Scottsdale mortgage
Maximizing Your Buying Potential in Scottsdale
If
you've been following the real estate market at all, you've noticed
that home sales have significantly slowed down. For buyers that are
interested in a home in Scottsdale, this is definitely good news.
Scottsdale has some very luxurious homes, and the reduced prices offer
buyers great housing options.
Scottsdale mortgage
But even
with lower prices and less competition among buyers, financing a
Scottsdale home can be a bit of a challenge. Many buyers find the option
of a traditional fixed rate mortgage (one that requires 20% down
payment) a bit of a challenge.
Scottsdale mortgage
One of
the lending options that make it easier for buyers is a hybrid loan. A
hybrid loan has more relaxed lending standards than most traditional
mortgage options. Within the hybrid loan heading, there are several loan
options:
Piggy-back Loans
With a most lending programs,
the buyer either puts down 20% of the loan value, or if they opt for a
lower down payment, pay a private mortgage insurance (referred to as
PMI) as insurance against a default on the loan. With a piggy back loan,
you can purchase a Scottsdale home with a small down payment and no
private mortgage insurance.
With a piggy back loan, you take two
loans on the home. A first loan that covers 80% of the home value, and a
second mortgage that covers the rest of the loan value (usually for 5%
to 15% of the loan value).
Convertible ARMs
Many home
owners were taking out adjustable rate mortgages (ARM) a couple of years
ago when interest rates were extremely low. Nowadays, some buyers are
anxious about taking an ARM because of concerns about increasing
interest rates. But a convertible ARM allows you to convert your
mortgage from an adjustable rate to a fixed rate if the interest rates
begin to climb.
With the convertible loan, you can find the ideal
Scottsdale home and take a loan at an all time low rate. Then later,
after you've built equity in the home, you can refinance if necessary
and base your loan on your equity.
Homes in Scottsdale are a
great value. Scottsdale is one of the many communities in the Phoenix
area that traditionally maintains its real estate value and continues to
appreciate. With the right mortgage option, buyers can get into homes
that would have typically been a stretch, and enjoy the long term
financial benefits of investment in Scottsdale real estate.