Are you considering buying a home in Arizona? Financing a home can be a major challenge especially for first time home buyers. If you have finally settled on buying a house in Arizona, congratulations! In this post, I would like to keep you in the know regarding the different Arizona home buying programs. Therefore, no more guessing when finding best Arizona home buying programs. Let us get started.
1. Conventional home mortgage Arizona
If you have a steady income and a good credit score, you qualify for a conventional loan. A conventional mortgage is available at a fixed interest rate or adjustable interest rate. This home buying program comes with a loan terms of 30 or 15 years, depending on the mortgage lender you are working with. For example, at Sun American Mortgage a conventional mortgage offers a term of 25, 20 or 10 years.
Before applying for the conventional home mortgage, consider that the home buying program requires a high down payment. This is usually between 5% and 20%. Luckily, first time home buyers can enjoy as low as a 3% down payment if they choose Sun American Mortgage.
The conventional loan comes with no private mortgage insurance if you pay a 20% down payment. In certain situations, the mortgage lender offers to pay closing costs and fees. Another advantage of choosing the conventional mortgage is the quicker closing compared to the alternative home buying programs in Arizona.
In a nutshell:
- Conventional home mortgages tend to have a cheaper mortgage insurance
- The mortgage insurance is required when the down payment is below 20%
- Conventional mortgage is ideal if you have more savings to pay a down payment and a credit rating is high
- Talk to your loans officer for better loan rates and faster closing
Therefore, you are now in the know regarding conventional home mortgage. Let us review alternative Arizona Home Buying Programs
2. The FHA home loans
If credit score and down payment are keeping you from applying for the conventional home loan, do not give up on buying a home in Arizona yet. The FHA home mortgage could be your best alternative!
The FHA home mortgage is probably the most popular among the other Arizona home buying programs. It is a Government-backed home loan available to Arizona home buyers.
The FHA home loan features a low down payment and it is offered by qualified mortgage lenders in Arizona.
The FHA loan requires just 3.5% down payment, and it is available to borrowers with a credit score as low as 580 minimum. Therefore, if you are planning to buy a home in Arizona but your credit score is not good enough to secure a conventional bank loan, consider the FHA.
As a Government-backed home mortgage, it means that the average FHA interest rate is lower compared to the interest rate paid on the conventional loan.
- The FHA loans are easier to qualify for if you have less than perfect credit score
- FHA home loans feature a low down payment
- Borrowers enjoy a lower interest rate compared to normal home loan
- With the Government backed home loan, the borrowers can avoid foreclosure
- The FHA approved lenders can offer different loan terms
Therefore, check with your preferred mortgage lender whether you qualify for the Federal Housing Administration backed loan.
3. The USDA Home Loan
Are you buying a home in Arizona rural areas? The USDA home mortgage could be a perfect option for you. The USDA home loan is one of the Arizona home buying programs enabling homebuyers to purchase a property at 0% down!
USDA loan is backed by the United States Department of agriculture. The original concept is to finance home buying within selected rural areas, hence encouraging developments in such areas. Ideally, the USDA home loan is offered to the home buyers in the less industrialized areas.
The USDA home loan works similarly to the other Government backed Arizona home buying programs. The home buyer should work with the USDA approved lender. Before applying for the USDA home mortgage, check out the USDA map. This is to find if the property you intend to purchase is within the selected rural areas.
4. The VA Home loan
The VA home loan is backed by the United States Department of Veteran Affairs. The VA loans are designed to help active military of the veterans buying a home in Arizona. The no down payment home mortgage requires no mortgage insurance and allows the borrower a more flexible repayment plan compared to other Arizona home buying programs. The VA loan is ideal for borrowers with a low credit score, as the score can go as low as 580.
The Jumbo Loans
If you are looking to upgrade to a luxury home of your dreams, the jumbo loan is designed to help you. The Jumbo loan is a mortgage that exceeds the conforming loan limits as imposed by Fannie Mae and Freddie Mac.
Therefore, the Jumbo loan allows the borrower to buy a high priced home in Arizona. The one loan mortgage eliminates the need for taking two loans when buying a house in Arizona. Therefore, it is a good option if planning to buy a luxury home in Arizona.
At this point, you already know the different home loans available in the market. Therefore, you are in a position to choose the best Arizona home buying program that suits your requirements.