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- Arizona Mortgage Overview
Arizona mortgage brokers categorize home loans into two groups based on the loan amount, conforming loans with a current maximum of $333,700 for single family homes, and non-conforming loans with an amount over the conforming limit. The reason has to do with mortgage investors like Fannie Mae or Freddie Mac that we use as a Arizona mortgage broker, but to the consumer, the main difference is the interest rate. Non-conforming home loans usually have a higher rate of up to 1/2%.
- Arizona Mortgage Fixed Rates
Arizona mortgage fixed rate home loans are simple interest, fully amortized loans, with payments that remain the same for the full term, which is usually for 30 or 15 years, although some home lenders may offer variations such as 20 year loan terms. The advantage of a 15 year Arizona mortgage home loan is the accelerated principal reduction, while the disadvantage can be the higher monthly payments.
- Arizona Mortgage Adjustable Rates
Arizona mortgage adjustable rate home loans are typically 30 year, simple interest, fully amortized loans, which may not be subject to the conforming lending limits. The Arizona mortgage interest rate is determined by adding an index plus a margin. The index is a financial point of reference, such as, the 11th district cost of funds or the one year treasury, and is the part that fluctuates according to economic conditions, while the margin always remains the same. Rate adjustment periods can be monthly, every six months, or yearly, and hybrid types of home loans which are fixed for the initial 3, 5, or 7 years, with the remaining term adjusting usually on a yearly basis.
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