If you’re buying a house or refinancing your loan, here’s what you need to know.
For millions of Americans, a mortgage is the biggest debt they’ll ever have to repay. Unfortunately, as anyone who’s ever gone through the process can attest, mortgages involve pages and pages of legal documentation that can be nearly impossible for most people to comprehend. To simplify mortgages, there are some basic guidelines that anyone can learn and commit to memory. Below, we’ll go through five useful rules about mortgages.
Rule 1: Keep your mortgage payment to 25% or less of your income.
Housing costs are typically the largest expense item in your household budget, but that doesn’t mean you can afford to break the bank. Lenders look closely at your income to determine how much you can truly afford to pay for a monthly mortgage payment, and one simple guideline they use is to take your available income and multiply it by 25%. If a mortgage would require larger payments than that, after taking into account both the loan itself and associated payments like property taxes and insurance, then a lender will generally be less comfortable in giving you the loan.
Rule 2: Avoid private mortgage insurance by making a 20% down payment.
Mortgage lenders typically require borrowers to obtain private mortgage insurance or PMI if they make a down payment that’s less than 20% of the value of the home. PMI protects lenders against the risk that the value of the home will fall below the outstanding principal balance on the mortgage, leaving the borrower “underwater” on the loan. For borrowers, however, it’s an added expense that essentially provides no value to them. As difficult as it can be to save up a 20% down payment, the hundreds of dollars in PMI that it will save you could make the difference between being able to afford a slightly more expensive home and having to settle for less.
Rule 3: Understand how adjustable rate mortgages work and what risks are involved.
Fixed mortgages are easier to understand because the interest rate that they charge never changes, so you can count on monthly mortgage payments remaining constant throughout the lifetime of your loan. That’s not the case with adjustable rate mortgages or ARMs, which only remain fixed for a set period. Most lenders refer to ARMs with two numbers, such as 5/1. The first number refers to how long the initial rate remains in place. The second number describes how often the rate adjusts after the initial rate ends. For a 5/1 ARM, the initial rate stays in place for five years, and then changes every year after that. When rates change, they’ll also change your monthly payment, so make sure you understand the illustrations that your mortgage documents will provide so you don’t get a nasty surprise at the end of the initial term.
Rule 4: Know whether you’ll actually be able to deduct your mortgage expenses.
Many people look forward to being able to deduct mortgage interest, property taxes, and other key expenses of owning a home. But one thing to keep in mind is that all of these tax breaks are only available if you itemize deductions on your tax return. If the cost of your interest and taxes isn’t enough, when combined with other itemized deductions, to exceed the standard deduction you’re entitled to receive, then buying a home won’t do you any good from a tax perspective. That shouldn’t necessarily stop you from making a purchase and taking out a mortgage loan, but it should inform you as to the true cost of doing so.
Rule 5: Be careful diverting retirement money toward a home purchase.
The tax laws governing retirement accounts allow you to make withdrawals from an IRA of up to $10,000 toward a first-time home purchase without having to pay the typical penalties for early withdrawal of your retirement savings. However, just because you can use IRA money toward a home purchase doesn’t mean you should. First, even though you won’t owe penalties, you will owe income tax on the money you withdraw, potentially leaving you with a big tax shortfall at the end of the year. More importantly, diverting that money from your retirement savings will leave you in a less favorable position in the long run with the size of your nest egg. As a potential source of down payment money, tapping an IRA can seem like a smart move, but be aware of the long-term consequences before you pull the trigger.
Buying a home will probably be the biggest purchase you ever make. Being smart about the debt you incur to buy your home is essential to avoid the mistakes that so many homeowners made during the financial crisis. Keeping these rules in mind will take you a long way toward a better understanding of the mortgage process and your mortgage loan.
