Home Purchase Loans In Surprise

The real estate market in Surprise, Arizona, exhibits moderate competitiveness. The median sale price of a home in Surprise has decreased by 2.4% compared to the previous year. The median sale price per square foot in Surprise has increased by 1.3% compared to last year. The average time for homes in Surprise to receive an offer and sell is approximately 43 days. Hence, prospective house purchasers should anticipate a moderately competitive market with prices experiencing a little decline in comparison to the previous year.

Purchase Loan Programs in Surprise

Home buyers in Surprise, Arizona, can choose from various options when financing a home purchase. The following are the common home loan programs available:

• Conventional Home Loan

A conventional mortgage differs from government-insured loans like FHA and VA because the federal government does not back it. The adaptability of these financing strategies is a significant selling point. Term lengths, interest rates (fixed or adjustable), and minimum down payments are all customizable with this program. For many borrowers, the adaptability of a conventional loan is the deciding factor. Compared to loans guaranteed by the government, these loans typically have stricter credit scores and debt-to-income ratio requirements. The option to forego private mortgage insurance (PMI) is also available to those who put down 20% or more.

The Federal Housing Finance Agency (FHFA) establishes the eligibility standards for a conforming loan in Surprise, Arizona. Conforming loans correspond to the FHFA’s maximum loan limits. Unless classified as a high-cost area, the loan limit in Surprise, Arizona, generally aligns with the national baseline. Borrowers usually need a decent credit score of 620 or higher to qualify. The debt-to-income ratio (DTI) should be less than 43%. A down payment is also required, which can be as little as 3 – 5% for first-time homebuyers but is usually around 20% to avoid PMI. It’s important to note that lenders may have additional requirements or guidelines, so speak with a local mortgage professional for the most accurate and up-to-date information.

• FHA Home Loan

An FHA home loan is a government-backed mortgage insured by the Federal Housing Administration. Its purpose is to assist individuals with lower income levels and those purchasing a home for the first time. This loan is known for its low down payment and lenient credit requirements compared to conventional loans. If your credit score is 580 or better, you can pay as low as 3.5% down. FHA loans are a favored option for individuals seeking a mortgage with lower financial requirements, making it more attainable. They are particularly advantageous in cases where one has a lower credit score or a higher debt-to-income ratio, circumstances that may provide difficulty in obtaining a conventional loan.

To qualify for an FHA loan in Surprise, Arizona, you must meet specific requirements established by the FHA and your lender. First, you must have a credit score of at least 580 to qualify for the 3.5% down payment benefit. However, individuals with credit scores between 500 and 579 can still be eligible for a 10% down payment. Your debt-to-income ratio (DTI) should be less than 43%, though exceptions can be made for ratios as high as 50% in some cases. Furthermore, the home must be your primary residence and meet FHA property standards. Remember that FHA loan restrictions vary by area, and in Surprise, Arizona, these limits correspond to the county’s norm. 

• VA Home Loan

A VA home loan is a unique mortgage option available to members of the United States military, veterans, and their spouses. It is guaranteed by the Department of Veterans Affairs (VA), making it an excellent option for qualified individuals. One of the most noticeable advantages of a VA loan is that it does not demand a down payment, which sets it apart from most other types of mortgages. Furthermore, even with a down payment of less than 20%, VA loans do not require private mortgage insurance (PMI). This can result in significant savings during the loan’s term. The VA loan program is intended to give long-term financing to American veterans or their surviving spouses (assuming they do not remarry) as a way of honoring their service and assisting them in becoming homeowners.

Specific service requirements must be satisfied to qualify for a VA loan in Surprise, Arizona. These encompass meeting specified periods of active duty in the armed forces, the National Guard, or the Reserves. Additionally, spouses of service members who have lost their lives in the line of duty or due to a service-related disability are eligible. Further to these service prerequisites, lenders will require a Certificate of Eligibility (COE) issued by the VA to substantiate your eligibility. Although the VA does not establish a minimum credit score, private lenders who provide these loans may impose their own credit criteria, typically around 620.

