Arizona FHA Loans, Tips, and Info

At Arizona Wholesale Mortgage Inc., we love Arizona FHA loans. They allow us to help worthy families who might not otherwise meet requirements for Conventional loans. Arizona FHA loans currently are particularly beneficial to those buyers with less cash in the bank.

Secondly, the mortgage rates on Arizona FHA loans are generally right in line with Conventional mortgage rates if not cheaper.

This means that FHA mortgage rates are often as just as good (and always very close) to the best Conventional loan rates for borrowers with a large down payment.

What is an FHA loan?

It is a loan that the Federal Housing Administration insures. FHA does not actually loan or provide mortgage funding to the borrowers. Instead, FHA provides insurance to the mortgage loan provider. FHA stands behind or guarantees your loan. Furthermore, loan limits vary depending on where you live in each state and your county.

If the borrower defaults on their FHA mortgage (foreclose), the Federal Housing Administration would cover most House Key or all of the losses that the lender would incur.house_key-150x150

This makes banks much more willing to lend FHA-guaranteed money. The bank’s risk is extremely minimized.

This is also why the FHA loan is so popular among first time home buyers. Oftentimes, first time home buyers do not have the down payment that is required for a typical Conventional loan. However, it is a myth that the FHA mortgage is a “first time home buyer’s program.”

information8 You do not need to be a first time home buyer to qualify for an FHA mortgage.

In fact, many of our clients who have their choice of multiple loan options ultimately end up with an FHA loan, simply because the qualification process is easier and the loan limits are large enough to buy almost any home for sale in Phoenix at this time.

Furthermore, it is generally easier to qualify for an FHA loan than it is for a Conventional mortgage. The Federal Housing Administration is willing to stand behind your loan and insure the bank’s interest. We’re proud to be Americans!

Almost anyone can secure an FHA mortgage.

The FHA loan is a government loan put in place to help people buy homes. Most of the rules are common sense, but we thought we would list them anyway.

thumbs_down 1.) You cannot use an FHA loan to buy an investment property or a second home. The idea that our government will spend tax dollars to help people buy vacation homes in Miami Beach seems like an odd one, but this question still comes up occasionally.

2.) You cannot take out an FHA loan if you have unpaid judgments on your credit report, haven’t paid your income taxes, or have defaulted on your student loans. If you have not filed a tax return in ten years, you will not be able to get a loan from the Federal Housing Administration.

3.) FHA loans  require “full documentation”. This means that you have to prove your earnings with pay check stubs and tax returns. You will also need to provide bank statements.  If you work under the table, are self-employed and you hide most of your income, then you will not qualify. You must pay taxes if you want to get help from a taxpayer-paid program.

thumbs_up * Your credit score can be as as low as 580. The national average credit score is 625.

If you do not have any credit at all, we can still qualify you for a loan. We can use alternative examples of your good payment history. For example, we can get a letter from your landlord stating that you have paid your rent on time for the past 12 months.

We can also use utility bills. Many utility companies, including SRP here in Arizona, allow you to log in to their website and download a utility reference letter that is generated for your particular account. It is so common for first time home buyers to request a letter of reference from their utility company, that the utility companies have automated the process!

  • Closing costs can be financed on an Arizona FHA loan if there is enough rebate on the interest rate to cover your costs.   This means that you can come to the closing table with less cash. However, on the flip side this means your interest rate is going to be higher.
  • They the FHA loan have a more flexible underwriting system than Conventional loans.
  • The Federal Housing Administration limits the amount lenders can charge for some closing cost fee
We can’t think of any disadvantages at this time.

fha-approved-lender-seal-150x150 Here are some more links, should you have any questions that we did not answer already.

 

Read about the FHA program on Wikipedia here.

Read the latest FHA News from Google.

The Federal Highway Administration (FHA) is another government entity with the initials FHA, but please do not call them about your home loan needs. They get cranky. Same advice goes for the Florida Hospital Administration at FHA.org.