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Record Low Interest Rates

If you’re thinking of buying a house, now is a great time to take advantage of the affordability that comes with low mortgage rates. This is especially great news for many buyers who were unable to purchase last year, or earlier this year due to the coronavirus pandemic.

With rates reaching all-time lows, it’s now less expensive to borrow money. According to Freddie Mac, mortgage interest rates are currently hovering near a five-decade low. As a result, buyers can afford 10% more home than they could a year ago, all while keeping the same monthly mortgage payment. Subsequently making homes more affordable over the lifetime of the loan. The impact your interest rate has on your monthly mortgage payment is significant. For example, an increase of just $250 in your monthly payment can add up to $3000 per year or $90,000 over the life of your loan.

Whether you’re thinking of buying or selling a home this year, there are advantages today that are rarely available. When you’re ready to learn more about how record low-interest rates can help you buy your dream home, call me for recommendations of mortgage experts to find the best home loan for you. 602-329-7782

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Advantages of Buying a Home

Buying a home is often referred to as the “American Dream.”  While there are many obvious benefits of owning a home, there are also some that are not so obvious.

1-Stable Monthly Payments

If you choose a fixed-rate mortgage, then your monthly payments will remain mostly the same, which is one of the best benefits of owning a home. When renting a property, there is always the unknown if the monthly payments will increase each year when you renew your lease. Consistent monthly payments that come with owning a home can provide some peace of mind when it comes to creating a monthly budget. Of course, monthly payments can change when owning a home if property taxes or homeowners insurance change, but the amount of change in property taxes is typically a very small amount.

2-Opportunity to Build Equity

The longer that you own a home, the more you pay towards the principle balance of your mortgage.  As the balance of the mortgage lowers, and hopefully the value of the property increases, the larger the equity!

3-Cheaper Than Renting Overtime

Undoubtedly, there are many associated when buying a home, such as the down payment, appraisal fee, and homeowners’ insurance.  The upfront cost to buy a home is substantially more than just paying monthly rent to a landlord. Yet, over time, owning a home is cheaper than renting which is a great benefit. In Arizona, if you compare a rental property and the monthly mortgage of a comparable home, the cost of ownership is typically much less.

4-Owning a Home Provides Tax Advantages

Paying taxes is a necessary evil, but a great benefit of owning a home is

the tax advantages that it provides.  Arguably the biggest tax advantage of owning a home is the option to deduct paid monthly interest from your tax returns. If you’re unsure how owning a home will impact your taxes, it’s recommended that you discuss it with your accountant so you fully understand how owning real estate will impact you come tax season.

5-Build Your Credit

There are many factors that impact a person’s credit score, one of the most important being the length of credit history.  Since the length of a mortgage is typically 15 or 30 years, having a mortgage on your credit history is a great way to lengthen the average of your credit accounts.  In addition to improving the average length of credit accounts, each and every month that a mortgage is paid on-time it shows that you’re a responsible borrower which not only can improve a credit score but also improves the chance of approval for future credit accounts.

Owning a home is much more than just having a place to live. Give me a call when you’re ready to become a homeowner! 602-329-7782

buying a home

Market Value Versus Assessed Value

phoenix home for saleThere are different valuations of a home’s worth and you should understand the difference between market value and assessed value. It’s important to understand what your home is worth. Knowing your homes value gives you an idea of how much you could receive if you sold the property.  It also plays a part in determining how much property tax you’ll be required to pay.

Market Value is used to determine how much a buyer would be willing to pay for your home. An appraiser, usually hired by your lender, determines market value. This value is a vital tool in helping to decide what price to list a property for. Sellers often want to list based on what they feel a buyer would want to pay. However, it is better to list a property based on current market conditions. Market value is based on recent sales of similar homes in the area, along with other factors.

Assessed Value puts market value in the context of property taxes and is based on the laws of the state or county in which you live. Assessed value is calculated as a percentage of the market value of the property. Assessed value is determined by an assessor’s office. Some offices have databases open to the public for you to see the history of your property, as well as what information what factored into its assessment.

Do you have more questions about your home’s value? Feel free to call me with your questions!  I’m always willing to answer any of your questions so that you can feel comfortable with the home buying or selling process! 602-329-7762

Get your free home value estimate here!

