Low down payment home loan options were once limited to FHA and VA home loans. Not anymore! While not new news, many Arizonans do not know a Conventional mortgage with as little as 3% down exists.
Low 3% Down Payment Conventional Home Loan
At one point, the Arizona Real Estate market was classified as “declining”. This regressive tag kept mortgage insurance companies from insuring home loans with only a 3% down payment. Without mortgage insurance, 3% down conventional mortgage options are pointless. Why? Simply put, borrowers with a less than 20% down payment on a Conventional loan also need mortgage insurance coverage.
Good news – times have changed. For all intent and purpose, Arizona is no longer a declining Real Estate State. Based on Arizona’s changed status, mortgage insurance companies offer flexible products. In fact, they now insure borrowers who put just 3% down.
Home Loans Allowing 3% Down
Step 1 – find a mortgage insurance company to to insure 3% down Conventional loans. Next, find a mortgage product allowing a 3% down payment in County Arizona. Both Fannie Mae and Freddie Mac offer great 3% down Conventional home loan options.
The combination of the 3% down home loan and willing mortgage insurance companies grants Arizona home-buyers alternative low down payment home loan options. While FHA and it’s 3.5% down loan program is a great option, often Conventional financing is more advantageous.
Credit score, debt to income ratio and other guidelines differences exist between FHA and Conventional home loans. However it is an option that cannot be overlooked in a home-buyers quest for the right mortgage plan.
By Jeremy House