AZ Mortgage Guide

Want to know how much home you can qualify for, What's the maximum mortgage amount you can get Approved, How much of a down payment is required, How much your monthly mortgage payment will be? You've definitely come to the right placeBelow are detailed answers to each question. 
How Much Can You Qualify For? 

There are three primary factors that determine how much mortgage you can qualify for:

  • Credit Score - Typically a 620 middle Fico score is required for a Conventional mortgage, but there are also low down payment mortgage loans that permit a 580 middle credit score. Conventional Loans require a 4 year waiting period after Bankruptcy discharge and 7 years after Foreclosure, while Government Insured Home Loans typically only require a 2 year waiting period after a Bankruptcy, and 3 years after a Foreclosure. Note, exceptions to these rules are few and far between, regardless of whether there was a divorce, job loss, or financial mismanagement.
  • Down Payment - Depending on your middle credit score, there are AZ mortgage loans that permit down payments as low as 1% down, 3% down, 3.5% down, and on up from there. Veterans & Active Military are often eligible for 0% Down VA Home Loans. 
  • Debt Income Ratio - Depending on the loan program you select, your total monthly debt obligations cannot exceed 43%, 45%, or 50% of your gross monthly underwritable income. Note, Arizona is a community property state, so a Non-borrowing spouse' debt obligations are used when calculating your debt to income ratio.

If you would like to determine how much home, and how big a loan you can qualify for in Arizona, give us a call now to determine the Maximum Purchase Price and Home Mortgage Loan You Can Qualify For: (480) 424-7144

How Much Is The Down Payment?   

The lowest down payment mortgage loan in Arizona is determined by your middle credit score. The 1.50% down payment loan requires a 640 middle credit score, while the 3% down payment loan requires a 620. There is also a 3.5% down payment mortgage loan that only requires a 580 credit score. These are the minimum required scores, and may require compensating factors for loan approval. Following are some of the  Compensating Factors underwriters consider when approving your Home Mortgage Loan:

  • Long-term Job Stability
  • Post Close Reserves 
  • Light User of Consumer Debt
  • Additional Income Not Used In Debt/Income Ratio
  • Minimal Increase in Monthly Housing Payment
  • Tax Free Income Like Social Security or Child Support
  • Strong Residual Income Exceeding 20% of Requirement
Acceptable Down Payment Funds are required to be sourced and seasoned for at least 60 days. Cash on hand aka "mattress money," is not an acceptable source of funds for your mortgage down payment and/or closing costs & reserves. Following are acceptable sources of funds for your down payment, closing costs, and post close reserves:

  • Checking & Savings Accounts
  • Liquid Investment Accounts Minus Capital Gains Taxes
  • Vested Retirement Accounts Minus 401K Loans - 60% of Balance For Reserves
  • Documented Gift Funds From A Direct Family Member
  • Funds From Sale of Prior Real Estate
  • Rental Security Deposit Refund, If Paper-Trailed
  • Sale of Personal Property via Bill of Sale & Cancelled Check

How Much Will Your Monthly Mortgage Payment Be?

Your mortgage payment is calculated based on your Loan AmountLoan Term and Mortgage Rate. Your mortgage payment also includes 1/12th of your County Property Taxes, and 1/12th of your Annual Home Owner's Insurance Policy Premium. Additionally, if you put less than 20% down when purchasing your AZ Home using a Conventional Mortgage Loan, then Mortgage Insurance will also be included in your monthly mortgage payment. Ask about our low down payment Conventional loans with Discounted Mortgage Insurance.

