Avoid 4 Mistakes While Taking Your First Home Mortgage

4 Mistakes to Avoid While Taking Your First Home Mortgage

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First time home buyers face a lot of challenges that include, getting approved for a mortgage, finding a good agent, searching for the perfect home and - most importantly - staying within a budget. These challenges lead to potential buyers committing a few mistakes. Some of the most common ones are as follows: http://www.awmlending.com/mortgage-purchase.php

3 Steps to Obtain a Mortgage

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Getting pre-approved is necessary for making sellers seriously consider your offer. When it comes to shopping for mortgage, no method is right or wrong and every lender has some pros and cons. However, it is imperative that you plan in advance and shop carefully in order to obtain the best deal that suits your financial needs.

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Types of Mortgage Loans for Potential Homeowners

When it comes to buying a house, taking a mortgage is inevitable for most homebuyers. Earlier from 2000 to late 2008, during the boom of real estate industry, buyers had exotic loan options to choose from as lenders were offering great loans at risky terms. However since then, lenders have returned to the safe environment of home financing.

Nowadays, there are majorly two types of mortgage loans that conventional buyers can choose from. They are as follows:

1.    Fixed Rate Mortgage: As the name suggests, with a fixed rate mortgage, your rate of interest on the loan remains fixed throughout the term of your loan and the repayment is split into monthly installments for the entire duration regardless of its length. During the initial years of this type of loan, only a small amount of principal amount is paid off and the majority portion of the monthly installments is used to pay off the interest. Fixed rate loans can be 10, 15, 20 or 30 years of duration.

2.    Adjustable Rate Mortgage Loans (ARMs): Unlike fixed rate loans, the interest rate on ARMs changes from year to year. The most prevalent type of ARM is Hybrid ARMs. A hybrid ARM comprises the qualities of both Fixed Rate mortgages and Adjustable Rate mortgages. In the initial years of a Hybrid ARM, the interest remains fixed and starts changing only after a pre-specified duration. Hybrid Mortgages can have anything from a three year to 10 year fixed rate interest period.

These are the two types of mortgage loans that are most common with potential homebuyers. All Western Mortgage offers best interest rates on both these types of mortgages. So, if you are on the hunt for mortgage purchase, call us on 702-850-2790 or visit our website – www.awmlending.com now.

Adjustable Rate Mortgage: What is it and what are its Benefits

An Adjustable Rate Mortgage loan is a type of home loan in which the interest rate adjusts after a specific period, generally after3, 5, or 7 years. The common perception with ARMs is that they are risky, and many homeowners prefer the safety of a fixed rate mortgage, in which the interest rate remains fixed throughout the term of the loan.

However, the new age hybrid ARMs aim to negate the risk and also offer a variety of benefits. A hybrid Adjustable Rate Mortgage offers a loan at a fixed rate for the initial years of the loan term and only after the completion of the fixed rate duration, the rates start to adjust. Moreover, there are caps on the adjustments of the interest rates to protect the borrowers from paying more than a pre-specified percentage of interest.

Another major benefit of hybrid ARMs is that for the initial years, the interest rate that remains fixed is less than the interest rate offered by FRMs, which allows you to save thousands of dollars in that time period.

Types of ARMs offered by All Western Mortgage:

•    3/1 year adjustable rate mortgage: The interest rate remains fixed for the initial 3 years and starts adjusting yearly after that.
•    5/1 year adjustable rate mortgage: The interest rate remains fixed for the initial 5 years and starts adjusting yearly after that.
•    7/1 year adjustable rate mortgage: The interest rate remains fixed for the initial 7 years and starts adjusting yearly after that.

Our ARMs are amortized over 30 years.  To know more about our ARMs call us on 702-850-2790 or visit our website – www.awmlending.com now.

How Much House Can I Afford: Importance of Mortgage Affordability Calculators

If you are in the market looking to buy a new home, the term mortgage must have crossed your mind a million times and you must be wondering, “How much house can I afford?” This is undoubtedly the most important question that needs to be answered before you jump into taking a mortgage.

Most people wish to know how much mortgage they can afford based on their salary. Unfortunately, it is not that easy. Income cannot be the only deciding factor in establishing your mortgage affordability.

