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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 or 602. 687.9933.

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

Okay, so you were young and did not take care of your bills like you should have. Now, you want to buy a house. Do not despair!

You can improve your credit over time. Credit reports and scores generally cover only the previous two year. Major credit issues such as bankruptcy remain on your report for 10 years. Improving your credit involves displaying good credit behavior:

  •  Pay monthly bills: Pay all loans and other monthly bills promptly and in full every month.
  •  Pay off credit cards: Pay off your credit car bills on time and in full every month. Always pay more than the minimum monthly payment on your credit cards.
  • Never max out credit cards: Maxed-out cards send out a “red flag” to creditors. They will question your spending habits.
  • Don’t get more credit cards than you need: Owning several credit cards can suggest that you have cash flow problems, even if no problem exists. 

If you have good credit, apply for a mortgage and then get turned down ask the lender to provide you with a written explanation. The lender must supply one. The explanation will identify the problems with your credit so that you know what needs improvement.

For any questions relating to your financial history, ask your financial adviser.

For any other questions, please do not hesitate to contact us at: or 602.687.9933.

 “Cash is king” is the mantra heard all over the financial world but when you are purchasing a home, your credit should be “golden”.

A lender considering whether to approve you for a home mortgage will examine your credit history. Credit history is your record of paying back loans, including credit card bills.

If you have a “good” credit history of repaying loans on time and in full, you can usually (but not always due to the strict guidelines the banks have set in place) get approved for loans with lower interest rates.  If you a ‘bad” credit history of missing payments or paying only minimum balances, your loans may be with a higher interest rate.

Sometimes you may not be able to be approved for a loan at all.

If you are thinking about buying a home, even years from now, maintain good credit. Keep your credit “golden”.

Credit Reports

You need to know what your credit score is and what your financial institution considers “good” credit. As always, ask your financial consultant for advice. You may request a credit report, a report that details your debt and payment history.  Credit reports typically include a credit score (also called a FICO score) that gives lenders a quick summary of the quality of your credit.

FICO scores range from 300 to 900 or more. Generally, a score of 700 or above is considered “good”, while a score below “700” may be a disadvantage while attempting to secure a lower interest rate loan. Again, the banks are strict so these numbers may vary.

To order a credit report, contact one of the three major credit bureaus; Experian, TransUnion, or Equifax.

A new law entitles all Americans to one free credit report per year, available at Monitor your credit and check the reports for errors.

For any other questions, please do not hesitate to contact us at: or 602.687.9933.

 Downtown Phoenix residential properties, First Time Homebuyer