Everything You Need to Know About Refinancing Your Mortgage

September 16, 2021 by Mitch Stam

Buying a home, especially for a first-time homebuyer in Phoenix, is one of the most significant financial choices you’ll ever make. However, it is important to note that the decisions don’t end there. If you really want to manage your finances effectively, it’s vital that you explore all the possible options when it comes to your home. One thing that you’ll want to consider doing is refinancing your mortgage.

This can be rather intimidating as many of you may not know how to go about doing this. To help you out, we’ve prepared a brief discussion on refinancing your mortgage. If this is something that you want to know more about, read on as we break down everything you need to know about mortgage refinancing.

Reasons for Refinancing

The main question that’s on all of your minds is why should you even consider refinancing in the first place. Well, refinancing your mortgage can have a slew of different benefits as long as the situation is right. Here are the most common reasons for refinancing:

Reduced Payments: One significant reason for refinancing is it can lead to reduced payments. Some people may not know this but the rates for loans are always changing. This is doubly true if a significant time has passed since you last took out your loan. If the rates and terms are more favorable then you should refinance your mortgage to help you save more money down the line.
Increased Property Value: The rates for mortgages aren’t the only things that are changing. Property values are also perpetually changing, as the market dictates the value of your property. If your property value has increased, then you should definitely consider refinancing. Refinancing when your property’s value has increased gives you access to better terms and rates.
Significant Financial Changes: If your income has increased and you can now afford to pay a higher rate, then it might be time to refinance. While paying a higher rate may seem unwise, it allows you to pay off the loan much quicker. Fully paying off your mortgage is crucial as it will give you infinitely more financial flexibility for the years to come.

Steps on How to Refinance Your Mortgage

Given the many advantages attached to refinancing, many of you may want to know how to go about doing this. Here are the steps that you need to take in order to refinance your mortgage:

Set a Financial Goal: Before you do anything, be sure that you have a clear financial motive for refinancing. The last thing you want is to waste time and resources doing something that may not even be necessary.
Check Your Credit Score and History: Once you’re certain that you want to refinance your mortgage, you should check your credit score and credit history. You will need to have a good credit score and history in order to be approved for refinancing. The better your score and history are, the better rates and terms you’ll be getting.
Determine Home Equity: Since home equity is the value of your home in excess of what you owe your mortgage lender on your loan, it’s important that you know how much home equity you actually have before refinancing your mortgage. This will give you a good idea of what type of deal you should be able to get. The more equity you have, the less risky it is for your lenders to allow you to refinance.
Peruse Different Mortgage Lenders: Not all lenders are the same. This is why you’ll want to check out different mortgage lenders to see which one will give you the best rate for refinancing. Doing this can potentially save you hundreds, if not thousands, of dollars.
Be Transparent with Your Finances: A little transparency goes a long way when it comes to refinancing. If your lender has an accurate picture of your finances, the more likely it is for your refinancing to be approved. Be sure to pass along all the pay stubs, federal tax returns, and bank statements to your mortgage lender upon request.

Get Your Property Appraised: Once that’s all done, your mortgage lender will have to appraise your property to determine its current market value. Be sure to inform your lender of any improvements and repairs that you have made to the property to get the best appraisal possible.

Conclusion

We hope this article proves to be useful when it comes to helping you better understand mortgage refinancing. As you can see, it’s not really that complicated and can be done by pretty much anyone as long as the necessary preparations are made. For more information on mortgage refinancing, it’s best to speak with professional mortgage experts.

Desert Springs Mortgage is a full-service mortgage company in Phoenix, Arizona. We offer our clients FHA loans, VA loans, asset-based lending, and other financing options. For more information, visit our website or call us at (623) 432-1309!

Home Loans: Essential Things to Consider Before Applying

September 9, 2021 by Mitch Stam

Buying your own home is one of the biggest dreams, and it’s also one of the biggest decisions you’ll ever make in your life. It will require long time planning, commitment, and of course, money. Fortunately, you can do something about the money to make your plans possible.

Let us introduce you to home loans. You can turn to a home loan if you can’t pay the total cost of the house you like out of your pocket. It can be extremely useful for homebuyers like you, especially if you really want to have your own place already. However, you need to keep in mind that not everyone who wants to buy a house can qualify for a home loan. And as a borrower, you need to ensure that you are ready to commit because it is a long-term financial investment.