FHA Mortgage Loans always require monthly mortgage insurance, but there are some Conventional mortgage loans that do not require monthly mortgage insurance. If you are interest in removing your monthly mortgage insurance, than lender paid mortgage insurance options are often available, but typically cost .375% higher in mortgage rate. The Following variables are used to calculate your total monthly mortgage payment:

  • Principal & Interest Payment - Either use our mortgage payment calculator to calculate your monthly mortgage payment, or use the following rules of thumb:(Divide Your Expected Mortgage Loan Amount / 1,000 and then multiply that figure x $4.77 = Estimated Monthly Principle & Interest Mortgage Payment. 
  • County Property Taxes - Search your County Assessors website for a particular property annual tax bill and divide by 12 months. Otherwise estimate the property taxes as follows: (Purchase Price x .0078% / 12 months = Estimated Monthly Property Taxes. (Maricopa County Property SearchPima County Property Search)
  • Homeowner's Insurance - Estimate your homeowner's insurance as follows: (Home Price x .0035% / 12 months) = Estimated Monthly Hazard Insurance Payment.
  • Monthly Mortgage Insurance - Monthly mortgage insurance is very difficult to calculate, as it is based on your specific loan program, loan to value, and credit score. In general you can estimate your monthly mortgage insurance payment as follows: (Mortgage Loan Amount x .0085% / 12 months) = Estimated Monthly Mortgage Payment.   

If you would like to calculate your approximate monthly mortgage payment, we provide plenty of Mortgage Calculators for calculating your monthly mortgage payment, income tax savings, rent versus own analysis, and many other useful mortgage calculators. If you prefer to have us walk you thru your specific mortgage calculations, give us a call now, and we will walk you thru the figures. (480) 424-7144

What Are The Closing Costs?      

Mortgage Closing Costs are added to your down payment, and your mortgage escrow account, to determine your Total Cash Required To Close. The Property Seller will also pay separate title insurance and escrow fees. But Home Buyers are responsible for most of the closing costs related to Buying a Home in Arizona. 

Following is a list of Closing Costs typically paid by an AZ Homebuyer. These Buyer costs can also be paid by the Home Seller, but "Seller Paid Buyer Costs," will need to be negotiated in writing thru your Arizona Residential Real Estate Contract. Note, some Buyer Paid Closing Costs can also be paid by the Lender. Give us a call now to discuss Lender Paid Closing Costs(480) 424-7144

Bank Closing Costs

  • Appraisal Report - Typically $470 to $750 depending on the loan program and price of your home
  • Credit Report - $39 per borrower for a 3 bureau scored credit report. Additional fees may apply when supplementing the original credit report with a landlord reference, updated mortgage rating, or adverse credit accounts that have been recently paid off. 
  • Flood Certification Fee - $15 is a 3rd party fee charged to verify if property is located in a flood zone  
  • Tax Service Fee - $45 is a 3rd party fee required to obtain tax transcripts from the IRS, and administer property tax payments over the term of the loan. 
  • Underwriting Fee - $899 is a typical underwriting fee charged by a bank for underwriting your loan  
  • Processing / Administrative Fees - $45 is a cover all fee banks charge to cover misc. administrative expenses incurred while processing your loan.

Title & Escrow Company Costs

  • Title Insurance - Title company fees vary by Title Company, Property Type, and Loan Amount. Title Companies file their fee schedule with the State of Arizona thru AZDFI. Title Insurance charges typically cost from $699 to $1,250.  
  • Escrow Fees - Escrow fees are typically split between the home buyer and home seller, and cost $375 to $1,050 based on the purchase price and loan amount. Ask about potential discounts available. 
  • Recording Fees - Recording fees of $34, are charged by a Title Company for recording your mortgage Deed of Trust at the County Recorder's Office.
  • Title Endorsements Fees (EPA, ARM, PUD, CONDO) - Title companies charge endorsement fees for adding additional title insurance coverage to their standard coverage. These endorsements range from $25 to $75 per endorsement, and help to reduce the additional risk.   
  • Courier or Overnight Delivery Fees - Courier fees of $35 are often charged by a Title Company for transporting loan documents from their office to the signing, and then back to their office. These fees also cover any payoffs that might be required. 
  • Closing Protection Letter (CPL) - Lenders usually require Title Companies to provide a $25 CPL fee to indemnify the lender from potential losses associated with certain types of closing agent misconduct.

What's Is An Escrow Account?           

