Trying to figure out how to qualify for a home loan in Phoenix, Arizona? Here in the “Valley of the Sun,” we have a booming job market, affordable costs of living, a bustling downtown, and of course incredible weather.
This is a wonderful place to spend a few years or to settle down and start growing roots as a family.
But before you start applying for mortgages, it is important to know whether you are likely to qualify.
You probably have a lot of questions here. “Do I qualify for a mortgage with poor credit? Do I qualify for a mortgage with low income? What if I cannot afford the down payment?”
The problem is that if you just start applying for mortgages to try and find out what you qualify for, banks and lenders are going to send out “hard inquiries” on your credit. Ironically, these can actually dent your credit score, making it less likely you will qualify for a home loan or other types of loans or credit in the future.
So, the better you understand your financial situation and what you might qualify for in advance, the more targeted your applications can be.
This will protect your credit and make it more likely that you will get a mortgage.
Loan qualifications vary from one lender to the next. They also can vary depending on the type of loan (conventional vs. jumbo for example).
Home Loan Qualification Requirements in Phoenix:
But in general, you can expect to need to meet the following home loan qualification requirements in Phoenix:
- Most home loans require a down payment between 10-20%. Some jumbo loans may require as much as 30%.
- You need to have reasonably good credit (580 or higher). In some cases, you may be able to qualify with less however. For jumbo loans, you may need a higher score (700 or above).
- Your income-to-debt ratio needs to be acceptable (usually no more than 43-45%).
There are some exceptions. If for example you are a first-time homebuyer, you might qualify for a Phoenix FHA loan. This would qualify you for a loan with a down payment of just 3.5%. FHA loans also are looser when it comes to credit requirements. So, if you have lower credit, this might be an option for you.