Essential Things to Consider Before Applying For a Home Loan

Before you apply for a home loan, here are the things that you need to consider:

Ensure that You Have Enough Loan Down Payment on a Mortgage. One of the biggest challenges of applying for a home loan is the down payment you need to make. Remember that you have to pay off 10% to 25% of the property’s value, so you need to ensure that you have enough money for the down payment before you apply. It’s recommended to put more money down so that you will pay less in fees and interest over the loan’s lifetime. Keep in mind that a home loan is a big financial investment; avoid accumulating the loan down payment with margin income. Otherwise, you may not be able to pay it off over time.
Watch Out for Your Credit Score. A credit score is one of the crucial factors that lenders consider if they will approve the loan or not. If you plan to apply for a home loan, make sure to build your credit score because a credit score around 750 has a higher chance of getting a better deal and approval.
Research for the Best Home Loan Providers. If you want to get the best deals, make sure you do your research before applying for a home loan. You must be equipped with information on the current property rates to know if you are getting the best offer. While doing your research, try to list down different home loan providers and compare their terms, interest rates, and other requirements. This way will help you measure which among them are the best.
Gauge If You Can Afford the Loan. Before committing to any contract or loans, ask yourself if you can manage the financial responsibility in the long run. Again, home loans are a big decision to make. Carefully study if your income will suffice to pay for a home loan’s interests and necessary expenses. We recommend researching the complete details of a home loan or ask your home loan providers about any concerns you may have before running to a conclusion.

Conclusion

Applying for a home loan is a serious matter that needs careful consideration and planning. Aside from what you need to consider, you also need to ask yourself if you are ready to enter a commitment. We hope this guide has given you enough information to make the most informed decision before applying for a home loan. Once you are fully decided, you should find the best mortgage broker that can offer you suitable support for your home loan application.

Apply For a Home Loans At Desert Springs Mortgage Today!

Are you looking for a home loan in Phoenix? Desert Springs Mortgage is a full-service mortgage brokerage, offering conventional loans, FHA loans, commercial lending, VA loans, and other financing options. Call us at (623) 432-1309 to know more!

5 Crucial Steps to Take In Buying Your First Home

August 27, 2021 by Mitch Stam

Wanting a new home for yourself goes beyond just realizing the dream, especially if it’s the first time. Of course, it’s a significant milestone worth celebrating, but this milestone affects almost every aspect of your life, from finances to your family and your career.

Naturally, you must make guided decisions before making the biggest purchase of your life. Here are the five crucial steps to take in buying your first home.

Step One: Find Out If You’re Ready.

Homeownership comes with many responsibilities, and it never truly ends after closing a deal on a property. With buying a new home, you are also expected to cover monthly maintenance and utility expenses, besides your other costs for food, water, shopping, phone bills, credit card, etc. That said, don’t give in to the pressure just because family and peers have bought their own homes. Find out if you’re ready and consult a financial manager if necessary. Before making the big step, also account for your savings, emergency fund, and business or career stability. Without ensuring these aspects of your life, you could find yourself in sticky financial situations.

Step Two: Choose The Most Suitable Loan and Payment Option.

It’s safe to assume that you may need a loan to cover the expenses of obtaining your new home. With that said, you must also seek the professional advice of a mortgage broker to help you cut expensive costs. This way, you will be presented with the best options, such as adjustable-rate mortgages and fixed-rate mortgages. With an adjustable-rate mortgage, interest rates fluctuate over time. Although the initial rate is lower, the rate may rise according to the market, making payments unpredictable. Meanwhile, a fixed-rate mortgage does not fluctuate with the market or the economy and provides you with a fixed monthly fee to simplify budgeting. If interest rates fall, you may be able to refinance and save money.

Additionally, be wary of hybrid mortgages that begin with a low fixed rate and then move to a higher variable rate. You must also research the most suitable payment options that fit your lifestyle. Some people prefer 15- to 20-year loans since they are shorter and offer lower interest rates. On the other hand, 30-year loans are popular for their reduced monthly payment, although with higher interest rates.

Step Three: Prepare Your Down Payment.

Most homes require a 20% down payment. Paying less than this amount may cost you private mortgage insurance (PMI), which is one more thing you have to consider as a buyer. To err on the side of caution, make sure you secure your downpayment to avoid future financial pitfalls.

Step Four: Find a Real Estate Agent You Trust.

After determining your budget and getting pre-approved for a mortgage, choose a decent real estate agent to assist you in selecting a home that meets your demands while remaining within your budget. Once you’ve made an offer, your agent should get you the best deal possible. They can also assist you with the paperwork and closing procedure.

Step Five: Do a Complete Home Inspection.

Once you’ve found the right property, have it thoroughly inspected for hidden flaws before making the big purchase. A thorough house inspection can discover deficiencies that may dissuade you from purchasing the property, such as mold, termites, foundation problems, or leaks.

Mitch Stam of Desert Springs Mortgage LLC quoted “If you are aware that the house needs significant repairs, you may negotiate a lower price, but ultimately, a failed home inspection test can be used to justify walking away from a contract without losing earnest money.”

Buying Your First Home with Desert Springs Mortgage

Buying your first home takes patience and perseverance. It involves a lot of time and effort to pick out the best loan, assess your finances, and find an agent you trust. Once you sign the final papers and change your accounts’ address, you’ll find yourself entering a new adventure of moving in, repainting, and furnishing your new property. That said, make sure you’re ready for all these different stages because only then will your home be finally yours.

Are you a first-time homebuyer in Phoenix? Desert Springs Mortgage LLC is an outstanding full-service mortgage brokerage that offers multiple financing options. With us, you can find exactly what you’ll need. Call us today at (623) 432-1309!