Home Loans California & Arizona

Tucson AZ 3% down purchase home loan, who does them

November 27th, 2019 11:50 AM by Nathan Rufty

Looking for a mortgage in Tucson AZ with only 3% down payment to purchase a home? Here are some options. You've found a home you'd love to own, and you're ready to buy. But you don't have a 20% down payment. Don't worry; there are several low-down-payment alternatives.



Veterans Affairs (VA) loans in Tucson AZ
We offer VA home loan programs to help you buy, build, or improve a home or refinance your current home loan—including a VA direct loan and 3 VA-backed loans. Learn more about the different programs, and find out if you can get a Certificate of Eligibility for a loan that meets your needs.

With a VA-backed home loan, we guarantee (or stand behind) a portion of the loan you get from a private lender. If your VA-backed home loan goes into foreclosure, the guaranty allows the lender to recover some or all of their losses. Since there’s less risk for the lender, they’re more likely to give you the loan under better terms. In fact, nearly 90% of all VA-backed home loans are made without a down payment.

Lenders follow our VA standards when making VA-backed home loans. They may also require you to meet additional standards before giving you a loan. These standards may include having a high enough credit score or getting an updated home appraisal (an expert’s estimate of the value of your home).

U.S. Department of Agriculture (USDA) loans in Tucson AZ
For starters, a USDA loan is one of the only loan programs offered to the general public that allows you to finance 100% of your home’s value. That means no down payment of any kind! USDA loans are made even more affordable through very competitive fixed interest rates, ensuring your payments will not increase every month.

USDA Loans .Net requires a middle credit score of at least 620. If you are close, apply and we can help. USDA home loans also offers affordable 30 year terms. If you are a first time home buyer, or not, a USDA loan is the perfect fit.

Federal Housing Administration (FHA) loans in Tucson AZ
These loans, designed for those with less-than-perfect credit, are insured by the Federal Housing Administration and also allow a down payment as low as 3.5%.

The down payment can be a gift from a family member, government agency or non-profit organization. However, there is a limit to the amount you can borrow, which varies depending on your location. You will also be required to take out FHA mortgage insurance. In most cases, this insurance costs 1.5 percent of the loan amount on closing, plus 0.5 percent per year -- the amount can be rolled into your mortgage.

On a $100,000 mortgage, the 1.5 percent upfront FHA mortgage insurance payment would be $1,500 which, wrapped into a fixed, 30-year mortgage at 8 percent, would come to an additional $11.01 per month. The 0.5 percent annual premium would be $500 per year or $41.67 per month.

Tucson AZ Conventional loans
Some mortgage lenders offer small down payment mortgages — as little as 3% down payment — to borrowers who qualify.

These loans, however, aren’t insured by a government agency, so the lender will require private mortgage insurance (PMI). The cost of PMI varies but is often between 0.5% and 1% of the loan amount. You can typically request to have your PMI dropped once you have at least 20% equity in the home.

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