Do you have questions? We can help! You will find the answers to several frequently asked mortgage questions below.
A 3-2-1 Buydown is a financing method that temporarily reduces the interest rate on a mortgage for the first three years of the loan. This option is often used when interest rates are high and is similar to using discount points. However, the reduced rate is temporary and an upfront cost, called a buydown fee, is required at closing.
With a 3, 2, 1 Buydown Option, The interest rate is lowered by 3% in the first year, 2% in the second year, and 1% in the third year. After the third year, the full interest rate applies for the remaining term of the mortgage.
For example, on a 30-year, fixed-rate mortgage at 4% interest for $400,000, the monthly payment would be $2,580. With a 3-2-1 buydown, the monthly payments would be:
A 3-2-1 buydown may be a good option for you if you are looking for a temporary reduction in your mortgage interest rate and the seller is willing and able to pay the buydown fee at closing. It's also a good option if you plan to live in the home for only a few years, as the interest rate will be at its lowest in the first few years of the loan.
Additionally, if you are looking to purchase a home when interest rates are high, a 3-2-1 buydown can provide a temporary reduction in the interest rate that may make the loan more affordable. However, it's important to keep in mind that after the third year, the interest rate will increase to the original rate. It's also important to consult with a lender or a financial advisor to determine if a 3-2-1 buydown is the best option for you based on your financial situation and goals.
Yes, it is possible to use a reverse mortgage, also known as a Home Equity Conversion Mortgage (HECM), to purchase a home. The program is called a HECM for Purchase and it allows seniors to buy a new home and obtain a reverse mortgage in one transaction.
The HECM for Purchase program is designed to help seniors who want to downsize, move closer to family, or live in a different area. With this program, a senior can purchase a home and use a reverse mortgage to pay for part or all of the purchase price. The senior must be at least 62 years old and have enough income to pay for property taxes, insurance, and home maintenance.
The HECM for Purchase program can be a good option for seniors who have a lot of equity in their current home but do not want to sell it. They can use the proceeds from the reverse mortgage to purchase a new home and keep the old home as a rental property or for other use. However, it's important to keep in mind that a HECM for Purchase may be more expensive than a traditional mortgage, and that obtaining a reverse mortgage is a big financial decision that should be carefully considered and discussed with a financial advisor.
A VA IRRRL stands for Veterans Affairs Interest Rate Reduction Refinancing Loan. It is a type of loan that is available to veterans and active-duty military members who have an existing VA home loan. The purpose of the VA IRRRL is to help veterans and active-duty military members lower their interest rate and monthly mortgage payment, or change the terms of their loan, such as switching from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage.
The VA IRRRL program is also known as the VA Streamline Refinance program, because it is a streamlined process that typically requires less documentation and credit underwriting than a traditional refinance loan. To be eligible for a VA IRRRL, the borrower must have a valid VA loan, and the property must be their primary residence.
The VA IRRRL can be a great option for Veterans and active-duty military members who have a current VA loan and want to lower their interest rate or monthly mortgage payment, also it can be a good option for those who want to switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage, but you should consult with a lender or a financial advisor to determine if the VA IRRRL is the best option for your specific situation.
The Jumbo loan limit in Arizona is determined by the Federal Housing Finance Agency (FHFA) and it changes every year. As of 2023, the Jumbo loan limit for Arizona is 726,200 for a single-family home. This means that if you want to take out a mortgage for an amount that is higher than $726,200, you would need to apply for a Jumbo loan.
It's important to note that the Jumbo loan limit is not the same across the country, it varies depending on the area, and it could be higher or lower than the limit mentioned above. Additionally, Jumbo loans typically have stricter lending requirements and a higher interest rate compared to conforming loans (loans that fall within the limit set by the FHFA)
It is important to consult with a lender to understand the requirements and interest rate of a Jumbo loan, also you can use a mortgage calculator to estimate your monthly payments and compare your options.
Did you know that home buyers in Arizona can purchase a property with little to no money down through a USDA loan? This government loan program, often overlooked compared to FHA and VA loans, is a great option for those looking to buy in rural areas of the state. USDA loans are designed to assist low to moderate income earners, first-time home buyers, those with past credit issues and recent college graduates and newly formed households in achieving homeownership in Arizona's rural communities.
A reverse mortgage can be a helpful option for homeowners in retirement. These are the top three reasons why seniors consider reverser mortgages in Arizona.
1. Additional income during retirement: A reverse mortgage can provide homeowners with additional income to supplement their Social Security or other retirement income.
2. Covering medical expenses: The funds from a reverse mortgage can be used to pay for medical expenses that may not be covered by insurance.
3. Making home improvements: Reverse mortgage funds can also be used to make home improvements, such as updating a bathroom or kitchen, adding a wheelchair ramp, or making other modifications to make the home more accessible.