Why is Your Credit Score So Important When Applying for a Mortgage? When a lender is determining your mortgage rate, they typically look at your credit history and score to learn more about your financial past. The better you’ve been at handling those financial obligations, the higher your credit score. The higher your score, the lower your interest rate will be. In the lender’s eyes, they believe you’ll be less likely to default on your mortgage when you have a higher credit score. High credit scores indicate that an individual is sound financially and has proven that they are able to meet their financial obligations. Consequently, they have a greater chance of getting a competitive interest rate and lower monthly mortgage payments as a result of their past credit history. Over the term of the loan, this can save you a significant amount of money. However, there are loan programs for individuals with less than perfect credit scores. There are several things you can do to improve your credit score. For instance, you can look for errors on your credit report, ensure that your bills are paid on time, and reduce any of your credit card debt to below 30% of your credit limit. Furthermore, don’t apply for any new credit and don’t close any of your credit card accounts. https://www.google.com/maps?cid=6744959272592205627 Learn morefrom https://local.google.com/place?id=6744959272592205627&use=posts&lpsid=4997268177960261766
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How do Qualified Mortgage Loans differ from Non-Qualified ones in Phoenix? If you’re looking for a home loan but aren’t sure where you should start, you’ll probably hear the terms “qualified mortgage loans” and non-qualified mortgage loans.” So what exactly is the difference between these two types of loans? Here is a quick explanation: Qualified mortgage loans provide lenders with certain legal protections once they can show that you’re financially able to repay your loan. There are stricter guidelines for these types of mortgage loans that were put in place to protect homebuyers and reduce the risk of default. Under their guidelines, interest-only payments or balloon payments aren’t allowed. In addition to the limits placed on upfront fees and points, the guidelines establish how much of the buyer’s income can go towards their mortgage debt. Non-qualified mortgage loans are loans that don’t meet the criteria of qualified loans. These are non-traditional loans that are ideal for home buyers whose income fluctuates, is paid in a lump sum, or who are self-employed as independent: from https://local.google.com/place?id=6744959272592205627&use=posts&lpsid=4111235317426583369 Using 401(k) Funds to make a Down Payment on a Home in Phoenix Yes, you can use your 401(k) funds to make a down payment on a home. After all, it is your money and you can spend it as you see fit. Although it doesn’t work the same way as a standard deposit account, you have every right to access those funds if you decide to do so. For many individuals, their 401(k) is their largest type of financial account. So it can be very tempting to use those funds for making a down payment on a home loan. Just be aware that there are certain drawbacks to doing this such as penalties, potential repayment requirements, and taxes. The 401(k) was originally designed for retirement purposes and was meant to last into your “golden years.” Consequently, you shouldn’t just dip into it whenever you feel like it. Up until you reach 59½ years of age (55 if you aren’t working anymore), you’ll be charged a 10% penalty for early withdrawals on any of the funds you take out. Plus, you’ll be taxed on those funds as well. Typically, if a person decides to use these funds for making a down payment on a home, it’s because they’re first-time buyers who don’t have the assets or savings for a down payment. https://www.google.com/maps?cid=6744959272592205627 Learn morefrom https://local.google.com/place?id=6744959272592205627&use=posts&lpsid=3527361156444533653 How Many VA Loans Are You Allowed to Have at One Time in Phoenix? The simplest answer to the above question is “as many as you want.” When lenders look at the limits on conforming loans in your particular county and your entitlement, they can assist you with a VA loan to purchase a home. Depending on the situation, you can even have 2 VA loans at the same time. However, you need to understand a few things about lenders and entitlement when you want to take out another home loan. As was mentioned above, you can have as many of these loans as you desire provided the lender will approve multiple home loans. But, you may be required to make a down payment if there’s no entitlement remaining. This means the Federal Government won’t back or guarantee your second loan and you’ll be required to come up with