Arizona Mortgage Library - Mortgage Programs

Arizona Mortgage Library

AZ Mortgage Library $ Arizona Interest Rates $ AZ Mortgage Refinance $ Arizona Mortgage Interest Rates $ AZ Mortgage Company $ Arizona Real Estate

Direct 480-424-7144 Fax 480-424-7145 Toll Free 800-768-9700

Mortgage Programs

Following are abbreviated loan program guidelines. Detailed information available.

Conventional

30 Year Fixed - 5% down fixed payment loan amortized over 30 years to $214,600.
30 Year Fixed Jumbo - 10% down amortized over 30 years to $400,000, 20% down to $650,000.
15 Year Fixed - 5% down fixed payment loan amortized over 15 years. Equity accumulates much faster.
30 Due In 7 - 10% down with 30 year amortization. Payment fixed for 7 years then converts to a current fixed rate.
30 Due In 5 - 20% down with 30 year amortization. Payment fixed for 5 years then converts to a current fixed rate.
Buydown - Lender, seller or buyer paid buydowns allow a borrower to qualify & start at a lower rate and payment.
Second Homes - 10% down. Property must be located 60 miles from primary residence or be in a resort area.
Investment Property - 1 - 4 units w/ 10% down payment. Interest rate usually 3/4% above conventional rate.
5 Plex and Mixed Use Property - 35% down. Seller can carry up to 20% second.
Commercial Property A thru C - Based on age, condition, use, tenants, cash flow & owner's financial strength.
Mobile Homes - 5% down double wide and land home packages. 10% down single wide & pre 1976. 10% Chattel.

Adjustable Rate Mortgages

2/6 Treasury ARM - 5% down, adjusts every 12 months. 2% maximum change per year & 6% life ceiling.
1/6 LIBOR ARM - 5% down, adjusts every 6 months. 1% maximum change per 6 months & 6% life ceiling.
11th District Cost Of Funds (COFI) - 5% down, least volatile ARM. Often has potential for negative amort.
3/1 ARM - 5% down, rate fixed for 3 years, then converts to an ARM. Approximately 1% less in rate than 30 year.
5/1 ARM - 5% down, rate fixed for 5 years, then converts to an ARM. Approximately .75% less in rate than 30 Yr.
7/1 ARM - 5% down, rate fixed for 7 years, then converts to an ARM. Approximately .50% less in rate than 30 Yr.
10/1 ARM - 5% down, rate fixed for 10 years, then converts to ARM. Approximately .25% less in rate than 30 Yr.
Adjustable Rate Mortgage rates can be bought down to help an applicant qualify for more loan and home.
Adjustable Rate Mortgage adjusts by adding a stated fixed margin to a stated changing index.

First Time Home Buyer

Usually defined as not owning real estate over the past 2 years. Income generally must be less than $50,000 per year. Often requires a brief home buying study course. Underwriting is more liberal. Closing costs and prepaids can be shifted. Also, can use the MCC Tax Credit to qualify for more home.
3% Down Payment - 33/38 debt/income ratio. 1 month PITIMI reserves required. Buyer must provide their own down payment funds. The MCC is subtracted from the PITIMI to help a borrower qualify for more home.
2/3 Option - 38/42 debt/income ratio. 1 month PITIMI reserves required. 2% must come from the borrower's funds. 3% can be a gift, grant, or unsecured loan. Cannot use MCC, and a Co-borrower must occupy the home.
5% Option - 34/40 debt/income ratio. No reserves required. No maximum income restrictions. MCC is subtracted from PITIMI before calculating ratios. This allows a borrower to qualify for more home.

FHA

The Federal Housing Administration, (HUD #379-4461) does not lend money. FHA insures lenders against foreclosure loss. Borrowers pay a 2.25% mortgage insurance premium to cover the insurance. The premium is financed into the loan. A .50% mortgage insurance premium is also paid monthly.
Any one is eligible for a FHA loan. There are no income restrictions. The two primary restrictions are: 1. $107,800 is the maximum loan amount, and 2. A Condominium must be on the HUD approved project list. The positives include: 1. The required debt/income ratio is 29/41, 2. No cash reserves are needed, 3. The total out of pocket investment is approximately 5.75% of the purchase price. Also, the investment can be reduced to 4.875% with the proper loan structure, 4. The MCC is subtracted from the PITIMI prior to calculating ratios, 5. All closing funds can be gifted from a family member, 6. A borrower can qualify on an ARM payment, and 7. A non-occupant co-borrower is permitted. Further, the debt and income of both parties is combined when calculating the D/I ratios.

VA

The Veterans Administration does not lend money. The VA insures lenders against foreclosure loss. A VA borrower pays a 2% Funding Fee to cover this insurance. The Fee is 3% if a Veteran has previously used their VA loan. The Funding Fee can be paid by a Veteran, or can be financed into the loan. Veterans must meet established service requirements to be eligible for a VA loan. The VA or a lender can provide a Request For Eligibility form. The completed form and a DD214 are taken to the VA by the Veteran. Then a Certificate of Eligibility is issued on the spot. The biggest benefit of a VA loan is the 0 down payment. Also, there is no monthly mortgage insurance. The negatives include: the Funding Fee, and a guideline that prohibits a non spouse co-borrower. Also, there is no ARM program, and a buydown is underwritten at the second year rate and payment. (Department of Veterans Affairs - 3225 N. Central Ave. - Phoenix, AZ 85012 - #640-4758).