Source: Â http://www.fool.com/investing/2016/05/28/5-mortgage-rules-you-should-know-by-heart.aspx?source=iedfolrf0000001
19050 S 196th Way Queen Creek, AZ 85142
$1,649,000
5
Beds
4.5
Baths
4,002
SqFt
Status
Active
MLS #
6781309
Property Type
Single Family Residence
Price Type
--
Don't let this incredible property in La Jara Farms pass you by! This stunning single-level home offers over 4,000 square feet of exquisite living space, including a private guest suite with its own bedroom, bathroom, kitchenette, walk-in closet, and sitting area—complete with a separate entrance. Inside, enjoy an open floor plan highlighted by a floor-to-ceiling stacked stone fireplace, plantation shutters, an office/den, a spacious walk-in pantry, a butler's pantry, and a striking 14.5' x 6.5' granite kitchen island at the center of it all. The expansive master bedroom features a tray ceiling and a luxurious ensuite with dual walk-in closets, a walk-in glass shower with dual rain showerheads, and a soaking tub. Seeking your own personal paradise? Step through the telescoping sliding glass doors to your dream backyard. Relax in the pebble tec pool, enjoy the tranquil waterfalls, gather around the gas firepit, or entertain at the outdoor kitchen/bar complete with a sink, outdoor fridge, gas grill, and a powerful 60,000 BTU side burner with a wok cut-out. Need more space for all your toys? The air-conditioned 50' x 20' RV garage is ready to accommodate, with additional paved parking next to it. This property also offers two RV gates, providing convenient access from the front to the back. There are too many pavers to count. The property boasts an RV dump to use, after you come back from your trips. Don't miss this exceptional opportunity!
733 E Campbell Avenue Gilbert, AZ 85234
$1,649,000
8
Beds
7
Baths
5,734
SqFt
Status
Active
MLS #
6768166
Property Type
Single Family Residence
Price Type
--
Welcome to your oasis of luxury and entertainment in Gilbert, where this nearly acre property offers unparalleled amenities without the burden of an HOA. The meticulously maintained landscape is irrigated for a mere ~$200 annually, ensuring lush surroundings year-round. Step inside to discover a renovated kitchen, featuring a stunning quartzite island and an inviting eat-in nook perfect for casual dining. Equipped with double ovens, gas stoves, a beverage fridge, and a separate ice maker, this kitchen is designed to cater to both everyday family meals and grand gatherings. Pull-out drawers in the cabinets provide effortless storage solutions, while the adjacent dining room comfortably seats over 14 guests. This home boasts not one but two primary bedrooms, each offering private walk-in showers and baths. The main level hosts a primary bedroom with dual closets, an adjoining office space, and a luxurious ensuite bathroom. Upstairs, the East wing features a spacious loft area and another expansive primary bedroom with a walk-out balcony. The basement has been tastefully remodeled with new flooring and a modern bathroom featuring a walk-in shower and vanity offering multi-generational living possibilities and ample entertainment spaces. Recent upgrades, completed approximately one year ago, include four new high-efficiency air conditioner units, a new dishwasher, new garbage disposal, new washer and dryer and piped gas lines for future tankless water heaters. The home is equipped with an ADT security system, water softener sytstem and outdoor WiFi coverage. Outside, enjoy a comfortably insulated attic room, a patio misting system and professionally maintained chimney and fireplace services. The beautiful pool has a new underwater light. Located near Freestone Park with abundant walking and biking paths. Don't miss the chance to own this rare Gilbert gem!
17667 E Cindercone Road Rio Verde, AZ 85263
$1,649,000
4
Beds
3.5
Baths
3,243
SqFt
Status
Active Under Contract
MLS #
6713753
Property Type
Single Family Residence
Price Type
--
Refined bespoke luxury, this 2022 built soft contemporary designed residence is perfectly located in one of the valley's most scenic locations in the world class Trilogy community. This highly coveted Orion floor plan with rare 4th Bedroom Option and luxurious appointments is simply exquisite. With 4 BEDROOMS, 4.5 bathrooms and DEN or office AND a FLEX/MEDIA ROOM including a luxurious primary suite, there's plenty of room for everyone in the family. You'll love the soaring ceilings, and a Chef's dream kitchen with a massive center island for entertaining, high-end THERMADOR appliances and custom cabinets. The striking open floor plan includes upgraded wood flooring, custom lighting and 15ft wall of glass opening to outdoor living perfect for quiet moments of reflection or joyful enterta ining, the resort-like south facing backyard rests along a tranquil NAOS area with stunning views of Four Peaks. An expansive covered patio includes an outdoor fireplace with oversized TV & barbeque, perfect for al fresco dining or entertaining. It is an ideal spot to relax, unwind, and soak up the natural beauty that surrounds you. Don't miss this opportunity to own a truly remarkable property in the prestigious Trilogy at Verde River.
