Once the housing market took a turn for the worse in 2007 and 2008, it seemed that the days of getting an Arizona mortgage with little to no money down were well behind us. That meant that a vast number of potential homebuyers (those that had qualifying credit and solid employment but not enough resources to afford a large down payment) would be left out of the market, at least for the time being.

Fast forward five years and while the economy is still struggling to recover from the ‘worst economic crisis since the Great Depression,’ the housing market has been showing signs of recovery. The tough truth, though –and you will likely hear this from any of the legitimate AZ mortgage brokers throughout the state as well as Maricopa County- is that the days of acquiring a mortgage with no money down is over. You will have come up with something, at the very least. But how much should you expect to pay and would 5% be enough?

Tightened Qualifying Terms

Once the mortgage crisis hit and the politicians in Washington, D.C. were seeking anyone and everyone on whom to lay the blame, lenders surrounded their wagons and tightened their qualifying criteria. It also led to an increased demand for larger down payments. Between 2008 and 2011, the standard was 10%, which meant that if you were applying for a $100,000 home loan, you would need to place a $10,000 down payment in order to even be considered for a mortgage.

Since 2011, more financial institutions have eased their lending restrictions and have reduced the Conventional (Fannie Mae and Freddie Mac) minimum down payment to 5% down.

Now, this doesn’t mean that every Arizona mortgage lender is going to accept 5% for a down payment, but there are alternatives and you can learn more about these from any number of AZ mortgage brokers. FHA (Federal Housing Administration) financing is the first place that new homebuyers look when trying to apply for a home loan with less than the standard 5% down payment. FHA only requires a 3.5% down payment.

The downside to this low down payment is that fees tend to be relatively high by comparison with other mortgage lenders. So, when you are looking for an Arizona mortgage and don’t have the full 5% available to put down on your new home, there are alternatives and options.

If you have any questions about this or if you have any questions you’d like us to answer on our podcast, you can email your questions to team@azmortgagebrothers.com or give us a call at (602) 535-2171. Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

•••

Thanks for listening and reading the Mortgage Brothers Show. Let us know if you have any questions you’d like us to answer on this podcast. You can email your questions to Tom@AZMortgageBrothers.com or Eddie@AZMortgageBrothers.com.

Be sure to ask us for a free quote on your next mortgage. We’ll personally work with you and help you through the whole process.

Signature Home Loans LLC does not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Signature Home Loans NMLS 1007154, NMLS #210917 and 1618695. Equal housing lender.

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