Sunday, August 6, 2023 / by Steve Ticknor
In this blog, we've discussed FHA loans and conventional loans. We've also talked about adjustable-rate loans. So it made sense for us to tell you about the pros and cons of a fixed-rate mortgage as well.
Fixed-Rate Mortgage Pros and Cons
What is a Fixed-Rate Mortgage?
The best place to start is probably to explain what exactly a fixed-rate mortgage entails. Well, as the name implies, the mortgage rate remains the same throughout the entire life of the loan. If you paid any kind of attention to the real estate market over the past few years, you saw mortgage rates go up and come down and then go back up again. In November 1981, mortgage rates for 30-year fixed-rate loans hit their apex at 18.39% over the last 50+ years. After the bubble burst in 2008, rates began to plummet. By the end of 2020, they hit their lowest point of 2.67%. Currently, we see them settling in at just under 7%, according to Freddie Mac. Someone who locked in their rate at 2.67 in December 2020 pays a lot less Z ...
Sunday, June 18, 2023 / by Steve Ticknor
Unless you pay all cash for a Lake Havasu home purchase, you probably need to contend with a lender. They may offer you the option of a conventional loan, a government-backed loan, or a VA loan. While conventional loans are the most common, many buyers opt for a government-backed loan. However, unless you are a military veteran or active member, a VA loan is off the table. That leaves FHA and USDA loans. Most Havasu home buyers utilize an FHA loan. What exactly do you know about it and how it works?
FHA Loan Explained
What is an FHA Loan?
This type of loan is backed by the Federal Housing Administration (FHA). However, that does not mean that they actually issue any money or approve a mortgage loan. Instead, they insure the loan. This helps buyers with a lower credit score obtain approval for mortgages that they would not receive with a traditional private lender.
In order to qualify for this type of loan, you must have at least a 500 credit score. But jZ ...
Thursday, October 27, 2022 / by Steve Ticknor
For the past few years, interest rates hit historical lows. Unfortunately, that is no longer case. We keep seeing rates go up, up, and UP! With the lower rates, financial experts suggested that a fixed-rate mortgage was the better option for home buyers. However, that may no longer be the case. How do you know whether to choose a fixed-rate (FRM) or an adjustable-rate mortgage (ARM) when it comes to your home loan options?
Adjustable-Rate Mortgage for the Home Buyer
How Does an ARM Work?
Unlike fixed-rate mortgage loans, the interest rate on an adjustable-rate mortgage fluctuates over time. Initially, it starts out lower than a fixed-rate mortgage. For example, Freddie Mac shows the average 30-year FRM at 7.08% as of the writing of this post. However, they show the ARM at 5.96%. On a $400,000 mortgage, that means a difference of almost $300 a month ($3600 in the first year). But this will not always be the case. The rate may go up or down.
For a set period of time (usually the fi. ...
Thursday, December 16, 2021 / by Steve Ticknor
In the past, homebuyers could visit a lender, answer a few questions, and get a rough idea about what they would qualify for in a home loan. That was enough to start their home search. However, nowadays, buyers need to include a pre-approval letter with their offer. And in a seller's market like Lake Havasu's, you may only have a few days to find a property and put in an offer before someone else snatches it up. Therefore, we at the Sunstone Real Estate Group highly recommend that you make an appointment with your lender before you start looking for your new Havasu home.
Why Loan Pre-Approval is Important to Your Havasu Home Search
Pre-Qualification vs Pre-Approval
It might help you understand why pre-approval is preferred over pre-qualification if you know the difference between the two. Pre-qualification takes just a few minutes. The lender asks you about your income, employment, and if you have any assets among other things. Then, they may perform a "soft credit check" to see . ...