If there’s one thing the housing market has a surplus of, it’s rumors and myths. Buying a home is an undeniably complicated process. And if you haven’t done it before, you may be relying on what your friends, family, and the internet tells you about when to buy and the kind of mortgage you qualify for. FHA loans in Arizona are a popular mortgage product for first-time homeowners. They don’t have the same stringent requirements as typical mortgages, but they’re shrouded in mythology and rumor. We’re debunking the top myths about FHA loans in Arizona.
You need 20 percent of the home’s cost as a down payment with an FHA.
Traditional mortgages require purchasers to put 20 percent down, but FHA loans will accept as little as 3.5 percent. That said, the more you can pay as part of the down payment, the less interest you’ll pay in the long run. In general, 15 percent is the recommended minimum for a down payment, regardless of the mortgage product you’re using.
But for many first-time homeowners, that’s a substantial amount of cash that you don’t have on hand.
$66,000 is 20 percent down on a $330,000 home.
$11,550 is 3.5 percent down on the same property.
One of the major benefits of the FHA loan in Arizona is that it empowers first-time homebuyers without substantial cash to purchase their first home. It also allows buyers to use cash gifts from friends and relatives as the down payment, which other mortgage products don’t.
An FHA loan only allows you to purchase a single-family home.
Many people believe that because of the benefits of the FHA loans in Arizona, they have to be more restrictive with the properties they allow you to purchase. But this is just a myth! If you’re looking at non-traditional homeownership, the FHA allows you to buy a variety of property types:
Properties with one to four units.
You can use an FHA loan if you’re purchasing any of these types of property.
Even with a lower down payment, you still have to pay substantial closing costs.
Closing costs are often discussed because they’re a considerable expense to buying a house that your mortgage can’t cover. They typically add up to thousands of dollars: sometimes as much as $12,000 for a $330,000 home in some areas of the country. Closing costs include:
Loan application and underwriting fees
Home inspections and appraisals
Escrow fees, surveys, and attorney fees.
An FHA-lender may negotiate your closing costs, so they’re not as significant as an out-of-pocket expense. On average, in Arizona, homebuyers can expect to pay a few thousand dollars in closing costs.
The FHA loan application is universal, so working with any lender is the same.
When you’re shopping for mortgages, it doesn’t take long to feel overwhelmed by the process and assume all lenders are the same. However, every lender can exercise their discretion regarding who they approve for FHA loans. Some lenders won’t consider applicants with a lower credit score, while others will.
When you’re shopping for an FHA loan in Arizona, it’s critical to work with a knowledgeable mortgage broker. They’ll find the best lender for your application and advocate on your behalf, so the application process is painless as possible.
Get in touch with the experienced brokers at Atlas Crown Mortgage about FHA loans in Arizona.
Buying a home is stressful, but with 25 years of experience in the mortgage industry, Atlas Crown Mortgage makes the loan process fast, cost-effective, and pain-free. We understand how the industry works and use our decades of knowledge to help our clients get the best deal on their mortgages.
Get in touch with our experienced mortgage brokers to learn more about getting an FHA loan today.