If you do not have enough money to buy a house in Arizona then you will need a mortgage. The legal document that your mortgage lender records on your home’s deed is called a mortgage. The mortgage, including the mortgage note, are the most important documents you get from your mortgage lender when you buy your home as they spell out the terms that you agree to follow while you have your mortgage.
Below are the key components of a mortgage in Arizona:
- the amount of money the lender is loaning to you,
- your interest rate,
- is your mortgage fixed or adjustable,
- how long will you be paying on your mortgage,
- when is your mortgage payment due,
- the mortgage bank’s alternatives if you stop making your mortgage payment, and
- what are your options if you fall behind on your mortgage payments.
The key to having a good relationship with your mortgage company is to touch base with your mortgage lender if you are going to be late with your monthly payment and follow what your mortgage documents stipulate.
Below you can find a list of home loan programs for buying a house:
- Fixed rate mortgage – The fixed rate home loan is the most prevalent home loan because the rate of interest is fixed for the term of the loan. Fixed rate mortgages can range from 10-40 years. Because the interest rate remains fixed for the whole term of the mortgage the fixed rate mortgage is the most conservative mortgage of all the home loan programs.
- Interest only home loans – The interest only mortgage offers a fixed rate of interest for the life of the mortgage with a period of time where you only have to pay the interest payment every month. If you want the most conservative mortgage program then the interest only home loan is probably not for you. Of all the interest only mortgages, the 10 year interest only mortgage is the most popular.
- Adjustable rate mortgage – ARM – Due to the nature of the ARM, you may want to consider this home mortgage program if you only plan to live in your home a few years. The most common adjustable rate mortgage mortgage is the 5 year adjustable rate mortgage (ARM). All ARMs have a fixed rate period and an adjustable rate period. The ARM is the most risky mortgage program because at the end of the fixed interest rate period you could be faced with a mortgage you cannot afford if you cannot get rid of the mortgage and the interest rates go up a lot.