Construction

Loans come in two basic flavors. The Two Time Close consists of two separate loans. The first loan is for the construction period only. The second loan is for the permanent financing when construction is completed. The One Time Close is a single loan, with one set of terms during construction, that convert to permanent terms after construction. Usually Construction Loans require a 20% down payment. However, there are Construction Loans that permit a 5% down payment including hard and soft costs. An Underwriter will view plans, specs, and a cost breakdown on a project. Also, a licensed contractor is usually required to oversee the construction. If an Owner Builder has enough experience, it is possible to get around this guideline. Further, there are No Income Verification and Alternative Credit versions of Construction mortgages available.

No Income Verification

10% Down No Ratio - Income is not stated or verified. 680 credit score. No 4506. 3 - 6 months reserves required.
20% Down No Ratio - Income is not stated or verified. 660 credit score. No 4506. 3 months reserves required.
5% Down Stated Income - Income is stated, not verified. A 700 credit score & 6 months reserves are required.
15% Down, Funds Not Documented - Income is stated, not verified. Source of funds are not documented.
25% Down No Job Loan - Employment, income & funds are not verified. 660 credit score w/ a 2 year history.
80/10/10 With Recent Bankruptcy - Borrower puts 10% down, seller carries 10%. Income stated, not verified.
Second Home No Ratio - 20% down. 660 credit score. 6 months PITI reserves required.
Investment Property No Ratio - 20% down. 660 credit score. 6 months PITI reserves required.
Cash Out Refinance No Ratio - Income not stated. 20% equity required. 6 months reserves required.
100 % CLTV Cash Out 2nd - 2 hour approval. Superior credit required. Prefer wage earner to self employed.
90% CLTV Cash Out 2nd - Fixed or ARM to 90% of property value. Superior credit required.
Although income is not verified, employment is. A two year job or industry history is necessary.

Low and No Down Payment

125% Purchase Money 2nd - No money down. Can borrow closing costs and consolidate debt. Also, can borrow for home improvements. 620 to 700 credit score. 45% D/I if salaried, 40% D/I if not. Rate based on credit score.
100% CLTV Purchase - 80% lender 1st with 20% lender 2nd. 650 credit score required. 45% D/I ratio.
100% CLTV Purchase - 80% lender 1st with 20% lender 2nd. 640 credit score required. 45% D/I ratio.
5% Down Stated Income - Income stated, not verified. 700 credit score required. 6 months reserves verified.
3% Down - 3% down plus closing costs. 620 credit required. $47,500 max. income. Cannot own other real estate.
2%/3% Down - 2% from buyer and 3% gift, grant or unsecured loan. $54,625 max. income. No MCC. 38/42.
5% Down B Credit - No BK/Foreclsure in 5 years. 4 X 30 revolving/Installment last 12 months. No 60's, 45 D/I.
10% Down C Credit - No BK/Foreclosure in 2 years. 30's & isolated 60's last 12 months. 45% D/I ratio.

Cash Out

125% CLTV - Cash out for any purpose. 680 credit score. 45% D/I ratio. O.K. to close same time as purchase.
125% CLTV - Cash out for Debt Consolidation & Home Improvements. 620 Credit score. 45% D/I ratio.
100% CLTV - Cash out any purpose. Can close immediately after purchase. 680 credit score with a 50% D/I ratio.
100% CLTV B Credit - Cash out any purpose. 4 X 30 & 0 X 60 revolving/installment lates in last 12 months.
90% CLTV - Cash out for any purpose. 620 credit score. 45% D/I ratio. Close 2nd along with purchase loan.
90% CLTV NO RATIO - Income is not stated or verified. 680 credit score & 6 months PITI reserves required.
Second Home 90% CLTV - Cash out for any purpose. 680 credit score. 45% D/I ratio.
Investment Property 90% CLTV - Cash out any purpose. 680 credit score. 45% D/I ratio.

Alternative Credit

5% Down - 4 X 30 revolving/installment lates last 12 months. 45% D/I ratio. No BK/Foreclosure over past 5 years.
10% Down - Majority of accounts paid as agreed. 30's & isolated 60's in last 12 months. Mortg. 2 X 30. 45% D/I.
15% Down - Bankruptcy discharged 12 months ago. Income not verified. Closing funds not verified.
20% Down - 10% can be a seller carry back. Income not verified. Bankruptcy yesterday if mortgage on time 12 mo.
30% Down - Mortgage 120 days late. Bankruptcy discharged 1 day. NOD less than 149 days at closing.
35% Down - Mortgage not a factor. Current foreclosure O.K.. BK discharged 1 day. Liens and Charge offs O.K.

[(Mortgage Application)] [Markets & Economy] [Mortgage 101]
[Secure Application] [Calculators] [Mortgage Terms] [Mortgage Rates] [Economic Terms]
[Mortgage Programs] [Continuing Education] [Testimonial Page] [Underwriting Guidelines]

MB 0901972