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First Time Home Buyer in ArizonaIf you are looking to buy your 1st home, you've come to
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Today’s Rates for First Time Homebuyers in Arizona

Monday, April 15, 2024

Mortgage rates are at 3.00% for the 30 year fixed loan program and at 2.56% for the 15 year fixed. As for variable rates, the 5/1 ARM rate currently stands at 4.56%. Check out FHA and VA rates as well if you are doing low or no down payments.

Arizona First Time Home Buyer Checklist

  1. Consider your loan program options. If you're moving to an eligible area, you may qualify for a zero down payment loan through USDA. Veterans may be eligible for VA loans, which do not require cash down. 
  2. Know your credit score. Ideally, your credit should fall well above 600, but some lenders accept scores in the high 500s. If your credit score needs help, work on improving it before you try to take out a mortgage. Once per year, you're able to request a report from the three major credit bureaus free of charge. 
  3. Weigh interest rates from different lenders in your locale of Arizona. Choose one who not only provides a great offer, but is responsive and carries a high rating from the Better Business Bureau.
  4. Get pre-approved. Once you've decided on a lender, provide proof of income with your last two pay stubs and tax returns from the past two years. 
  5. Determine a budget. You could be pre-approved for a loan amount that is bigger than you had anticipated, but do not base affordability on the sum provided. Remember - pre-approvals are not guaranteed, and only you know what you can truly afford. 
  6. Begin home shopping. Be sure to avoid making extravagant purchases, taking out new installment loans, or anything else that could weaken your financial standing. Lenders will check your accounts again before closing your loan.  

Low Down Payment Loans Through FHA

If you’re a first time home buyer without a lot to put down, an Arizona FHA loan may accommodate you. FHA loans are backed by the government and designed to help home buyers with limited upfront funds receive financing.

  • Down payment: 3.5%
  • Minimum acceptable credit score: 580 (varies)
  • Mortgage insurance: Upfront (1.75% loan amount) and monthly
  • Property guidelines apply and are verified via home inspection

You can find additional information about FHA loans on the Arizona page of the FHA website.

No Down Payment Loans Through USDA

The United States Department of Agriculture backs home loans for zero down to Arizona home buyers looking to move to or live in rural areas. Find out if your buying city is eligible by searching the USDA's property map. Note that popular areas such as Tucson, Scottsdale, and Phoenix are not eligible. 

  • Down payment: None required; financing up to 102% available depending on home appraisal
  • Minimum acceptable credit score: 620
  • Mortgage insurance: Upfront (2% loan amount) and monthly
  • Income maximums apply 

Arizona Grant and Assistance Programs

The Arizona Department of Housing offers the HOME PLUS loan option to first time home buyers, including a 30 year fixed-rate mortgage and down payment assistance of up to 4% the loan amount. The 4% is a grant and need not be paid back. Participants must complete a home buyer education course, and income and property price restrictions apply.

Because the HOME PLUS mortgage can be facilitated via government-backed or non-government-backed agencies, minimum credit and debt requirements vary. Credit standards on all government (FHA, VA, USDA) mortgages are lenient at 640. Manufactured homes meeting minimum FHA standards are eligible, but the credit requirement is higher at 660. Non-government loans have a minimum credit requirement of 680. 

Also offered is the Mortgage Credit Certificate (MCC) program, which is not a mortgage loan but can be used in conjunction with many types of financing. This tax credit reduces participant federal withholding, so more cash is freed up from each pay check to go toward a monthly payment. Savings through the MCC tax credit program can total up to $2,000 per year. There are no location restrictions so popular cities like Tucson, Phoenix, and Scottsdale are eligible. 

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user suit Lenders in: Arizona.

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