Mortgages From Top to Bottom

Common questions

What loan type is best for first-time buyers in Arizona?

It depends on your credit, savings, and income. FHA is common for buyers with lower down payments or credit scores that need flexibility. Conventional works well for buyers with stronger profiles. Down payment assistance programs in Arizona often pair with specific loan types. Talk to a lender who works with all of them.

How many lenders should I talk to before choosing one?

At least two, ideally three. Compare Loan Estimates side by side. Rate matters, but so do fees, timeline, and the lender's responsiveness when a problem arises at 4pm on a Friday.

What is a discount point and should I pay one?

One point equals one percent of the loan amount paid upfront to reduce your interest rate. Whether it makes sense depends on how long you plan to keep the loan. Calculate your break-even: how many months until the monthly savings offset the upfront cost.

Can I use VA benefits more than once?

Yes. VA loan entitlement can be restored after a prior VA loan is paid off, or in some cases used simultaneously with remaining entitlement. Talk to a VA-specialized lender for your specific situation.

How much of a down payment do I actually need?

Less than most buyers assume. Conventional loans can go as low as 3 percent down, FHA is 3.5 percent, and VA and USDA can be zero down for those who qualify. Twenty percent avoids mortgage insurance, but it is not required to buy. Your lender confirms the exact figure for your loan and price point.

What are closing costs, and roughly how much are they in Arizona?

Closing costs are the lender, title, escrow, appraisal, and prepaid items due at signing, separate from your down payment. They commonly land in the low single-digit percentages of the purchase price. In Arizona I can often negotiate a seller credit toward them, which is one of the levers I use for you at the offer stage.

What is the difference between pre-qualification and pre-approval?

Pre-qualification is a quick estimate based on what you tell the lender. Pre-approval is deeper: the lender verifies income, assets, and credit and issues a letter that sellers take seriously. In this market you want a real pre-approval before we write offers, and I will tell you when it is time to get one.

What credit score do I need, and what if mine is not great?

Different loan types have different thresholds, and government-backed loans tend to be more flexible than conventional. A lower score does not automatically rule you out, though it can affect your rate and mortgage insurance. A good lender will tell you where you stand and, if useful, give you a short list of moves to improve it. I can refer you to lenders who do that well.

What is PMI, and how do I get rid of it?

Private mortgage insurance is an added cost on conventional loans when you put down less than 20 percent. It protects the lender, not you. On conventional loans it can usually be removed once you reach enough equity through payments or appreciation. FHA mortgage insurance works differently and often stays for the life of the loan, which is one reason to compare the two. Your lender confirms the specifics for your loan.

What is an escrow or impound account, and is it required?

An impound account lets the lender collect your property taxes and insurance monthly and pay those bills for you, so they do not hit all at once. It is commonly required when you put down less than 20 percent. Your monthly payment then includes principal, interest, taxes, and insurance.

Is earnest money the same as my down payment?

No, but it is not money lost either. Earnest money is a good-faith deposit, often around 1 percent of the price in this area, that goes into escrow when your offer is accepted and then applies toward your down payment or closing costs at the end. With the right contingencies it is protected if the deal falls apart for a covered reason. I walk you through those protections before you write the check.

What is a rate lock, and when should I lock?

A rate lock holds your quoted rate for a set window while you close, so a move in the market does not change your number mid-transaction. Timing and float-down options are a lender conversation, and I do not forecast rates. What I make sure of is that our contract timeline and your lock window line up so nothing expires at the wrong moment.

What is a buydown, and who pays for it?

A buydown lowers your interest rate temporarily or permanently. A 2-1 buydown, for example, reduces the rate for the first two years and then steps up to the note rate. It is often funded by a seller or builder credit, which makes it a negotiation item. In slower stretches a seller-paid buydown can lower a buyer's early payments, and I will tell you when it is worth asking for.

How do my other debts affect what I qualify for?

Lenders look at your debt-to-income ratio, which compares your monthly obligations to your gross monthly income. Car loans, student loans, and credit cards all count. Paying down the right balances before you apply can change what you qualify for, so ask your lender which ones move the needle before you pay anything off.

Can my down payment be a gift?

On most loan types, yes, a gift from an eligible source is allowed with the right paper trail. Lenders require a gift letter and documentation of the transfer, and the rules vary by loan type. Tell your lender early if gift funds are part of your plan so it is handled cleanly.

Are there down payment assistance programs in Arizona?

Yes. Arizona has state and local programs that help with down payment or closing costs, and they pair with specific loan types and income guidelines. Availability and terms change, so a lender who actively works with these programs is worth finding. See my down payment assistance guide for the landscape, then confirm current details with a lender.

What documents will the lender ask me for?

Plan on identification, recent pay stubs, the last two years of W-2s or tax returns, recent bank and asset statements, and details on your debts. Self-employed buyers usually provide more on the business side. Gathering these early is the single easiest way to keep your closing on schedule.

How much house can I actually afford?

Two different numbers matter: what a lender will approve, and what payment you are comfortable living with. They are not always the same, and I encourage buyers to shop under the max. Run the numbers with a lender and use my affordability calculator to sanity-check the monthly payment before we start touring.

Does talking to several lenders hurt my credit?

Rate shopping in a short window is generally treated as a single inquiry by credit scoring models, so comparing a few lenders is expected and low impact. The bigger risk is not shopping at all and overpaying on fees. Get Loan Estimates from a couple of lenders and compare them line by line.

Can I get a mortgage if I am self-employed?

Yes, it is routine, though the documentation is heavier. Lenders typically want two years of tax returns and look at your net income rather than gross revenue. Some portfolio and non-traditional programs exist for buyers whose returns do not tell the whole story. A lender experienced with self-employed borrowers makes this far smoother.