Are you a first-time homebuyer in Phoenix, AZ? If so, then you may qualify for an FHA loan provided by the Federal Housing Administration. An FHA home loan in Phoenix, AZ is backed by the government, which means that lenders perceive you as less of a risk. As a result, you will have an easier time finding a loan, and you will be able to enjoy more favorable terms.
You may even be able to qualify for an excellent loan on your dream home without perfect credit.
What Are the Benefits of an FHA Loan in Phoenix?
If you qualify for a first time home buyer loan in Arizona through the FHA, you will be able to enjoy the following benefits:
- A down payment as low as 3.5%. Contrast this with the 20% down payment which many lenders expect experienced homebuyers to make.
- Lower closing costs. This can significantly reduce the overall cost of a home in Phoenix.
- Qualify for a loan which might otherwise be unavailable to you because of your credit score.
- If you are a senior who owns your home outright or currently has a low balance on your mortgage, you can apply for an FHA Reverse Mortgage to convert some of your equity into usable cash.
- If you are interested in upgrading your home to make it more energy-efficient, you might qualify for an FHA Energy-Efficient Mortgage.
- Interested in a mobile or manufactured home? These are available through FHA loans as well.
Are You Eligible for a Phoenix, AZ FHA Loan?
Currently, these are the basic eligibility requirements to qualify for an FHA loan in Phoenix:
- FHA loans are intended for first-time homebuyers.
- For a down payment of 3.5%, you need a FICO score of 580 or higher. If your FICO score is lower than 580, you may still qualify, but with a higher down payment.
- There are no strict income thresholds, but you do need to make enough to pay for your existing debts and bills while accommodating the new mortgage. Your debt-to-income ratio should not be higher than 43%.
- You must be purchasing a qualifying 1-4 unit property.