Susan Deierling, Assoc. Broker
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Realty Executives Northern Arizona
Tag Archives: Home Financing
Buying Sedona real estate doesn’t just give you a place to live; it can also be a very smart financial move.
This is because owning a home can be like having a forced savings account, which you are committed to for the long term.
Consistent Saving On Autopilot
Sometimes saving money on our own each month is difficult. It takes a lot of discipline to maintain a consistent savings plan.
However, paying your mortgage every month means that you are paying down the principal and working toward eventually owning the property outright.
In the early years of the mortgage, the payments will go primarily to the interest on the loan.
But over time, the portion of your payment dedicated to principle increases, which accelerates paying off the entire mortgage.
Make Yourself Wealthy Instead Of Your Landlord
In the long term, owning your own home may be a much better financial arrangement than renting a home. No matter how long you pay monthly rent, you will never own the real estate that you are living in.
When you are renting your home, it may also be possible for your landlord to increase your rent every year.
On the other hand, paying a mortgage on your real estate means that every month you get closer to owning the home.
In fact, most home mortgage lenders offer a fixed interest rate mortgage. This gives you a sense of control over how much you are paying every month, year to year.
In a fixed rate mortgage, every mortgage payment pays down a portion of the principle on your mortgage loan. In many cases this builds equity in your property and increases your net worth.
It’s a good idea to check with a professional mortgage lender to get an idea of the most up-to-date programs available.
Real Estate May Increase In Value Over Time
Over the years, your home might appreciate in value. Many experts say that the average home value increase each year over longer stretches of time, although this will vary according to the area you live in, the current economy and other factors.
Your home’s value may very well fluctuate throughout the years, but history has shown that over the long term, buying a home can be a very beneficial financial decision.
Understanding the benefits of home ownership, including the potential financial upside of purchasing your own home, can be an excellent way to further your overall personal financial plan.
If you lost your Sedona home due to foreclosure, you probably haven’t given up on the dream of owning a new home. The good news is that a number of guidelines have changed which may allow you an opportunity to buy that new home sooner than you think.
There are a few guidelines that lenders follow to determine when you’ll qualify for financing after foreclosure. Arming yourself with this information may help you qualify again for a mortgage.
Foreclosure With Extenuating Circumstances
Generally, lenders will take into consideration any extenuating circumstances surrounding the foreclosure on your Arizona real estate.
Was there a death or illness that prevented you from earning money to pay your mortgage? Did you have a job transfer that came with a steep pay cut? Were you severely injured and temporarily disabled as a result?
You can add a memo that explains any lapses in credit worthiness to potential lenders. This report can be as long or as short as needed.
Many lenders will shorten the waiting period for documented extenuating circumstances. Traditionally the waiting period after a foreclosure is seven years. However, these waiting period guidelines may change and you would be best served by getting up to date information from a qualified mortgage professional.
Deed-in-Lieu of Foreclosure and Short Sale
You may be wondering what the waiting period for financing is if you have exercised a deed-in-lieu of foreclosure or successfully negotiated a short sale. Fortunately many lenders offer options if you were able to avoid an actual foreclosure.
Traditionally the waiting period for a deed-in-lieu of foreclosure can be four to seven years. If there were special circumstances surrounding the deal, you might be able to qualify in as little as two years. The lender may have certain down payment or credit score requirements as a condition of approval.
Getting financing after a short sale generally has the shortest waiting time before qualifying for a new home loan. Generally the lender will only require a two-year waiting period before they’ll approve financing. Once again, a call to a licensed mortgage professional will give you the most up-to-date information.
The good news about financing after foreclosure is that it is possible. Your dreams of owning a home can be fulfilled even if you have experienced a foreclosure in your past.