What You Need to Know About Financing with an FHA Mortgage Loan in Arizona

Many residents of Arizona are realizing the overwhelming benefits that can come with financing a home mortgage using an FHA mortgage loan. Just some of these advantages include lower down payments, small closing costs, cost-effective mortgage insurance, and virtually no requirements on your credit score. Many find that for several years following a bankruptcy or home foreclosure, they’re unable to get traditional mortgage financing for a home. However, it only takes two to three years following a bankruptcy or foreclosure to qualify for financing with an FHA loan.

FHA loans are not provided by the government, but rather are insured by the government. The FHA guarantees that a home mortgage loan won’t default if the borrower is unable to continue making payments. This insurance dramatically reduces the risk that lenders face when advancing a mortgage loan. Because of this reason and others, the down payment on an FHA loan requires a certain percentage of your total loan down. Typical mortgage loans can require up to 20% down, but with FHA there is some leniancy, you should contact a loan specialist to find out the exact amount required as a down payment. The great news is that right now several large benefits are offered by the government to make it easier to get in to a home! When you’re buying a home for potentially hundreds of thousands of dollars, you can experience major savings financing with an FHA mortgage loan.

One of the most common reasons why so many people are unable to become homebuyers has to do with their credit score. Virtually every traditional mortgage loan requires that a potential homeowner have a decent credit score before they can qualify to buy a house. This makes sense, of course, but it can be very discouraging for those who, though they’ve been through rough water financially, are working to create a better credit score. This process can take time, and being unable to finance a home for your family and to help your credit score rise further can be frustrating. Luckily, with an FHA loan, your credit score doesn’t have to be perfect. In fact, most of the time there are no credit requirements at all to consider in qualifying for an FHA loan.

Although there are typically no credit score requirements to consider when applying for an FHA loan, there is still the typically debt-to-income ratio to consider. Although having proportionately balanced levels of debt and income is ideal when qualifying for any type of financing, FHA loans are more relaxed in debt-to-income ratio requirements than regular mortgage loans. So although the ratio is still important, again, you don’t have to have perfect financial standing in order to finance using an Arizona FHA loan.

If you already own a home and would like to experience the benefits that have just been described, it isn’t difficult to refinance with an FHA mortgage loan. It is even possible in certain cases to refinance two separate mortgage loans into one FHA mortgage loan. Since these loans are regulated by a government agency, it’s only possible to finance with one of these loans at a time. For secondary residences and such, you will either have to go with a traditional mortgage loan or an investment loan.

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