3523 E Cashman Drive Phoenix, AZ 85050
$1,649,000
5
Beds
3.5
Baths
3,710
SqFt
Status
Active Under Contract
MLS #
6730295
Property Type
Single Family Residence
Price Type
--
This stunning two-story home in the highly sought-after Sky Crossing Community features a great room floor plan with 5 bedrooms, 3.5 baths plus office/den, and a resort-like pool. Nestled at 3523 E Cashman Drive, Phoenix, AZ 85050, home is 3,710 sq ft and sits on a 15,308 sq ft oversized corner lot, one of the largest in Sky Crossing. Feel right at home in the Chef's kitchen with upgraded stainless appliances, a gas cooktop, an oversized island with seating, quartz countertops, and beautiful wood-look plank tile flooring that flows elegantly throughout the home. Enjoy the expansive backyard with an outdoor Ramada area and a resort-like pool featuring a swim-up bar, two baja shelves, a spa and multiple water features. Feel comfortable and relaxed while creating many memories for years!
17427 E Desert Vista Trail Rio Verde, AZ 85263
$1,647,000
3
Beds
3.5
Baths
3,022
SqFt
Status
Active
MLS #
6772850
Property Type
Single Family Residence
Price Type
--
Nestled in the highly sought-after Trilogy at Verde River community, this luxurious Orion floorplan home offers an unparalleled lifestyle, with fully-owned solar panels and stunning mountain views. Boasting 3 bedrooms, an office, a den, and 3.5 bathrooms, this spacious residence is designed for both comfort and elegance. Enter through an upgraded iron front door to discover a seamless blend of style with plantation shutters, designer lighting, neutral wall tones, and wood grain tile. The gourmet kitchen is a chef's dream, featuring granite countertops, top-of-the-line Thermador appliances, a kitchen island with breakfast bar, and a spacious morning kitchen! The primary suite serves as a private retreat with a tiled soaking tub, separate shower, dual sinks, and a large walk-in closet, creating a serene space to unwind. Outdoors, the resort-style backyard is an entertainer's paradise, complete with a mature Sonoran landscape, a refreshing pool surrounded by travertine pavers, a custom firepit, and an expansive covered patio featuring a built-in BBQ area and sunshades. From every angle, the views are breathtaking. Plus there is an EV charger for added convenience. Don't miss your chance to own this remarkable home in Trilogy at Verde River, where luxury, comfort, and captivating mountain views await!The amenities at Verde River are World Class with Tom Lehman inspired eighteen-hole Golf course, tennis courts, pickleball courts, and bocce ball, heated lap pool and Resort style swimming pool, hot tub, Afterburn fitness center, Helen's demonstration Kitchen for cooking classes and a 7.5 acre dog park. The community center has casual poolside dining at Eddy's Diner and gourmet dining at award-winning Needle Rock Kitchen and Tap, Alvea Spa with full-service Salon and Spa amenities, Art Loft and events center. Trilogy at Verde River is adjacent to the Tonto National Forest and is situated in the middle of miles and miles of hiking and biking trails.