a portion of it yourself. However, you are allowed to take advantage of all US Government entitlements that are provided in order to obtain an additional VA loan. Rather than worry about this and those other closing costs, those entitlements can go towards covering your VA funding fee. Keep this in mind whenever you’re considering approaching your lender for an additional VA home loan. https://www.google.com/maps?cid=6744959272592205627 Learn morefrom https://local.google.com/place?id=6744959272592205627&use=posts&lpsid=CIHM0ogKEICAgICOm4_8nwE What is VA Loan Entitlement in Phoenix? VA loan entitlement is the amount of a home loan that will be guaranteed by the Department of Veterans Affairs. Simply stated, the lender expects the VA to repay a portion of the loan if the borrower defaults on it. That amount is the FREE funding or entitlement for your sacrifice while serving in the US military. There are 3 types of entitlement as follows: Full Entitlement – with your first home loan, the VA will provide a full entitlement so you can purchase a home without having to make a down payment. Every veteran applies for entitlement with lower mortgages. However, for homes over $144,000, the full entitlement is 25% of the loan total. Basic Entitlement – your COE or Certificate of Eligibility explains that you’re eligible for the basic entitlement of $36,000 on homes priced below $144,000. If you want to buy a more expensive home, the VA will increase it to full entitlement. 2nd Tier Entitlement – with your first VA loan, your full or basic entitlement is used to purchase a home. However, if you’ve already used the current entitlement, a new financial backing will be put into place. You can calculate what the VA will cover by taking 25% of your county’s VA home loan limit. https://www.google.com/maps?cid=6744959272592205627 Learn morefrom https://local.google.com/place?id=6744959272592205627&use=posts&lpsid=1647127064516249434 2022 VA Loan Limits in Phoenix One of the major benefits of being a member of the US military is that there is no down payment required on VA home loans. Plus, veteran home buyers have been awarded additional buying power for 2022. This past March, the median price of a US home reached $405,000. According to Realtor.com this equates to a 26.5% increase over the past 2 years. In order to compensate home buyers for increasing home prices, the FHFA (the Federal Housing Financing Agency) recently announced that they were going to increase the limit on conforming loans backed by the VA (Department of Veterans Affairs). This was nearly a $100,000 increase as the former limit of $548,250 in 2021 was increased to a whopping $647,200 as of March of this year. According to the national lender Mortgage Bank of California’s managing director, Mayer Dallal, “while the $647,200 limit applies to most counties in the US, it can reach up to $1million for some of the higher cost areas.” This is a significant increase from the former limit see above. Interestingly enough, some armed forces members aren’t subject to any VA home loan limits. Keep in mind that these loan limits are mandated by the VA and are the loan amounts that they guarantee, not the limit on the amount a person can borrow. https://www.google.com/maps?cid=6744959272592205627 Learn morefrom https://local.google.com/place?id=6744959272592205627&use=posts&lpsid=39201805315858293 What Documents Are Required When Refinancing Your Mortgage in Phoenix? When you apply for a refinancing loan, your lender will ask you to provide several different documents. These documents will enable them to verify your assets, your income, and your financial history. To ensure a smoother refinancing process, have the following documents ready in advance, namely your 2 most recent: ● bank statements Furthermore, if anyone else such as your spouse or partner is applying for a refinance loan with you, the lender will need to see their documentation. If you’re self-employed, the lender may require additional documentation to prove that the amount of income you’ve listed is factual. You can prepare for this by having the most current copy of your business income tax return available for the lender. In most cases, you will need to provide bank and investment account statements and current profit and loss statements as well as your two most recent income tax returns. You should be in reasonably decent shape if you’ve been self-employed long enough so that your earnings are relatively consistent. Remember, the lender will want your business tax returns as well as your personal income tax returns. https://www.google.com/maps?cid=6744959272592205627 Learn morefrom https://local.google.com/place?id=6744959272592205627&use=posts&lpsid=6506260744434492520 What Documents Are Required When Refinancing Your Mortgage in Phoenix? When you