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What Type of Home Loans Are Available in Phoenix Arizona

Phoenix Home Loans

What Type of Home Loans Are Available To You

The decision to buy a home is a big one, oftentimes it’ll affect you the rest of your life. Many first-time home buyers don’t know where to start. Understanding the different types of home loans available to you can give you the vital information that you need in order to make an informed decision. It’s also important to understand the pros and cons of each type of loan. As you move get ready to become a homeowner, working closely with an experienced loan officer in Phoenix Arizona can help make the process as stress-free as possible. It’s important to consider your options and look at the fine details to make sure you are making the right decision on your home loan.

Fixed vs. Adjustable Loan Types

One of the first steps to getting the best mortgage for your needs is picking between a fixed-rate or adjustable rate loan. The differences between the two types of loans are as follows:

Fixed-rate mortgages are loans that have the same exact interest rate for the life of the loan. This basically means that because your rate doesn’t change, the monthly loan payment will never change, even for long-term financing such as 30-year fixed rate loans.

Adjustable rate mortgages are a type of home loan that has an interest rate that can change throughout the life of the loan. Many of these types of mortgages will change every year after experiencing an initial period of the remaining fixed rate loan balance. This is where the hybrid effect kicks in. A hybrid adjustable rate mortgage begins with a fixed-rate interest rate, before switching to an adjustable interest rate.

Pros and Cons of Fixed & Adjustable Rate Loans

Like every loan, it’s important that you understand the pros and cons so that you can make an informed decision. Adjustable rate mortgages typically start with a lower interest rate than a fixed loan, but the adjustment period is a con. Keeping this in mind, know that your mortgage rates can change year to year, often raising as the life of the loan carries on. The best part of fixed rate loans is that your interest rate and monthly payment stays the same over the entire period of the loan. With this stability comes higher interest rates though.

Conventional Loans vs Government Insured

Once you have figured out whether you want a fixed or adjustable rate mortgage, you then need to figure out whether you prefer a conventional or government insured home loan (FHA or VA).

A conventional loan is not insured or guaranteed by the government. Conventional loans offer a 3% down option and don’t require a perfect credit score to become eligible. below are the three types of government insured loans available:

FHA Loans: The Federal Housing Administration harbors a mortgage insurance program that is directly managed by the department of housing and Urban Development or HUD. HUD is an arm of the federal government making the loan process different. FHA loans are available to everyone, not just for first time home buyers. The advantage that most people like about FHA loans is the smaller down payment, often as low as 3.5% of the overall purchase price.

A con to an FHA loan is that all home buyers will be required to purchase mortgage insurance, which increases monthly payments. To learn more about this type of loan, be sure to check out the HUD website.

VA Loans

Those who have served in the military and their families can qualify for a VA Loan. Different than an FHA loan, a portion of your loan is guaranteed by the VA. If the loan defaults, the VA pays the bank their losses up to 25% of the loan. The largest advantage of a VA loan is that borrowers can receive up to 100%. This is only available up to the conforming loan limit that is currently $417,000.

If you are looking to buy a house then you will want a qualified loan officer familiar with the Phoenix Market by your side. The Justin Haines Team has years of experience and has helped clients with all types of backgrounds and credit scores. Check out their website and get pre-approved for one of the home loan programs currently available to you.

Home Plus & Down Payment Assistance To Help Phoenix Home Buyers

Home Plus Loan Program Arizona

Home Plus program works to assist qualified buyers in Phoenix, Arizona.

With the economy continuing to recover, the government has been rolling out programs to assist qualified buyers who wish to purchase homes. One such program, available to buyers in Phoenix and throughout Arizona (excepting Pima County), is the Home Plus program. This HUD program works in conjunction with the Down Payment Assistance program to make buying a home easier and less financially burdensome. If you’re looking into purchasing a home in Arizona, read on to discover what this program entails and who qualifies.

Home Plus Advantages

The Home Plus program offers a 30-year fixed-rate mortgage in conjunction with down payment assistance (DPA). The DPA itself is allocated in the form of a grant and as such does not need to be repaid by the mortgage borrower. These funds can be used toward the down payment and closing costs but only when paired with a Home Plus loan. Borrowers using the program can expect up to a 4% grant based on the principal of the loan, with U.S. military personnel eligible for an additional 1%. The major benefit of the Home Plus program is the fixed-rate mortgage, which protects borrowers from elements of the predatory lending practices associated with the housing crisis, such as ballooning payments.

Qualifying

In order to qualify for the Home Plus program, borrowers must work through an ADOH approved and participating mortgage lender. The total income of all borrower must be than $92, 984 with the purchased property valued at less than $371,936. Once purchased, the owner does need to occupy the property as a primary residence, but the property itself can be a single-family home, condo, or town home. Although this criteria forms the bare bones of the program, there are still standard loan requirements which the borrower must meet, similar to those of a standard loan. These standards include a credit score of 640 or higher and a 45% debt-to-income ratio. As mentioned, the mortgage must be backed by Fannie Mae or Freddie Mac, but there is an exception made for loans obtained by U.S. military personnel.

Regardless of the lender they will act on behalf of the buyer, guiding them through the process of obtaining the mortgage and registering for the DPA grant.

Getting Started

In all cases, buyers can expect their mortgage company to act on their behalf, guiding them through the mortgage process and registering them for the DPA grant which accompanies it. Prior to the actual purchase, home buyers are required to take a home buyer education course offered buy a HUD-approved provider. Conveniently, these courses can be taken in-person, online, or even over the phone. Buyers can get more information via this PDF issued by the Arizona Housing Finance Authority or by visiting and applying via the Arizona Department of Housing website. These programs, which work hand in hand to assist buyers throughout Arizona (except Pima County), are a great way to get into one of the most exciting housing markets in the country.

If you want to get qualified for the Home Plus program the Justin Haines Team has the experience and staff to get the job done. If you visit www.TheJustinHainesTeam.com and fill out the short form you will be contacted by someone form the team to get you pre-approved for this program.