Furthermore, although there is no official ceiling on the amount that can be borrowed with a VA loan, the VA’s guarantee is subject to a county-specific cap. This limit is generally consistent with the county’s standard limits in Surprise, Arizona. 

• USDA Home Loan

A USDA home loan is a mortgage program backed by the United States Department of Agriculture that aims to help rural homebuyers become homeowners. This loan is especially appealing if you want to buy a home in the country or the suburbs and meet specific income requirements. One of the most significant benefits of a USDA loan is that it provides 100% financing, allowing you to purchase a property with no down payment. In addition, compared to traditional loans, the loan has lower interest rates and mortgage insurance fees. It’s a great alternative if you’re a first-time buyer or don’t have a substantial down payment. To qualify, the property you want to buy must be in an eligible rural area, as defined by the USDA, and your household income cannot exceed certain limits specified for the area.

USDA home loans are classified into USDA Direct and USDA Guaranteed. The USDA Direct Loan is intended for low and very low-income borrowers in Surprise, Arizona. The USDA directly supports it and provides payment help to applicants to boost their repayment potential. This financing is excellent if you have a low income and require direct financial assistance to purchase a home. The USDA Guaranteed Loan, on the other hand, is intended for moderate-income purchasers. The USDA does not directly support it, but they do guarantee it. This assurance enables lenders to provide more favorable terms, such as lower interest rates and no down payment. Your income must be less than 115% of the area’s median income to qualify for a USDA Guaranteed Loan. Specific eligibility requirements, such as income limitations and property eligibility, can change, so check with a local lender or the USDA website for the most up-to-date information in Surprise, Arizona.

• Jumbo Loan

A jumbo mortgage exceeds the Federal Housing Finance Agency’s (FHFA) conforming lending limitations. This type of loan is required when purchasing a high-priced or luxury property that needs a loan amount more than what is generally allowed for conventional or government-backed mortgages. Because the federal government does not insure jumbo loans and poses a more considerable risk to lenders, they frequently have stricter qualifying restrictions. They’re perfect if you want to buy a high-priced home and have a solid financial foundation. Jumbo loan interest rates can be competitive with conventional loan interest rates; however, they may vary based on the lender and your financial circumstances.

In Surprise, Arizona, jumbo loan eligibility criteria can be more stringent than conventional loan requirements. To qualify for a jumbo loan, you’ll typically need an excellent credit score, usually 700 or higher. Lenders will also look for a low debt-to-income ratio (DTI) of less than 43%. It would be best if you also were prepared to make a more significant down payment, typically 20% or more of the home’s purchase price. Lenders might reduce their risk by requiring a larger down payment. Applicants for jumbo loans in Surprise, Arizona, must additionally have sufficient reserves or assets to repay a specified number of months of mortgage payments. Lenders will thoroughly check your financial records, including income, assets, credit history, and work status, due to the more significant loan amounts and risks involved.  

• Construction Loan

A construction home loan is designed exclusively for people who want to build a new home rather than buy an existing one. This form of financing covers the costs of building a new house, including materials, labor, and other connected charges. Unlike a regular mortgage, a construction loan is often a short-term loan with higher interest rates to reflect the risk involved. During the construction phase, payments are frequently interest-only, and the loan is typically converted to a regular mortgage once the home is done. 

Construction home loans are classified into two types: one-time close loans and two-time close loans. A construction-to-permanent loan, often known as a one-time close loan, involves a single loan application and closing process. This loan combines a construction loan and a mortgage into one loan, so you only have to go through one approval process and pay closing expenses once. This can be more convenient and potentially less expensive. On the other hand, a two-time close construction loan necessitates two different loans and two closings. Once the property is constructed, you must apply for a second loan to pay off the construction loan and act as your permanent mortgage. This option allows you to shop for the best terms on your permanent mortgage but may require extra paperwork and higher closing expenses. When picking between the two in a circumstance such as home construction, consider the convenience, cost implications, and long-term financial objectives.

Apply for a Home Purchase Loan in Surprise

Capital Home Mortgage is a mortgage company that provides customers in Surprise, Arizona, with a wide range of services. Our mortgage loan range encompasses FHA, VA, Conventional, USDA, Jumbo, and HUD 184 lending programs.

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