Home prices increased substantially throughout Arizona. The market began to attract out-of-state and some in-state investors who viewed the strong business environment and phenomenal population growth as a driving force for profits. And what better way to make a profit than to buy a run-down home, make a few improvements, and sell for a substantial increase in price.
This process of buying and selling quickly has been referred to as flipping property, because the home changes hands so quickly. Flipping has received a great deal of national press in the last couple of years, and is the preferred method for many late-night infomercial sales people.
Unfortunately, these real estate investors are tapping into the housing market that traditionally was the domain of the first-time buyer. Many first-time buyers look for homes in need of cosmetic repairs or even major renovations because they tend to be either undervalued or lower in price than comparable properties. What better way to begin building saving than to put in a little sweat equity to bring the home up to par?
While the early market frenzy did bring a lot of investors into the real estate market last year, this year trends show sales and appreciation are slowing. That means there is more opportunity for home buyers, especially those first-time buyers that are looking for less expensive properties.
Another important consideration is the increasing rate of real estate foreclosures. According to the latest statistics, home foreclosures are up by 9% this year. When these properties become available, it is another source of lower priced real estate.
As the real estate appreciation rates begin to level off throughout Arizona, fewer home owners will invest money in upgrading their homes for a quick sale. There will be more belt tightening among consumers, and that will eventually account for more homes on the market in less than pristine condition.
If you are the type of buyer that is willing to invest your time and energy in a property, as well as your money, you will find that there are still some great deals available for first-time buyers.
Arizona still has great real estate potential and there is no better time for first-time buyers to dive into the market. Do not be put off by flippers, with time and care, you can build a home you enjoy and wealth for your future.
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.
Both Jeffrey Nelson & John Wesley are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Jeffrey Nelson has sinced written about articles on various topics from Debts Loans, Marketing and Real Estate. to get a free copy of Jeff Nelson's, "7 Tips Every Home Buyer Should Know," a 10-page report that describes what a home buyer should know before m. Jeffrey Nelson's top article generates over 33100 views. to your Favourites.
John Wesley has sinced written about articles on various topics from Real Estate, Buying and Selling Home and Family. For more free information about buying, selling, and investing in the greater Phoenix real estate market, visit . You'll also find a di. John Wesley's top article generates over 9900 views. to your Favourites.