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Unless you have been left with truckloads of money by your deceased Uncle Sal, you will need to pay a down payment and get a mortgage.

A down payment is a percentage of the total purchase price of the home. The mortgage loan is the money used to cover the rest of the expense of buying the home.

Mortgages work as follows:

  • Loan: A lender, such as a bank, agrees to lend the home buyer an amount equal to the difference between the down payment and the full purchase price of the home.  The amount of the loan is called the pricipal.  If a home costs $100,000 and the buyer pays a 20% down payment of $20,000, the pricipal is $80,000.
  • Repayment: The buyer must repay the lender over time through monthly mortgage payments. These payments typically pay down the principal plus interest. If the buyer fails to pay the mortgage, the lender can foreclose on the house, taking it back from the buyer.

Frequently, lenders today expect a 20% down payment of the total purchase price. Ask your mortgage adviser if there are any special mortgage programs available to first time homebuyers. Some first time homebuyers are eligible for a FHA (Federal Housing Administration) loan. These types of loans require down payments of just 1-3%. Talk with your lender, find out your best options, and you will better informed of the type of loan that best suits you.

For any questions on mortgages or financial matters, consult your mortgage and financial adviser.

For any other real estate questions, contact us at Info@MetroRealtyphx.com or 602. 687.9933.

Phoenix real estate, residential,Phoenix homes, first time homebuyers

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via Realty Times – Top Ten Things to Know When Investing in Real Estate Notes in Your IRA.

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Downtown Phoenix-The long-awaited Health Sciences Education Building will likely begin construction in the next 6-8 weeks following a hearing held this morning by the Joint Committee on Capital Review.

The shovel-ready project had received approval and funding, but was delayed over concerns with funding other capital improvement projects in the near future. The $187 million building will become part of the U of A College of Medicine – Phoenix in partnership with ASU campus, near the northwest corner of 7th Street and Van Buren.

The 268,000 square foot building is expected to be completed in 2012 and will allow the College to expand to 110 students per class. Currently, the school can only accommodate 48 students per class. The project will be funded through bonds to be repaid by future lottery funds, not by state general funds.

Real Estate Corner… by Dennis Kolodin, CCIM Metro Realty

Q: How Long Do Potential Buyers Need to Wait after a Bankruptcy, Foreclosure or Short Sale before Obtaining Financing?
A. This is a frequent question these days. Below is a summary by loan type of the waiting period to obtain financing post a Bankruptcy, Foreclosure or Short Sale.

CONVENTIONAL

* Chapter 7 Bankruptcy: 4 years from discharge date
* Chapter 13 Bankruptcy: 2 years from discharge date
* Foreclosure: 4 years from completion date
* Deed-In-Lieu of Foreclosure: 4 years from completion date
* Short Sale: 2 years from completion date

FHA

* Chapter 7 Bankruptcy: 2 years from discharge date
* Chapter 13 Bankruptcy: 1 year of the payout must elapse and payment
* Performance must be satisfactory- buyer must receive permission from the court to enter into a mortgage
* Foreclosure: 3 years from completion date
* Short Sale: 1 year from completion date if the borrower was current at the time of the short sale and all installment payments for a 12 month period: 3 years from completion date if in default at time of short sale

VA

* Chapter 7 Bankruptcy: 2 years from discharge date
* Chapter 13 Bankruptcy: 1 year of the payout must elapse and payment performance must be satisfactory-buyer must receiver permission from the court to enter into a mortgage
* Foreclosure: 2 years form completion date
* Short Sale: No specific information on this yet, assume foreclosure rule of 2 years

USDA Rural

* Bankruptcy (Ch 7 & 13): 3 years from discharge date
* Foreclosure: 3 years from completion date
* Short Sale: No specific information on this yet, assume foreclosure rule of 3 years

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