For example, you earn $100,000 in a year, but also own a Mercedes on loan and its repayment sets you back by $2000 every month. In such a case, it won’t matter if you are in the 6 figure club as another person who is making $75,000 a year, but owns a Volvo outright, will be able to afford approximately same amount for mortgage payments.

Many factors will come into play while establishing your mortgage affordability accurately. Most important of those factors will be your monthly expenses and proposed mortgage payments. In simpler terms, we need to check a lot more than your income.

The best way to establish your mortgage affordability is to look at your monthly take-home income and then compare it with all your monthly expenses. All Western Mortgage’s mortgage affordability calculator efficiently takes all these factors into account to accurately predict how much income you will require to afford a particular mortgage loan. You can check it out here - http://www.awmlending.com/calculators-affordability.php

All Western Mortgage has developed various tools and calculators to help you easily calculate all your expenses that effect your mortgage payments. The home affordability calculator is only one such tool. Moreover, our expert lenders are always with you to guide you through the entire loan procedure. So, call us on 702-850-2790 now and allow us to help you in realizing your dream of buying a home.

Benefits of Refinancing Your Mortgage

Many people refinance their mortgage due to a lot of reasons. But, before we get to the benefits of refinancing, let us see what the term actually means.  Mortgage Refinance simply means clearing the existing mortgage and replacing it with a new one that is available at better terms. The various benefits of refinancing at the right time are listed below:

Mortgage Refinance

• Lower Monthly payments: The major benefit due to which people refinance their mortgage is the substantially reduced amount of monthly payments. If the interest rate goes down below 2% than the rate at which you acquired the initial mortgage, it can reduce the amount of your monthly installments drastically. Therefore, it makes sense to refinance your mortgage in such a scenario.

Refinance Mortgage

• Building equity faster: If you can afford to pay a higher amount as monthly installments due to some reason or if you can reduce the loan term at the same amount of monthly installments due to a fall in the mortgage refinance interest rates, you might want to switch from a 30 year loan to a 15 year loan as it will build your equity faster.

Mortgage Refinance Company

• Changing loan type: Another benefit of approaching a mortgage refinance company is that you can change your loan type. If you feel that ARM type is offering you a better deal than your existing FRM or vice versa, you can refinance your loan and get it changed according to your needs and financial requirements.

Do you feel it is the right time to refinance? We can help you with it and tell you if it’ll be a good option for you or not. Call All Western Mortgage on 702-850-2790 or visit http://www.awmlending.com/mortgage-refinance.php to know more. Our professional mortgage refinance experts will be happy to help you.

All You Need To Know About FHA Loans

FHA Home Loans are government insured home mortgage loans that are not as stringent as conventional loans and offer more flexible lending requirements. FHA Loans are available with both fixed rates and adjustable rates, however due to their flexible nature the interest rates on them tend to be somewhat higher and a borrower might also have to pay monthly Private Mortgage Insurance (PMI) premiums.

These Federal Housing Administration Loans are insured by the FHA and have an easier qualification process due to less strict credit and down payment requirements than the conventional type of home loans.

The major benefits of these loans are as follows:

• Lower Down Payments: You can qualify for an FHA mortgage with a down payment as low as 3.5%. However the interest rates might be higher than the conventional loans.

• Lower Credit Benchmarks: One of the best benefits of FHA loans is that you can qualify for them even with a bad credit history.

• Best for Refinance: Many borrowers with newly adjusted ARMs on the higher end look to refinance their mortgages into Fixed-rate FHA mortgages.

Requirements

• Amount of the Loan: Maximum mortgage limits under FHA loans vary by the state.
• Down Payment: Minimum down payment of 3.5% is required.
• Condition of the Property/Home: One of the major guidelines governing the FHA loans states that the home being purchased meets certain conditions and gets appraised by an FHA approved appraiser. Also, FHA loans are available only if they are to be used to buy a home that serves as the primary residence of the borrower.

The Bottom Line

An FHA home loan will be a great option for you if you have less than perfect credit score or limited cash for down payment.
All Western Mortgage is an FHA certified lender and if you don’t have a perfect credit or enough cash for making 20% down payment, we’ll be happy to help you in providing a loan so that you can purchase a place, which you can call home.