer pays when they have obtained a mortgage that is more than 80 percent of the home’s purchase price. Thus, if you haven’t paid 20 percent down on the house, you will probably be required to pay PMI. If you have the funds to contribute to a down payment, by all means, do so, and you will save yourself a considerable amount of money over time.

Keep in mind that once you have gained equity in your house, the PMI can be reviewed. If you have over 20 percent equity, the mortgage lender will be required to stop charging you for the insurance.

 

About the Author:

For more free information about buying, selling, and investing in the greater Phoenix real estate market, visit Phoenix Real Estate Talk!. You’ll also find a discussion forum and free e-mail mini-courses. (http://www.phoenixrealestatetalk.com/)