apply for a refinancing loan, your lender will ask you to provide several different documents. These documents will enable them to verify your assets, your income, and your financial history. To ensure a smoother refinancing process, have the following documents ready in advance, namely your 2 most recent: ● bank statements Furthermore, if anyone else such as your spouse or partner is applying for a refinance loan with you, the lender will need to see their documentation. If you’re self-employed, the lender may require additional documentation to prove that the amount of income you’ve listed is factual. You can prepare for this by having the most current copy of your business income tax return available for the lender. In most cases, you will need to provide bank and investment account statements and current profit and loss statements as well as your two most recent income tax returns. You should be in reasonably decent shape if you’ve been self-employed long enough so that your earnings are relatively consistent. Remember, the lender will want your business tax returns as well as your personal income tax returns. https://www.google.com/maps?cid=6744959272592205627 Learn morefrom https://local.google.com/place?id=6744959272592205627&use=posts&lpsid=1998307209329077685 3 Ways to Shorten the Refinance Process in Phoenix Before you apply for refinancing, you should know what you want to accomplish by doing this. Do you change your terms, convert your equity to cash, or lower the interest rate on your current mortgage? Although the process can be time-consuming, there are 3 ways you can shorten it as follows: First and foremost, make sure you qualify – some of the factors that lenders take into consideration are your credit score, your DTI (debt-to-income) ratio, and your home equity. Remember, refinancing means paying closing costs again which could detract from any financial benefit you gain. Have your documents prepared ahead of time – some of the documents the lender will want include 2 of the most recent bank accounts statements, 2 of your most recent pay stubs, 2 of your most recent tax returns, and 2 of your most recent W-2’s or 1099’s. If there is anyone else applying with you, such as your partner or spouse, the lender will need their documentation as well. Prepare for your home appraisal – lenders will normally require an appraisal of your property when refinancing your mortgage. Just like the appraisal that was done when you purchased your home, the refinance appraisal will tell the lender that they won’t be loaning more money out than what your home is actually worth. from https://local.google.com/place?id=6744959272592205627&use=posts&lpsid=2148371919493007883 3 Reasons to Consider Refinancing Your Mortgage in 2022 in Phoenix The interest rate, monthly payments, and term length of your mortgage may change when you refinance. The funds you receive will pay off your current mortgage once it closes and you’ll start making payments on the new loan. There are 3 reasons you should consider refinancing in 2022: Change your interest rate or the terms of the loan – if you’re having difficulties making your monthly mortgage payments or the current interest rate is lower than what you’re paying, consider a “Rate-and-Term” refinance. Your principal balance will remain the same but your monthly payments will drop due to the lower rate. Do a “cash-out” refinance – this is basically refinancing by borrowing against your home’s equity. Although this will cause the principal to increase, you’ll take the remainder out in cash that can be used for just about anything from eliminating credit card debt to making repairs. Switch the type of financing – you can switch from one type of loan to a different one. For example, if your ARM (adjustable rate mortgage) is approaching the adjustment stage, and the interest rate is lower than what you’re currently paying, you can switch to a fixed-rate mortgage to save money so your monthly payment is more consistent. https://www.google.com/maps?cid=6744959272592205627 Learn morefrom https://local.google.com/place?id=6744959272592205627&use=posts&lpsid=1024087047341451150 |
About UsDesert Springs Mortgage, LLC is a mortgage lending company in Phoenix that is dedicated to making the mortgage borrowing process easier for anyone looking for ways to finance the purchase of a new home. We have a team of experienced loan originators and processors that will guide you through the whole application process from start to finish. They will also give you advice on what loan products best suits your situation and ambitions. Aside from that, we also help with loan refinancing where we can adjust the terms of your loan to suit current market conditions. For more information, give us a call today on (623) 432-1309. ArchivesNo Archives Categories |