22015 N 59th Terrace Phoenix, AZ 85054
New
$1,645,000
4
Beds
4.5
Baths
3,505
SqFt
Status
Active
MLS #
6781344
Property Type
Single Family Residence
Price Type
--
Shea Homes' most popular plan at Emblem at Talinn. Premium lot across from park east facing backyard abutting natural open space, lush landscaping with artificial grass and quartz pavers. Custom PebbleTec pool with Baja deck, water feature & fire pots. Enjoy the sunrise & mountain views from the covered patio with electric fireplace. Inside is a large chef's kitchen with GE Monogram appliance package, coffee bar, walk-in pantry, spacious quartz island with breakfast bar. Dining area opens to the great room with soaring ceilings. Downstairs is a secondary primary ensuite bedroom & an office/den that could be converted to a bedroom. Upstairs is the primary bedroom with large bathroom & walk-in closet, laundry room, 2 guestrooms and large loft that could be converted to a bedroom. Wood shutters throughout, remote-controlled blinds in the family room and kitchen. 3-car garage with epoxied floor, EV charger for 2 vehicles, plus separate area plumbed for utility sink and outlet for additional refrigerator. Water softener, whole house filtration system and tankless, gas water heater. Home is Energy Star 3.0 rated and includes Shea Connect smart home feature. Community pool & rec center with exercise & billiard room, community parks & playgrounds, walking & bike paths. Close to shopping, restaurants & entertainment. See Features and Upgrades list for more details.
24005 N 45th Drive Glendale, AZ 85310
$1,645,000
4
Beds
3.5
Baths
3,425
SqFt
Status
Active
MLS #
6783573
Property Type
Single Family Residence
Price Type
--
Stunning custom residence on a 20,052 sq.ft lot, featuring incredible curb appeal, a delightful desert landscape, & a spacious 5-car tandem garage. As you enter this home, you are greeted with soaring high ceilings with exposed beams that perfectly complement the wood-look flooring throughout. The modern fireplace serves as the centerpiece of the living room. The living area to the outdoors has large multi-sliders that open up to the back patio! The gourmet kitchen boasts marble counters/backsplash, white cabinetry accented w/crown moulding, top-of-the-line SS appliances, a center island, & a peninsula w/a breakfast bar. The primary bedroom has a private access to the back patio, a walk-in closet, & a spa-like ensuite w/dual vanities. The backyard is an entertainer's dream! The diving pool is complete with a stone waterfall & slide. A beehive fireplace for family gatherings await or BBQ with the built-in BBQ. You cannot help but fall in love with this home. Come on over as this gem will not last and make sure you check out the upgrades listed in the document tab.
5925 N Via Serena -- Tucson, AZ 85750
$1,645,000
3
Beds
3
Baths
3,902
SqFt
Status
Active
MLS #
6784110
Property Type
Single Family Residence
Price Type
--
Discover unparalleled luxury and panoramic beauty in this remarkable contemporary estate. Perched on one of the highest lots in Cimarron Foothills Estates, this 3,902 sq. ft., 3-bedroom, 3-bath home is thoughtfully designed to maximize 360-degree views of mountains, city lights, and sunsets. Every corner of the home showcases expansive floor-to-ceiling windows, flooding the interior with natural light and framing the breathtaking landscape. Vaulted space accentuated by dramatic brick walls, knotty pine beams, and a dual-sided fireplace that lends warmth and ambiance to both the dining and living areas. The gourmet center island kitchen, outfitted with stainless steel appliances, granite counters, phenomenal views, and abundant storage, makes entertaining seamless. French doors throughout open to covered patios and decks, inviting the outdoors in and offering direct access to a beautifully landscaped yard. Seamless indoor/outdoor living. Outside, enjoy the heated pebble-tec pool, spa, and BBQ center nestled among beautifully landscaped 1.62 acres, with sitting areas strategically placed to soak in the spectacular views. Additional highlights include a private office, a versatile studio/workshop, and walk-in closets in every bedroom. Energy efficiency is ensured with an owned solar system, blending sustainability with this luxury property. Located within the highly sought-after Catalina Foothills School District, this exceptional home is more than just a residenceit's a lifestyle of elegance, privacy, and tranquility. Experience it in person and make this dream property your own!
