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Home Purchase Loans Arizona

Arizona purchase loans offer different alternatives for financing, allowing the borrower to get the most benefits from housing loans. The purchase money loan is evidenced through the mortgage or trust deed a home buyer signs when the home buyer purchases the home. Purchase loans are available from financial institutions like banks, credit unions, and others.

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Vanilla Loans

These are also known as the fixed-rate mortgage. The vanilla loans are the gold standard of mortgage loans where there is a fixed interest for the life of the loan. The usual terms for this are 20 percent for the down-payment and 80 percent for the loan though there are several loans which vary from this. It does not necessarily mean the owner cannot put down more than 20 percent of the loan. That would reduce the interest payments given every month. 

Conventional Purchase Loans

Most banks make the mortgage brokers and banking institutions initiate these loans. They comply with Fannie Mae regulations, so they are set and sold after the close within the secondary mortgage market. The requirements for a conventional loan may range from zero for the standard borrowers in particular categories to 3, 5, or even 10 percent or more. Should the borrower be tight on the ratios, then the lender could need a down payment much more than 20 percent. This is a means of lowering the loan so it can be within the parameters of the stated ratios. This is one of the ways a buyer can purchase an expensive home. 

VA Money Loans

VA loans are available for both active military personnel and retired veterans as well as their spouses though this would be under unique settings. The VA loan is the most-friendly with zero down-payment down though the borrower can opt to offset this condition. The borrowers are also restricted from paying specific fees, and the VA mandates a clear pest completion. Once the purchase money loan is paid off via refinancing, it is no longer purchase money financing. 

FHA Purchase Loans

The second most common form of purchase loans is the FHA. These are government-insured, and so they require much less from the borrower in the form of upfront payment. They allow for 3.5 percent down on the principal, and some states offer secondary financing as a means to further assist with the down fees and the closing costs. Investors are not eligible for FHA loans as they are given to borrowers that are going to occupy the property.