Arizona Home Loans: Choosing the Right Loan Product
Arizona home loans are in high demand as interest rates are dropping and housing inventory is increasing. A mortgage broker can help you choose the best loan for your financial situation and make your homeownership dreams come true.
The real estate market in Arizona is booming. With gorgeous spring temperatures, and plenty of ways to beat the summer heat, it is easy to see why. Arizona has a lot to offer to individuals and families. Whether you are moving to the Grand Canyon State for work, the weather, or for all the family friendly activities and destinations, there is something in Arizona for everyone.
If you have bad credit, you may think that a move into or around Arizona is impossible. You may think that Arizona home loans
for bad credit don’t exist. This has been a widespread and false rumor since the housing crisis of 2008. Many people believe that it is impossible to get a home loan without perfect credit. In a way, this has become a self-fulfilling prophesy because many individuals and families with bad credit won’t even apply for a loan for fear they will just be turned down by the bank. However, there are many programs in Arizona that can help sub-prime borrowers meet eligibility requirements for home loans.
Types of Arizona Home Loans
The most common type of Arizona home loans
is a traditional mortgage. Most people with bad credit automatically assume they cannot qualify for this type of loan. While a traditional mortgage does have the most stringent credit requirements, they are not as high as many people believe. If you have a score of at least 650 you have a chance to qualify for a traditional loan. A traditional loan is a fixed 15 to 30 year loan with payments that will remain roughly the same for the entire loan term. Payments may fluctuate slightly based on property tax amounts but they principal and interest will remain the same. In order to qualify for a traditional loan you will need to put between 5 and 20 percent of the loan amount down.
If your credit score is less than 650, you can still find Arizona home loan
that you can qualify for. One of the main types of loans that can help sub-prime borrowers is an FHA loan. An FHA loan is a loan that is secured by the federal government. You will pay a fixed rate for principal and interest for a 15 to 30 year loan term. You will also pay mortgage insurance in the amount of 80 to 200 dollars each month, depending on the amount of your loan. You can qualify for an FHA loan with a credit score as low as 500 as long as you have between 3.5 and 10 percent of the loan value to put down.
If you find that you cannot qualify for a traditional loan or an FHA loan, there are some less common programs that may be able to help you buy a home in Arizona. One is a rent to own program. When you rent to own, you pay rent that for the first 18-24 months goes towards making a down payment on the home. Your rent payments will be higher than if you were just renting the home but you will be making progress towards owning it. Another way to purchase a home with bad credit is with seller financing. This is most common if the seller owns the home outright or owes a very small amount left on the mortgage. The seller carries the debt for you and you make monthly payments, including interest to the seller. Often you will need to put a large chunk down so that they seller is assured that you have a vested interest in paying the loan in full by the agreed upon time period. Finally, you may also want to have a family member with higher credit cosign for you. This will help you get a loan and be on track to rebuilding your credit. However, be aware that any late payments will also affect the credit of your cosigner.
Regardless of which loan product you choose, an Arizona mortgage broker can help you reap the benefits of Arizona home loans.
An aggressive broker is key when securing a home loan with bad credit. A licensed broker can negotiate with various lenders to help get them to see you as more than a credit score. In fact, many people who have gotten home loans with bad credit claim that they owe their success to a broker who was working for them. Call a broker today to start the process of owning your own home. You will be glad you did.
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