Regardless of what type of home or homes you’re looking to buy, you will likely need help from an Arizona investor loan to finance your properties. Most people choose to invest in real estate in order to turn a potential profit. For this reason and others, investor loans are used simply for that—investing. These loans are not applicably used for primary residences as a normal mortgage loan would be. They are ideal for secondary residences for a variety of reasons.

First, there is an assortment of investor loan lenders out there to choose from. It’s important that you shop around for the best interest rates and points available to you. There will also be several loans types that you will likely be able to choose from, so it’s important for you to plan ahead for the future of your investor loan. That plan will determine which type of loan is best for your needs.

If you plan to buy a secondary property for the sake of renting it for a profit, your best choice is probably a fixed-rate mortgage loan. Fixed-rate mortgage loans are great for long-term financing because the interest rate remains constant throughout the loan period. Theoretically, if you begin with a 7% interest rate on your fixed-rate mortgage loan, the mortgage payments will also end at 7% interest. It really is that simple.

For other plans for your secondary property that don’t include renting it out, you may be better off getting an ARM (adjustable-rate mortgage) loan. An ARM loan is especially beneficial for those looking to keep their secondary residence for a short time; a few years, at the most. This is because ARM loans begin with a fixed-rate for the first few years of the loan. The starting rate is usually substantially smaller than that of a fixed-rate loan, which is why many choose to go this route. For example, if the average interest rate on a home is 7% with a fixed-rate loan, it probably wouldn’t be unusual to see an ARM loan with a beginning rate of 4%. Once the first few years have passed, you will periodically see an adjustment to the rate in correlation with the economy and the rest of the real estate market.

In short, now is a great time in the Arizona real estate market to buy both primary residences and secondary properties. With the vast amount of homes to choose from on the market today, as well as the historically low prices, it’s no surprise that many people who previously dwelled in apartments and the like are turning to Arizona investor loans to buy homes for the first time.

Joel McLaughlin
Learn more about Arizona Home Loans & Mortgages
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In comparison with normal mortgage loans, FHA loans usually have fairly low loan-closing costs. This can be especially beneficial for those who live on a tight budget in addition to the expense of a new home. In addition to lower loan-closing fees, FHA loans typically allow for a lower interest rate during the loan period as well, whether you have a fixed-rate mortgage, adjustable-rate mortgage, or virtually any other type of loan. So you won’t only pay less upfront—you’re likely to also pay less overall.

You don’t have to be a first-time homebuyer in order to qualify for an FHA loan. Virtually anyone with the right qualifications can apply for this type of loan. Some people find that they are unsure whether or not they can receive any type of mortgage loan due to a poor credit score. FHA loans, however, are renowned for offering approval to many who have less-than-perfect credit. One of the most important factors in qualifying for an FHA loan is your debt to income (DTI) percentage. FHA loans offer one of the highest DTI percentages in the nation at an astounding 55%. This means that as a homebuyer, you can use 55% of your income to qualify for your loan. With a higher percentage of your income in your favor, you will be able to apply for more financing to buy an even better home.

As well as overall lower interest rates, lower loan-closing costs, and a higher DTI percentage, FHA loans are also known for requiring little to no money down on the mortgage. Lenders can do this because they are confident in the FHA’s guarantee against default. Because of this insurance, lenders are typically willing to offer better deals on virtually every aspect of an FHA mortgage loan.

One additional perk that most don’t know about is the FHA’s willingness to help extend the amount of a loan in order to provide home remodeling. For example, your idea of a dream home may be a fixer-upper that you can remodel, refurbish, and revive all on your own. If you don’t have the money to make these remodels when you purchase your house, however, those additional expenses can actually be included in the mortgage. So let’s say theoretically that you want to buy a fixer-upper for $100,000, and you and your lender work together to estimate the repairs needed to be worth $50,000. You can then take out an FHA loan for $150,000 under certain restrictions pertaining to the home remodeling. In this way and more, Arizona mortgage consultants are making it easier than ever for you to get an FHA mortgage loan.

Joel McLaughlin

Article written & distributed by Dataflurry

Adjustable rate loans - Most first time homebuyers are a little stretched financially. With FHA’s Arizona adjustable rate mortgage (ARM), the initial interest rate and monthly payments are low, but these may change during the life of the loan. FHA uses the 1-Year Constant Maturity Treasury Index (CMT) to calculate the changes in interest rates. An index is a measure of interest rate changes that determine how much the interest rate on an ARM will change over time.

The maximum amount that the interest rate on your loan may increase or decrease in any one year is 1 or 2 percentage points depending upon the type of ARM you choose. Over the life of the loan, the maximum interest rate change is 5 or 6 percentage points from the initial rate. The advantage of selecting an ARM is that you may be able to expand your house hunting value range because your initial interest rate will be low, as will your payment.

Purchase/rehabilitation loans - Sometimes you might see a home you’d like to buy, but it needs a lot of work. FHA has a loan for rehabilitating and repairing single family properties called the SF Rehabilitation Loan program (203k). You can get one loan which combines the mortgage and the cost of repairs. The mortgage amount is based on the projected value of the property with the work completed. The advantage of this loan is that you can buy a home that needs a lot of work, but have only one mortgage payment, and you can complete the repairs after buying the home.

Indian Reservations and Other Restricted Lands - A family who purchases a home under this program can apply for financing through an FHA-approved lending institution such as a bank, savings and loan, or a mortgage company. To qualify, the borrower must meet standard FHA credit qualifications. An eligible borrower can receive approximately 97% financing and use a gift for the down payment. Closing cost can be financed, covered by a gift, grant or secondary financing, or paid by the seller without reduction in value.

Visit http://www.fhaloanaz.com/ for more information regarding your Arizona home loan needs!

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