What is a mortgage? Prescott Arizona real estate listings

Buyers

Sellers

Home

Search

Investors

Featured Homes

Search Listings

My Listings

SAVE Thousands

1st Time Buyers

Only 5% Down

Costly Mistakes

Relocation Kit

Money/Finance

Investor Alert

Expert Answers

Free Newsletter

Get TOP Dollar

Costly Mistakes

Hard Questions

4-Sale By Owner

Contact Me

Area Resources

What is a Mortgage?
What is a mortgage?
Generally speaking, a mortgage is a loan obtained to purchase Prescott Arizona real estate. The "mortgage" itself is a lien (a legal claim) on the home or property that secures the promise to pay the debt. All mortgages have two features in common: principal and interest.
What is a loan-to-value (LTV) ratio? How does it determine the size of the loan?
The LTV ratio is the amount of money you borrow compared with the price or appraised value of the home you are purchasing. Each loan has a specific LTV limit. For example: with a 95% LTV loan on a home priced at $50,000, you could borrow up to $47,500 (95% of $50,000), and would have to pay $2,500 as a down payment. The LTV ratio reflects the amount of equity borrowers have in their homes. The higher the LTV ratio, the less cash homebuyers are required to pay out of their own funds. So, to protect lenders against potential loss in case of default, higher LTV loans (80% or more) usually require a mortgage insurance policy.
What types of loans are available and what are the advantages of each?
Fixed Rate Mortgages: Payments remain the same for the life of the loan. The biggest advantage is a predictable housing cost that remains unaffected by interest rate changes and inflation. Adjustable Rate Mortgages (ARMS): Payments increase or decrease on a regular schedule with changes in interest rates; increases subject to limits. Balloon Mortgage: Offers very low rates for an initial period of time (usually 5, 7, or 10 years); when time has elapsed, the balance is due or refinanced (though not automatically). Two-Step Mortgage: Interest rate adjusts only once and remains the same for the life of the loan ARMS linked to a specific index or margin.
When do ARMs make sense?
An ARM may make sense if you are confident that your income will increase steadily over the years or if you anticipate a move in the near future and aren't concerned about potential increases in interest rates.
What are the advantages of 15- and 30-year loan terms?
30-Year: In the first 23 years of the loan, more interest is paid off than principal, meaning larger tax deductions. As inflation and costs of living increase, mortgage payments become a smaller part of overall expenses. 15-year: Loan is usually made at a lower interest rate. Equity is built faster because early payments pay more principal.
FREE Insider Report	NEXT

Debbie Dunbar
ABR, CCSS, REALTOR

Direct: 928.899.1867
Fax: 928.778.0755
Contact Me

Russ Lyon Realty
of Prescott
PRESCOTT ARIZONA

Search Homes | Buy a Home | Sell a Home | Contact

Our complete Table of Contents will guide you
to your immediate interests.

   DebbieDunbar.com will guide you to Prescott, Prescott Valley and Chino Valley, AZ homes for sale and property listings. You will also find an extremely valuable treasure of knowledge. Debbie Dunbar, is a licensed real estate agent for Russ Lyon Realty. Highly trained, educated, and experienced to efficiently, promptly, and professionally meet your expectations, dreams, and goals. We serve home buyers, sellers and investors with all their real estate needs. We will help you buy or sell your house, condo, townhouse, loft, land, lot, apartment, condominium, properties, et cetera.
   You will also find hundreds of pages of information, advice, methods, techniques, and more, all regarding real estate. Reports are available in a print-friendly format. It is like a mini-seminar, a training course on buying, selling, investment strategies, preparation, financing, legalities, and so much more. You will be made aware of the pitfalls in buying and how to avoid serious mistakes when selling. Discover why this professional real estate agent will make your home buying and/or selling process less stressful and virtually pain free. You will understand how to come out ahead in your negotiations to make your transaction a memorable and profitable experience. There is even a guide on how to sell your home yourself, without an agent or broker. This is known as a "fsbo" or for sale by owner. You will learn what it takes to sell property and understand how and why real estate professionals earn their commissions.
   All is expertly written by a highly successful retired real estate agent/broker. Taken from his actual weekend seminar curriculum that was presented to agents, brokers, home buyers, sellers, and investors across the United States and Canada.
   In addition, we have provided numerous links to sites of local interest and official governmental websites. These will assist you in your search for a home or a buyer for your home.
   Learn from our website, search our real estate listings, then contact Debbie for relocation information in Prescott, Prescott Valley, or Chino Valley, Arizona.

Site maintained by Realty Profit Systems

© Copyright 2000-2007.
All rights reserved, by Listech, Inc.

debbiedunbar.com