Home Loans in Arizona: Mortgage Loan Options and Choosing the Right Lender

Home Loans in Arizona: Mortgage Loan Options and Choosing the Right Lender

Posted: 2020-11-20 | Author: Scott Roberts

Arizona home loan rates have been at or near historic lows in recent years, and there has never been a better time to obtain a new mortgage loan or refinance. If you have been thinking about buying a home in Phoenix or a nearby AZ community, there are several types of home loans to choose from, and it is important to understand the differences between each. It is also important to work with mortgage specialists who understand the ins and outs of Arizona mortgages and how to help you choose the right one.

Arizona Home Loan Options
Before applying for a mortgage loan, check out the options that are available to you. First of all, there are a few different mortgage payment terms that borrowers can opt for:

  • Fixed-Rate Mortgage: This is the most commonly used home loan product for new purchases and refinances. With a fixed-rate mortgage, your interest rate is locked in for the life of the loan, which gives borrowers the peace of mind knowing that their rate will not change regardless of what happens in the mortgage market. Most borrowers choose a 30-year fixed-rate loan, so they can spread the payments out over a longer period of time. However, some opt for a 15-year mortgage so they can pay less interest and pay their home loan off faster.
  • Adjustable-Rate Mortgage (ARM): With an adjustable-rate mortgage, the borrower receives a lower rate for a set period (usually somewhere between three and 10 years), then the rate gradually adjusts during the remaining years of the loan. An ARM may be a good option for borrowers who plan to sell after a few years, or for those with less than perfect credit who want to build a higher credit score and position themselves to refinance to a fixed-rate mortgage later on.
  • Reverse Mortgage: Arizona seniors (age 62 and older) who have considerable equity in their home can use a reverse mortgage to cash out on some of that equity in the form of a lump sum, fixed monthly payment, or line of credit. The balance of the mortgage is due when the borrower dies, sells the home, or moves out of the home permanently.

Arizona home loans can be obtained through a bank or private lender, or through a government program. The most common Arizona mortgage loan options are:

  • Conventional Loans:
  • A conventional home loan is one that is not guaranteed or insured by a government agency. Instead, they are guaranteed through the private sector. A large percentage of new purchases and refinances in Arizona are done with conventional loans. These mortgages typically require a down payment of between 5% and 20% of the amount of the loan, and if the down payment is less than 20%, private mortgage insurance (PMI) is required.
  • FHA Loans: These are mortgage loans that are insured by the Federal Housing Administration. FHA loans are especially popular with first-time homebuyers, because they have more flexible underwriting standards and require a lower credit score than a conventional loan. In addition, these loans only require a down payment of 3.5%.
  • VA Loans: These AZ home loans are guaranteed by the US Department of Veterans Affairs, and they are only available to active duty military, veterans, those who been honorably discharged, and certain military spouses. For those who are eligible, VA loans are often the best option, because they have very favorable terms which include the ability to obtain a mortgage loan with no down payment.

Choosing the Right Mortgage Broker in Phoenix
There are plenty of Arizona mortgage brokers out there to choose from, and selecting the right broker is one of the most important decisions that consumers can make during the home buying process. You want to make sure you are working with a lending specialist who has access to all of the home loan programs that are available to Phoenix borrowers. But just as importantly, you want someone who thoroughly understands these programs and can help you understand which program is best for you.

Here are some things you should consider when choosing an Arizona mortgage broker:


When you are comparing loan agencies in Phoenix, be sure to look for an agency that has been doing mortgage loans for an extended period of time. Experienced home loan experts will have dealt with the most complex situations, and they will have the ability to develop creative solutions to help put the borrower in the best possible financial position. They will also have forged relationships with numerous lenders and other industry specialists, which they can leverage to help give their clients an advantage in the marketplace.

At AZ Lending Experts, for example, we have been in business for nearly a decade, and our co-owners Richard Simon and Scott Roberts as well as our loan processor Kristine Hutchison have been with the company from the start. Between them, they have more than 45 years of experience in the mortgage business.

Awards and Recognitions

Another important thing to look at when you are comparing lending agencies is the awards and recognitions that they have received. Being recognized by peers and industry leading publications demonstrates an agency’s talent, trustworthiness, client satisfaction, and commitment to excellence.

AZ Lending Experts has achieved high recognition from multiple third-party publications. We have been ranked number one mortgage broker by Ranking Arizona for six years running, and we feel very good about our chances for 2021. Expertise.com has also given us an A rating and consistently had us ranked among the top mortgage brokers in Phoenix, and we are rated among the top three mortgage companies in Tempe by Three Best Rated.

Online Reviews

In addition to awards and recognitions, check out their online reviews to see what other clients have to say about their experience dealing with the company. Google reviews are generally the best place to start as there are typically a higher volume of reviews, which can give you a better overall idea of what to expect if you choose to work with this company. For example, AZ Lending Experts has received over 200 reviews with an average five-star rating. You can feel free to read through these reviews and see what others are saying about us.

Local Presence

Should you work with a national lender, or should you work with a local home loan agency in Phoenix? Some consumers are under the mistaken impression that national mortgage companies (like the online outfits that advertise on TV all the time) will be able to get you a home loan for the lowest cost. But this is simply not the case.

A local lending specialist can give you the same market interest rate that a large national lender can give you. But when you choose a local specialist, you get numerous other benefits as well.

For one thing, a lending expert that is local to the Phoenix area understands the market here, and they also have relationships with reputable realtors, appraisers, inspectors, and other professionals who can help ensure that you close your loan on time and with as few hiccups as possible.

A local loan agency also has an in-depth understanding of Arizona state laws, lending guidelines, and the various programs that are available to buyers in the Phoenix area. You cannot necessarily expect a representative from a big national company to possess all of this knowledge and information.

Finally, local lending professionals are local to the area, which is important for a number of reasons:

  • Local lending experts live in the area and raise their families here. Like you, they are invested in the success of the local community.
  • You are able to meet with a specialist in person (or virtually during COVID-19 if you prefer), rather than talking to some random agent in a large call center. In addition, you will continue working with the same people as you progress through each step of the home loan process.
  • A local lending expert will go beyond just comparing interest rates and give you a true “apples to apples” comparison that is based on the overall cost of the loan.
  • Your local specialist will provide highly personalized service. They will take the time to listen and understand your needs, explain all of your options to you, and help you choose the right home loan program for your situation.

If you are looking at buying a house or refinancing your current mortgage, AZ Lending Experts is ready to go to work for you. Call us anytime or send us an online message with any questions you may have about Arizona home loans and/or to get started.

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