8919 E Calle Del Palo Verde -- Scottsdale, AZ 85255
$1,644,000
3
Beds
3
Baths
2,891
SqFt
Status
Active
MLS #
6731379
Property Type
Single Family Residence
Price Type
--
Updated and well cared for home in a most desirable North Scottsdale GATED COMMUNITY. This home is ready to move in boasting it's Gourmet Kitchen with high end appliances . Manicured yard on quiet interior lot makes this home stand out! Better hurry as it is priced to sell AND SELLER WILLING TO FUND THE LENDER COST OF A 2/1 BUYDOWN!
37181 N 103rd Street Scottsdale, AZ 85262
$1,640,000
4
Beds
3.5
Baths
3,952
SqFt
Status
Active
MLS #
6659778
Property Type
Single Family Residence
Price Type
--
Located in the luxurious gated community of Cresta Norte, this 4 bedroom, 3.5 bathroom, 3 car garage Toll Brothers masterpiece is nestled in a private cul-de-sac with unobstructed views of Pinnacle Peak Mountain. Expansive courtyard with solid redwood doors leads to a dramatic entry. An entertainer's dream, this back yard contains an amazing 1200 sqft putting green, pool with cave waterfall, spa with glass fire pit, 2 covered patios, built in grill and countertop and a bar just steps inside the door. Inside, this split floor plan is ideal for any family or visitors alike. The master suite resides on one wing of the house bosting its own fireplace (1 of 3 in home), his and hers walk in closets, his and hers sinks, double shower, and jetted tub. The other wing has 3 large bedrooms all with en suite bathrooms. Amazing eat in kitchen with granite & stainless steel throughout and island. Bonus game room, custom wine cellar, amazing views, new AC units, tankless hot water heater. This property has been meticulously maintained by these second owners since 2007. Truly has it all.
7235 E Paradise Drive Scottsdale, AZ 85260
$1,640,000
5
Beds
3
Baths
3,881
SqFt
Status
Active
MLS #
6684806
Property Type
Single Family Residence
Price Type
--
This remodeled 5 BR 3 BA 3881 sq ft home on cul-de-sac lot w/expansive lawn, landscaping, N-S exposure. Liv.Rm w/12 ft ceilings, separate Din.Rm. Large MBR w/gas fireplace, sitting area, bath area w/sunken tub,sep.shower & huge walk-in closet. 3 addt'l Bdrms, hall bath. Guest suite/office w/fireplace, huge shower & pvt.entry anchors west side of home. Inviting Fam.Rm w/firepl (gas or wood), soaring wood beamed ceilings. Large eat-in kitchen w/counter seating,walk-in pantry,Wolf range,Miele dishwasher,LG smart refrigerator & Profile microwave. Laundry Rm w/storage closet, work counter, stacked smart LG W/D. Luxury vinyl plank waterproof flrs. Greg Trutza designed park like backyard; fenced 20x40 htd pool & spa,MLB regulation batting cage, Lawn & raised garden beds w/separate irrigation. All of the improvements and upgrades in this totally remodeled home were completed in 2022-2023 and include: New roof and underlay - 2021 New luxury vinyl plank flooring through entire house - 2022 designated for industrial use that have the advantages of being waterproof, quiet and soft under foot. New baseboards through entire house - 2022 New doors and hardware through entire house - 2022 New switches and outlets through entire house - 2022 New LED ceiling lights through entire house - 2022 New grates and vents through entire house - 2022 New light fixtures inside and outside entire house - 2024 Entire home interior and garage painted 2022-2023 ENTRY WAY: New shatterproof glass installed next to front door Slate installed outside front door at entry way KITCHEN: New cabinets and hardware Newer sink Newer faucet with spray Newer Wolf oven (never used) Newer LG smart refrigerator with convertible middle drawer and custom ice cube feature Miele dishwasher with third cutlery rack and crystal/china cycle Newer GE microwave with high power vent Newer sliding glass doors Newer granite countertops Newer slate patio off of kitchen Built in gas grill on patio LAUNDRY ROOM: New cabinets New granite countertop New sink New smart