The Different types of Arizona Mortgage and Rates

Fixed Rate Mortgage (FRM) – Fixed Rate loans have been the traditional way to borrow money for a mortgage over the years. The rates are based off of the market, loan amount, credit, and the term that is agreed upon by the borrower and financial institution. The most common terms are 15-year and 30-year mortgages, but there are shorter and longer time periods available with different financial institutions. Because the time periods are longer and have a fixed rate the interest rate is usually higher the other option below. The 30 year mortgage is the most common among residential home owner’s in Arizona, they are the most reliable and practical for an individual or family that are primarily interested in living in their Arizona home.

Adjustable Rate Mortgage (ARM) – is a mortgage where the interest rate on the note is periodically adjusted based on a variety of indices. Adjustable Rate Mortgage (ARM) loans generally permit the borrower to lower their initial payments if they are willing to assume the risk of interest rate changes. Often Adjustable Rate mortgages are used for investors who know that they will only own an Arizona property for a short period of time, the investor can keep a low payment and sell the property before he/she sees an increased in percentage. Many investors will often buy foreclosures in Arizona or Arizona land and attempt to turn it for a profit before the Adjustable Rate Mortgage (ARM) interest rates rise.  

Balloon Rate Mortgage is a mortgage which does not fully amortize over the term of a note, which in turn leaves a balance that is due at its maturity. The final payment due at this time is called a balloon payment because of its large size. Balloon payments are primarily used for commercial real estate, where the developer plans to have enough capital to pay the remaining balance at the end of the term. If you are interested in purchasing Arizona land with the intent to build commercial properties then a balloon rate may be perfect for you or your business. Many of the Arizona cities need commercial and office building to meet the demand of the surrounding residents. Because Arizona has grown so quickly over the last twenty years many cities including Phoenix, Scottsdale, Tucson, Sun City and Tempe have not been able to keep up with commercial development.

Jumbo Loans Mortgage is a mortgage with a loan amount above the industry-standard definition of conventional conforming loan limits. These mortgage loans are usually for luxury homes that are in excess of approximately $500,000.00 and more often than not require a larger down payment from the mortgagor. These loans are much more risky because the properties bought with these loans of ten only fit niche markets and demographics making them harder to sell if the mortgagor defaults on their loan. These loans are not normally used for the average home owner in Arizona, but if you are looking at home in some of the more expensive cities like Phoenix, Scottsdale, Chandler, and Gilbert then this may be the best mortgage option for you.
If you are interested in any kind of mortgage in Arizona then please fill out the information below and we will help you find the mortgage that is right for you.