Home Purchase Loans In Chandler

Prospective home buyers in Chandler, Arizona, may expect a competitive atmosphere in the present property market. The median sale price of a property in Chandler fell 3.0% from the previous year. Chandler homes typically sell after 34 days on the market.

Purchase Loan Programs in Chandler

Prospective home buyers in Chandler, Arizona, are provided with a range of financing options to simplify the purchase of their homes. The subsequent programs are commonly encountered:

• Conventional Loans

In Chandler, Arizona, a conventional mortgage is a home loan not guaranteed or insured by the federal government. Private lenders such as banks, credit unions, or mortgage companies often issue this mortgage. Fannie Mae and Freddie Mac, two government-sponsored enterprises (GSEs) that buy and securitize mortgages, determine the rules for conventional loans.

Conforming and non-conforming loans are both types of conventional mortgages that differ principally in whether they adhere to Fannie Mae and Freddie Mac’s loan limits and requirements. Conforming loans fall within these boundaries, making them more standardized and frequently more accessible to qualify for. In contrast, non-conforming loans fall outside these limits, catering to borrowers who require more significant loan amounts but typically at the expense of more stringent qualification requirements.

The 2023 conforming loan limits in Chandler, Maricopa County, are $726,200 for a single-family residence, $929,850 for a duplex, $1,123,900 for a triplex, and $1,396,800 for a quadplex.

• FHA Loans

In Chandler, Arizona, an FHA home loan is a mortgage insured by the Federal Housing Administration (FHA), a branch of the United States Department of Housing and Urban Development (HUD). This loan is intended to encourage homeownership among people who might not qualify for conventional mortgages, such as first-time purchasers or those with low credit ratings. FHA loans are well-known for requiring lower down payments and being more accessible to consumers with less-than-perfect credit.

A conventional conforming loan, on the other hand, is a mortgage that follows the criteria established by Fannie Mae and Freddie Mac, including specific loan limitations. Unlike FHA loans, conventional conforming loans are not backed by a government entity. They frequently require higher credit ratings and more significant down payments. While both FHA and conventional conforming loans attempt to make homeownership more accessible, they serve different portions of the borrower market. FHA loans, which the government backs, are intended to be more accessible to those with low incomes or credit issues, with lower down payments and more flexible credit conditions. Conventional conforming loans, on the other hand, are often better suited to applicants with better credit and the means to make a larger down payment.

The 2023 FHA loan limits in Chandler, Maricopa County, are $530,150 for a single-unit home, $678,700 for a duplex, $820,350 for a triplex, and $1,019,550 for a four-plex.

• VA Loans

A VA home loan is a mortgage loan program established by the United States Department of Veterans Affairs (VA). This program is intended to give long-term financing to qualifying American soldiers or their surviving spouses (who do not remarry). The VA loan program is distinguished by the fact that the VA guarantees a portion of the loan, allowing lenders to offer more favorable conditions to borrowers, such as no down payment and no private mortgage insurance (PMI).

The VA loan qualifying standards revolve around service requirements. Individuals must be veterans, active-duty military members, National Guard members, Reservists, or the surviving spouses of a service member who died in the line of duty or as a consequence of a service-related disability to qualify. Veterans must have spent at least 90 days of continuous active service during wartime or 181 days of continuous active service during peacetime. A minimum of six years of service in the National Guard or Reserves is required, or they must have been dismissed due to a service-connected disability.

While the VA does not mandate a minimum credit score, private lenders may have their own requirements, often requiring a score of 620 or above. Borrowers must also have a good credit history, a stable income, and a valid Certificate of Eligibility (COE). The subject property must be for the borrower’s primary residence, and the VA must appraise it to determine its value and guarantee that it fulfills safety standards.

• USDA Loans

USDA home loans are mortgages backed by the United States Department of Agriculture. USDA loans, mainly created to promote rural development and assist low-income rural households in purchasing homes, offer various advantages over conventional loans, including no down payment, reduced interest rates, and more flexible credit standards. These loans are especially beneficial for anyone looking to buy a home in designated rural areas, which, unexpectedly, include many suburban neighborhoods near large cities.

There are two main types of USDA home loans: USDA Direct Loans and USDA Guaranteed Loans. USDA Direct Loans come straight from the USDA. This program is designed to help people with low or very low incomes find decent, safe, and clean housing in rural places that qualify. The terms may be better than Guaranteed Loans and may lower the mortgage payments for a short time.

USDA Guaranteed Loans are provided by private lenders but are guaranteed by the USDA. Lenders may offer better terms because of this guarantee. Families and individuals with modest incomes are the ones who should get these loans. Since the USDA backs them, it lowers the risk for lenders and lets them give loans to people who might not be able to get conventional loans.

• Jumbo Loans

A jumbo home loan exceeds the conforming loan limits established by the Federal Housing Finance Agency (FHFA). Any mortgage in Chandler that is over $726,200 is classified as a jumbo loan. This category is essential in high-cost areas where real estate costs exceed the national average.

Jumbo loans often have stricter qualifying restrictions than regular conforming loans. Borrowers usually need a solid credit profile to qualify for a jumbo loan. This includes a high credit score, frequently 700 or above, demonstrating their dependability in credit management.

Borrowers must have a modest debt-to-income (DTI) ratio, which should not exceed 43%. This ratio reassures lenders about borrowers’ ability to make monthly payments without financial stress. Furthermore, jumbo loans frequently need more significant down payments, sometimes as much as 20% or more of the home’s purchase price, to decrease the lender’s risk.

Lenders also extensively examine the borrower’s financial reserves. They often require borrowers to have significant reserves – sometimes enough to cover a year or more of mortgage payments – to ensure that they can continue to make payments in the event of financial setbacks. Employment history and income are other important considerations; lenders like a consistent and high income, as proven by documentation such as W-2 forms, tax records, and bank statements.

• Construction Loans

A construction home loan is a specific type of financing used for constructing a new home rather than purchasing an existing one. These loans are unique in that they provide cash for the construction portion of a house, which is generally disbursed in phases as the development continues.

Construction home loans are divided into two types: one-time close loans and two-time close loans. A two-time close construction loan consists of two loans. The first loan is only for the construction phase and provides funding to build the house. This loan typically lasts a year or until the construction is completed. When the construction is finished, the borrower must obtain a second loan, a permanent mortgage, to pay off the construction loan. This method entails two sets of closing expenses and two approval processes, potentially making it more expensive and time-consuming.

On the other hand, a one-time close construction loan, also known as a construction-to-permanent loan, combines the construction loan and the permanent mortgage into a single loan. This method requires the borrower to complete only one application and pay a single set of closing charges. When the construction is finished, the loan instantly transforms into a permanent mortgage, eliminating the need for a second loan application or closing. This loan simplifies the borrowing procedure and can be more cost-effective regarding closing costs and interest rates.

Apply for a Home Purchase Loan in Chandler

Capital Home Mortgage strives to streamline and enhance the home-buying experience, making it as seamless and enjoyable as possible. Our organization provides a comprehensive range of mortgage services, encompassing various mortgage alternatives, alongside a commitment to delivering exceptional customer service that sets us apart within the industry.

Call (480) 360-6650 to speak with a Chandler Home Loan Specialist.