FHA loans in Arizona are VERY popular and one of the financing choices you’ll come across when purchasing a home. Conventional mortgages are a common loan type as well, but FHA loans are easier to obtain, available with a low down payment and are supported by the Federal Housing Administration (FHA).
WHAT IS AN FHA MORTGAGE?
Mortgages that have the Federal Housing Administration’s backing are known as FHA loans. When you need to make a smaller down payment or are repairing your credit and looking to obtain a FHA loan in Arizona, these mortgage loans may be a good fit for your needs. Ultimately, there is more leniency on qualifications for this type of loan product.
There are fixed-rate and variable-rate FHA home loans available. For the duration of the repayment period, the interest rate on a fixed-rate mortgage remains constant.
Variable-rate mortgages have an initial fixed interest rate that gradually increases. It is up to the borrowers to select a repayment schedule that works for them.
HOW DO FHA LOANS WORK?
While FHA loans in Arizona are not the same as traditional home loans, they are very similar to other types of loans. You select a loan with an adjustable or fixed interest rate based on your circumstances, and you can pay it back over a period of 15 to 30 years. Similar to a conventional mortgage, you also have to pay closing costs.
WHY IS THERE MORTGAGE INSURANCE?
A key component to an FHA loan is that borrowers will pay mortgage insurance in addition to their monthly mortgage payments. Borrowers are required to pay an annual mortgage insurance premium (MIP). Its purpose is to protect the asset In the event that the borrower fails on the mortgage, the insurance shields the lender.
ARE THERE LOAN LIMITS?
The maximum loan amount that an FHA loan in Arizona will cover varies by county and is based on the type and price of the homes there. It is helpful to check the FHA website prior to applying for a mortgage because it updates these restrictions once a year. For FHA loans in Arizona we’re happy to help give you the accurate information for your county!
IS THERE ANY PROPERTY REQUIREMENTS?
Properties must comply with local construction codes and other HUD-mandated safety and quality standards to be eligible for financing from the FHA. An appraisal is required and the property’s worth must be within the maximum purchase price limits. Most importantly, this home must also be the borrower’s primary residence.
GET YOUR FHA HOME FINANCING TODAY!
FHA loans in Arizona are accessible and have more favorable financing terms and less stringent eligibility restrictions. As we all know, an FHA mortgage is a long-term commitment, just like any other home loan, so it’s helpful to know what you’re getting into and that’s where your local home lender can help you to get across the finish line.
Understanding the application, documents required, understanding the approval processes and timelines are so important. Mohave Mortgage is here with you every step of the way for FHA loans in Arizona. Get to know our team better on our about page here.
