Before you start looking at homes the MOST important part of the process is knowing what you can afford and which loan program is best for you.  We specialize in negotiating you the right deal on a home and stay out of the lending arena but work with several preferred lenders to help you get the process started.

Below are a few of the different loan types available and why it is so important that you speak with a lender and get pre-qualified.

Be Prepared and Gather Your Documents

You’re ready to apply for a mortgage. Get ready to gather a lot of paperwork. Lenders need to see a lot of documentation to evaluate your financial situation and make a final decision on whether or not to approve you for the loan.

Here’s what you may need to provide when you apply for a mortgage:

Proof of income:
If you’re employed, this means your W2s from the last two years. And if you’re self-employed or own a business, you need to submit tax returns for the last two years along with any other supporting documentation, like 1099s or P&L statements.

Tax returns:
Some lenders may also want to see your tax returns (if you’re employed and only submitted W2s).

Proof of employment:
You may need to provide paystubs from your employer or other supporting documents, like letters verifying your employment status.

List of all your liabilities and debts:
This includes credit card statements, statements from other loans or lines of credit, and child support or alimony payments.

List of all your assets:
This includes things like retirement accounts, investment accounts, and bank accounts. You can also include proof of other assets that you fully own.

Explanations for large transactions or unusual situations:
Lenders will comb through everything in your financial life when you apply for a mortgage. Be prepared to provide proof or explain any transactions they question (like large cash deposits) or information they deem insufficient (like a gap in work and income history).

If you have these documents available and you completed the steps above, you’re ready! Approach your lender and apply for a mortgage with confidence. Good luck and happy home buying!

 

Loan Programs

Homebuyer Down Payment Assistance Since 2012, over 14,900 new homeowners have taken advantage of the Maricopa County and Phoenix Industrial Development Authorities down payment assistance program. Through the Home in Five Advantage program, you and your family may be eligible for a 2.5% or 3.5% (depending on your FICO score) down payment/closing cost assistance grant (no repayment is required), with a .5% origination fee. The program offer an additional 1% down payment assistance for qualified United States military personnel, First Responders and Teachers.
The Arizona Department of Housing, seeks to provide assistance to creditworthy renters who can qualify for a mortgage but lack the resources for the down payment. The HOME Plus Home Loan Program provides an attractive 30-year fixed-rate mortgage with a down payment assistance (DPA) grant that can be used toward the down payment and / or closing costs. DPA is a non-repayable grant for down payment and closing costs, equal to a percentage of the initial principal balance of the mortgage loan. DPA is only available in conjunction with a HOME Plus loan. Qualified U.S. Military Personnel may receive an additional 1% on ANY mortgage type.
Typically an FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low down payment and you can have less-than-perfect credit. For FHA loans, down payment of 3.5 percent is required for maximum financing. Borrowers with credit scores as low as 500 can qualify for an FHA loan. Borrowers who cannot afford a 20 percent down payment, have a lower credit score, or can’t get approved for private mortgage insurance should look into whether an FHA loan is the best option for their personal scenario. Another advantage of an FHA loan is that it can be assumable, which means if you want to sell your home, the buyer can “assume” the loan you have. People who have low or bad credit, have undergone a bankruptcy or have been foreclosed upon may be able to still qualify for an FHA loan.
Most homebuyers choose conventional mortgages because they offer the best interest rates and loan terms—usually resulting in a lower monthly payment. And since most people choose a fixed-rate loan over an adjustable-rate mortgage, they don’t have to worry about rising mortgage rates, which makes it easier to budget. The standard down payment for a conventional loan is anywhere between 3 and 25 percent of a home’s value depending on the borrower’s credit and financial condition. For example, a $100,000 home could require a $20,000 down payment. However, depending on a lender’s unique specifications, a borrower may be able to put down as little as 3 percent at closing. Just keep in mind, this option is typically only available to those who meet additional requirements, like being a first-time homebuyer. Remember, with a larger down payment, homeowners also enjoy immediate equity in their home.
The VA Loan is a mortgage loan issued by approved lenders and guaranteed by the U.S. Department of Veterans Affairs (VA). The program was created in 1944 by the United States government to help returning service members purchase homes without needing a down payment or excellent credit. This historic benefit program has guaranteed more than 22 million VA loans to help veterans, active duty military members and their families purchase homes or refinance their mortgages. Today, the VA Home Loan program is more important than ever to service members. In recent years, lenders nationwide have tightened their lending requirements in the wake of the housing market collapse, making the VA Loan a lifeline for military homebuyers, many of whom find difficulty when faced with tough credit standards and down payment requirements.