Most Arizona Mortgage Loans Require An Escrow Account Property Taxes, Homeowner's Insurance and Flood Insurance, if required. The escrow account also includes prorated interest from the day you close escrow, until the end of the month. For example, if you close on the 20th of the month, there will be 10 or 11 days of prorated interest due. If you close on the 10th of the month, there will be 20 or 21 days of prorated interest due except if your closing date is in the month of February.

An escrow account is setup by a mortgage lender to ensure your property taxes and homeowner's insurance are paid when due. Following is an example of escrow charges that will be collected by your Title Company's Escrow Officer, when you close your purchase or refinance loan in Arizona:

  • Homeowner's Insurance Policy - You will select and negotiate with the homeowner's insurance company who will insure your property should damage occur. Hazard Insurance policies typically cost between $750 to $1,200 per year. You will be required to pay for your 12 month insurance policy at closing, plus two months' insurance will be collected for your escrow account. Then you will pay 1/12th of the cost of your annual homeowners insurance bill, as part of your monthly mortgage payment. That way you will have 12 months of homeowner's insurance plus a 2 month cushion when your insurance is due 12 months after you close on your new home.    
  • Property Taxes - Property taxes are also collected and placed in your escrow account, when you buy a home in Arizona. Lenders will collect the the equivalent of 3 to 4 months of property taxes, so that your escrow account will have the 6 months property taxes, plus a two month cushion, each time your semi-annual property tax bill becomes due. To review a specific semi-annual property tax bill, visit the County Recorders Office online, or in person.   
  • Aggregate Adjustment - There is also a small aggregate adjustment that is calculated by the bank computer system. The aggregate is a small credit that will be subtracted from your total escrow account due, based on the congressional legislation.

What's The Next Step    Mortgage Prequal

Pick up the phone and call Arizona Central Mortgage Now (480) 424-7144. One of our mortgage specialists will help you determine which home loan is best for you. You will be asked a series of brief diagnostic questions about your debt, credit income and savings, that will determine what mortgage options will help you to best Accomplish Your AZ Home Buying Needs. Then you will receive a mortgage prequalification letter that will strengthen your home-buyer negotiating position, when purchasing Your AZ Home.

If you are already shopping for an AZ Home, we can assist you with a Fast, Automated Preliminary Mortgage Approval for a Conventional, FHA, or VA Home Loan. The preliminary mortgage approval process typically requires the following supporting financial documents:

1. 30 days recent consecutive Pay Stubs
2. 2017 & 2016 W2's, 1099's, or K1's
3. 2 most recent consecutive Bank Statements all pages
4. 1 quarterly retirement or Investment Account Statement if applicable
5. Current Awards Letter if using social security or disability income
6. Tax Returns w/ all schedules, if using self employment or Commission income 
7. $39.00 credit card authorization for 3 bureau scored mortgage Credit Report

We will then run your preliminary mortgage approval thru our FNMA, FHLMC, FHA or VA automated underwriting engine, which will take 24 hours or less to complete, from the time you provide your financial documentation. Then you will receive your written preliminary Mortgage Loan Approval Letter, or we will call you to review additional items required to procure your Preliminary Mortgage Approval.

Once you have an approved Home Purchase Contract, we will update your loan application and miscellaneous disclosure forms, and quickly move your file to underwriting, for your complete underwritten mortgage approval. At that point, the underwriter will likely have a couple of questions and/or additional requests. We will work with you closely throughout the Mortgage Approval Process, to ensure Your Home Loan is Approved quickly and efficiently.

Why Arizona Central Mortgage?


  • Low Mortgage Rates
  • Low & No Cost Home Loans
  • Fast Loan Approvals
  • Flexible Mortgage Loans
  • We Go The Extra Mile For You

Call For A Prequal Letter:
(480) 424-7144

Basic Pre-Approval

Get the Best Mortgage Rate! Tell us a little about your current needs and we can use that information to match you with just the right loan.

Tell us about your loan needs.
How can we get in touch with you?
Tell us about your credit history.