faucet with spray New fan vent New LG smart stacked washer/dryer 5th BEDROOM/OFFICE SUITE with FULL BATHROOM & PRIVATE ENTRANCE: New fireplace tile surround Newer cabinet in bathroom Newer sink and faucet in bathroom Newer quartz countertop Newer shower doors Newer wall and floor tile in shower Newer shower head in oversized shower Newer bathroom hardware Newer Toto toilet MASTER BEDROOM: Newer fireplace surround Newer slate patio off master bedroom through sliding glass door MASTER BATHROOM: Newer mirror with tile border Newer cabinets Newer Kohler sinks Newer faucets Newer quartz countertop New tile bathtub Newer shower doors Newer bath faucet Newer shower tile Newer shower fixture Newer Toto toilet Newer bathroom fan Newer shatterproof glass window in shower area Newer bathroom hardware Newer built in ironing board in closet Huge/Oversized walk-in Closet HALL BATHROOM: Newer mirror with tile surround Newer cabinet Newer quartz countertop Newer Kohler sinks Newer faucets Newer bathroom hardware Newer Toto toilet Newer bathroom fan Newer Kohler heat retaining bathtub Newer tile in shower Newer shower head Tankless hot water heater for master and hall bath - 2022 Hot water heater - kitchen, laundry room and guest bath Newer water softener Outdoors: All block walls repaired, sealed and painted. Irrigation system checked with all new drip lines and emitters installed, all new lawn heads installed, by irrigation company Grass - plug aerated in 2022 (watering costs run between $150-$300 on average depending on the season). Newer pool water clock installed, remaining two clocks checked by irrigation company Swimming pool/Spa - all work completed in 2023 Pebbletec with LED Lighting Swimming pool is 20'x40' could be suitable for diving. There is also a large play step in the shallow end for relaxing or for young children. Pool is completely fenced with two decorative gates that can be locked. Pool Upgrades include: Newer interior tile border Newer in floor cleaning system Newer Pebble Tec interior (pool & Spa) Newer LED lights Cool deck resurfaced Newer pool heater Pool raised planter area resurfaced and sealed Backyard - large and park like area Large raised garden beds with separate irrigation. Three connected beds suitable for large vegetable, flower and herb gardens. Four carefully chosen citrus trees: prolific Lisbon lemon, blood orange, Minneola tangelo and Arizona sweet. Fig tree Large grassy space suitable for soccer, volleyball, badminton, croquet, informal baseball game. MLB regulation batting cage with new LED night lights - can also be used to practice your golf swing. There is additional room for a putting green, sports court, built in play sets, guest house/second office, gazebo, outdoor kitchen. You are limited only by your imagination in the ways that you can enjoy this spacious backyard. Garage: Complete wall of new storage cabinets There is extra roof covering material and luxury vinyl planks for changes, add-ons you may choose to do.
8901 N 87th Court Scottsdale, AZ 85258
$1,639,000
4
Beds
3
Baths
2,706
SqFt
Status
Active
MLS #
6754801
Property Type
Single Family Residence
Price Type
--
Welcome Home to this Gorgeous Fully Remodeled Modern 4 Bdrm, 3 Bath Home w Great Room, Living Room, Formal Dining, Chef's Kitchen w/ Decton Countertops, Diving Pool, Putting Green, and Custom Features all on a Cul-de-Sac Lot! The home underwent a full remodel in 2020 including windows and roof replacement and owners continued remodel by adding a 3rd bathroom. The 4th bedroom or in-law quarters comes complete with a private entrance and is perfect for extended family and guests. Spend countless hours entertaining in the amazing backyard with the 10 foot deep pool, 20X40 covered ramada and golf putting green. This home combines luxury and practicality, making it the perfect choice for any buyer seeking comfort, style and outdoor living at it's finest all in the school district w the 3 Cs