Mortgage 101

Home PricesBefore settling on a particular type of mortgage, it is important that you do your due diligence by getting to know the different types of mortgage and their individual advantages. Your lender will typically evaluate your particular needs and financial situation and advise you on what type of mortage is best suited for you.

What is a mortgage?

A mortgage is simply the conveyance or transfer of an interest in a particular fixed property with the intent of using the property as a security for the repayment of a loan. That being said, there are six types of mortgages as will be briefly discussed here.

1. Simple Mortgage

This type of mortgage involves the express or implied binding of the mortgagor/mortgager to the repayment of a loan. This means that the mortgagor has transferred the right of sale of his property to the mortgagee in the event of failing to repay. Although the mortgagee has the right to sell the property, he cannot until after getting a court decree permitting him to do so.

2. Mortgage by Conditional Sale

This type of mortgage refers to a situation where the mortgagor apparently sells the property based on certain conditions. The conditions for sale of the mortgaged property are:

 That on such a payment being made, then the sale cannot be valid, or

 That on default of the payment on the agreed date, the sale becomes absolute, or

 That on such payment being made the person who buys the property shall transfer the property to the seller.

3. English Mortgage

There are three major features of this type of mortgage, which are:

 The mortgagor makes a personal promise to repay the loan on a specific date.

 There is an absolute transference of the mortgaged property to the mortgagee. This also gives the mortgagee the right to sell the property without a court decree.

 The mortgaged property can only be re-transferred when the mortgagor has completely repaid the money on the agreed date.

4. Mortgage based on usufruct

Also called usufructuary mortgage, this type of mortgage is based on usufruct, which is a legal right that allows a person to receive profits from a property owned by someone else. Usufructuary mortgage compels the mortgager to deliver the property as well as giving the mortgage the following rights:

 The right to hold on to the property until repayment is done.

 The right to get part, or the total rent profit from the property.

 The right to receive the rent profits in the place of the interest or the loan or the both.

 The right to incur any liabilities during the course of ownership

5. Mortgage by deposit of title deeds

Sometimes referred to as “equitable mortgage,” this type of mortgage is common with banks as it does not require any registration. It simply involves the transfer of property title deeds by the mortgagor to the mortgagee as a form of security for a loan.

6. Anomalous mortgage

This refers to any mortgage which does not conform to the definition of any of the other types of mortgage. Example of anomalous mortgage is the kind which results from the combination of two or more types of the other mortgage types.

If you are looking to buy a home, I can recommended an experienced trusted lender who will work diligently to help you find a mortgage that meets your needs.

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What is a Leasehold Mortgage?

When you’re buying or selling a home, it’s important to understand the different types of mortgages you may encounter. They aren’t all the same, and they can get a little difficult to understand if you don’t do a little prior research or consult with a lender. This is usually a type of mortgage that affects commercial properties, but this isn’t always the case. Learn what a leasehold mortgage is in the event you come across this term during your buying or selling experience.

The Basics:  Whether you’re buying land or buying a building, when you take out a mortgage to make your purchase, part of the collateral for the mortgage becomes the property you’re purchasing. This is true no matter what you’re buying, and it’s the reason why a bank or lender can repossess a home that hasn’t had its mortgage paid in a long time.

However, if you’re leasing a property or a piece of land, such as in the event of an office or a business that’s located in a commercial site available for lease instead of for purchase, you yourself don’t own the property. This means that the property can’t be used as collateral against your loan.

With a leasehold mortgage in place, the buildings on the property can be used as collateral even if the land itself can’t be.

Additional Possibilities:  If the owner of the property you’re leasing from agrees to subordinate the fee for the leasehold mortgage, this means the lender’s claims will take priority over the owner’s. So if you, as someone leasing the property, end up owing both the owner and the lender money for the property, the lender will be able to take precedence over the owner of the property to gain back any losses.

Otherwise, the owner of the property will take precedence in terms of the ability to reclaim any losses incurred.

Why Choose One?  There are several situations where this type of mortgage may be appropriate, but a leasehold mortgage will most likely be used when development or construction needs to take place on a property. This means that the person interested in developing a piece of land may lease that land and complete construction on it as part of the mortgage requirements.

From there, if payments are not made, the construction or completed buildings can be repossessed by the owner of the land or by the lender, depending on the situation.

Interest rates are still low and there are many loan options to chose from.  Contact me to get started!