FHA Loans-Chandler, AZ
The city of Chandler in Arizona is a great place to live. Whether you are a first-time home buyer or are looking for a second or third move, moving to this part of the country can be truly exciting.
Though Chandler is one of the more affordable cities in which to buy a home in Arizona, many first-time homebuyers do not have the funds needed to pay for the full price of a house, especially if they have limited resources. An FHA loan from District Lending could be the solution.
What Are FHA Loans?
An FHA loan is a home loan option that is available for borrowers that may not meet the requirements of a conventional mortgage. When a borrower defaults, lenders lose money, so risky buyers will not be approved for a mortgage loan. FHA loans have a few notable features.
Insured by Federal Housing Administration
The Federal Housing Administration (FHA) exists so that the federal government insures loans. This way, FHA-approved lenders accrue less risk and can offer more flexible terms for approval. This entity can provide mortgage lenders with backing in case of a default, making loans accessible to more buyers.
Lower Credit Requirements
A credit score plays an important role in qualifying for loan programs. To qualify for an FHA program, you must have a score of at least 580, though some lenders may make exceptions for lower scores.
Competitive Interest Rates
Since the goal of FHA home loans is to be more affordable for buyers with limited resources, they tend to have low-interest rates. This reduces the total cost and the monthly premiums, helping you save thousands in the long run.
What Impacts Monthly Premiums for an FHA Loan?
Calculating monthly premiums is an important step in the FHA home loan process. Understanding the factors that impact these costs can help you gain clarity on what you can afford.
Down Payment
Down payments are funds paid upfront to purchase a home. The higher the down payment, the lower the total cost of the FHA loan, which also results in lower mortgage payments. Down payments for FHA loans must be at least 3.5%. Down payment assistance is available through the HOME Plus program from the state or the First-Time Homebuyer’s Program in Chandler.
Mortgage Interest Rates
As mentioned before, the interest rate will determine how much you pay to the lender on top of the loan amount. Interest rates are affected by your credit score and the housing market primarily, which in Chandler means an average of 7.4% for a 30-year fixed-rate mortgage.
Private Mortgage Insurance
FHA loans require adequate insurance to be paid by borrowers since down payments are lower. Paying for this insurance will increase your premiums each month.
Closing Costs
For every real estate transaction, there are extra fees that come into play when signing the contract. These fees often equal about 3-6% of the total price of the home, so count on paying them upfront or rolling them into the FHA loan. The HOME Plus program in Arizona can also help cover some closing fees.
Secure Home Loans Through District Lending
Free Quote
Want to learn more about the loan process before you complete a loan application? See if you qualify for our FHA program with a free quote.
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Mortgage Calculator
Sometimes it is easier to see real numbers on the page. Before you start the FHA loan process, calculate your payments (jumbo loan amounts possible too) by adjusting the variables in our mortgage calculator.
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Contact Us Today
Have questions about how the home loan process works and the unique criteria of an FHA loan? Don't hesitate to seek out answers from District Lending and find out more about payment assistance programs in Chandler.
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