Conventional Loans: Tucson, AZ
With its comparatively low cost of living and dazzling scenery, lovely Tucson, AZ, has a lot to offer prospective home buyers who want some Southwestern flair.
The housing market is quite accessible here, with homes priced about 16% lower than in nearby Phoenix, perfect for families looking to settle down in a brand-new home. If you’d like to live in a smaller community like Green Valley, prices are even better, and you’ll enjoy small-town comfort with a bustling metropolis nearby.
If you’re ready to start home-buying in the Grand Canyon State, District Lending has numerous loan programs to help finance your home, including conventional loans. We make the mortgage process easy with our comprehensive services and competitive mortgage products designed to help you achieve your dream of home ownership.
Tucson, Arizona: Conventional Loan Options
Unlike an FHA, VA, or USDA loan, a conventional loan refers to any mortgage not backed by the government; these home loans are provided directly by lenders with no government subsidization.
Conventional loans are an excellent choice for those with higher credit scores, as they can get greater flexibility than with an FHA loan or other government-backed mortgage program. There are multiple options for conventional loans, each with its advantages.
Loan Limits: Conforming Conventional Loans
Conforming conventional loans are below the conforming loan limit set by the Federal Housing Finance Association; for 2023, this is any home loan of $726,200 or less for a single-family property.
Fannie Mae or Freddie Mac can guarantee any mortgage of this size, meaning they are more widely available. Most conventional loans, particularly in the highly affordable area of Tucson, Arizona, are conforming home loans.
Loan Limits: Non-Conforming Conventional Loans
Non-conforming conventional or jumbo loans exceed the conforming loan limit of $726,200. They can’t be guaranteed by Fannie Mae and Freddie Mac, so they’re only offered to highly reliable borrowers who have proven they can afford the mortgage.
A non-conforming conventional loan is a superb option if you’re purchasing an investment property or want something bigger than the standard conventional loan can finance.
Jumbo loans require a higher down payment and have more stringent requirements, such as a credit score of about 700 or 720. Fewer lenders offer this loan program, but don’t worry – we’ll help you find a great home loan of any size.
Fixed-Rate Conventional Loans
This loan program locks in your rate at the beginning of your mortgage; it’s the perfect option if you buy when interest rates are low, as you can be guaranteed this rate throughout the life of your loan.
If you want consistent mortgage payments and are happy with the rate available at the onset of your loan, fixed-rate conventional loans are a great choice. You can always refinance to an adjustable-rate mortgage later on in the life of your loan if you choose.
Adjustable-Rate Conventional Loans
An adjustable-rate mortgage, or ARM, will recalculate your interest rate based on market conditions within specific parameters. These mortgages can be significantly cheaper than fixed-rate conventional loans initially, which is an excellent option for younger, first-time homebuyers who expect to make more money later in their career.
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Factors to Consider When Buying a Tucson Home
At District Lending, we believe in giving you all the options necessary to make an informed decision. We’ve developed a mortgage calculator to help you determine what conventional loan amount you can afford. You can input various factors to estimate your monthly mortgage payment to help budget more effectively.
What's Your Financial Picture?
Your financial outlook determines your interest rate; everything from your credit score to your debt-to-income ratio and amount in savings will determine how lenders see you and what rates they will be willing to provide.
If you have less-than-perfect credit or high debt, don’t fear – your dream of becoming a homeowner can still come true. Get in touch with one of our mortgage loan officers, and they can help you decide if government-backed loan programs, such as an FHA loan, are a better choice for you.
How Much Can You Afford in a Down Payment?
The larger your down payment, the less you will pay over time. Most Arizonans put down about 7%.
The average down payment in Arizona is $59,000, so paying that much upfront can be daunting. You may be eligible for Tucson’s down payment assistance program through the Community Investment Corporation if you have a low income.
Will You Have to Pay Private Mortgage Insurance?
If your loan-to-value ratio is higher than 80% – in other words, if you put less than 20% down – you’ll be required to pay mortgage insurance. In Arizona, this is anywhere from 0.5% to 1% of the total home loan.
What Are the Closing Costs?
Your closing costs go to pay the lawyer, title company, lender, and other agents involved in the mortgage process, and they range from 3% to 6% of the overall cost of your conventional loan. However, you can reduce these costs in many ways, and your mortgage loan officer can help you determine your options.
The District Lending Difference
Many homebuyers are just curious about how much they can afford in conventional loans, so we’ll let you request a free quote without running your credit score. This can help you better understand your mortgage options before you fall in love with a home.
Getting pre-approved for conventional loans is incredibly easy with District Lending; you can do it all online and get preapproved in only a few hours. This frees you up for the best part of searching for an Arizona loan: finding that gorgeous Tucson home.
Our convenient mortgage calculator lets you explore the different values determining your mortgage payment for a conventional loan, such as how much you’ll pay in mortgage insurance and the average property taxes. This helps you prepare for your Arizona home search so you know exactly how much you can afford.
Serving the community of Tucson, AZ and the surrounding area