What are the Jumbo Loan Limits for 2022 in Arizona?

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What are the Jumbo Loan Limits for 2022 in Arizona?

If you are looking to finance a property worth more than the conventional loan limits in Arizona, you may look into jumbo loans to provide you with the funds to cover the purchase of your home. The limits for jumbo loans vary among lenders. A jumbo mortgage limit is not the same as FHA loan limits or conforming loan limits set by Freddie Mac or Fannie Mae guidelines.

 

Aside from providing information about the jumbo loan limit Arizona has available, we also advise about how to get construction loans Az and learn more about Arizona VA home loans. Learn more from the most dependable experts on Jumbo Loans Arizona has available.

The Three Primary Mortgage Loan Options Available To You in Arizona

To better understand the definition of limits, let us first discuss the three main types of mortgage loans available for homebuyers in Arizona today.

FHA Loans:

An FHA loan is a specific mortgage loan insured by the Federal Housing Administration. FHA loans allow low-to-moderate-income earners to take out a housing loan. It is less stringent to qualify for FHA loans based on credit scores and down payments than conventional loans. If you have a credit score above 580, you can borrow as much as 96.5% of the home value with a down payment of only 3.5%. However, if your credit score is under 580, you will need to pay a 10% down payment. The FHA loan limits are set at between $420,680 and $441,600.

Conventional Loans:

To distinguish a conventional loan from a jumbo loan, let us focus on conforming conventional loans. These types of loans are not backed by the Federal Housing Finance Agency (FHFA) or any state or federal government agency. These types of loans follow the rules set by Freddie Mac (Federal Home Loan Morgage Corporation) and Fannie Mae (Federal National Mortgage Association). These loans are extended by financial institutions such as banks, credit unions, or mortgage lenders. Lenders would typically set a minimum credit score of 620 for you to qualify for a conventional loan. Your interest rate will depend on the risk you present. If you have a higher credit score and an excellent debt repayment history, you can get better loan terms. The FHFA sets a loan limit of $647,200 for Arizona.

 

Jumbo Loans: These are discussed further in the next section. Unlike conforming conventional loans, jumbo loans do not follow the rules set by both Freddie Mac and Fannie Mae. These, in theory, have no loan limits. If you qualify, you can take out a jumbo loan as much as thrice the current conforming loan limit.

What is a Jumbo Loan?

A jumbo mortgage is when you seek to purchase a family home that is valued way above the conventional loan limits. In theory, there is no loan limit on a jumbo mortgage. That is why jumbo loans are called non-conforming loans. Since it does not follow the guidelines set by Fannie Mae or by Freddie Mac, financial institutions are not protected from default, unlike a conventional mortgage. Instead, lenders set more stringent qualification requirements for borrowers. The jumbo loan limit varies from lender to lender. The maximum loan amount depends on your unique financial situation. For instance, for jumbo loans amounting to less than $2 million, the maximum debt-to-income ratio requirements placed by most lenders are at 45%, and they will require a down payment of 10%. If you want to take out a loan of over $2 million, then your credit score requirements will be stricter than you would expect when you take out a conventional mortgage, and the down payment requirements will be in the 20% to 30% range.

Takeaways: Let us be your Mortgage Team!

Our Jumbo Loan Rates Are Low & Our Process is Quick & Painless

Valor Mortgage is here to make the jumbo home loan process much easier for you with tools, experience, and the expertise that will help guide you along the way, starting with our FREE Jumbo Loan Qualifier.

 

Valor Mortgage will help you clearly see the differences between loan programs to make it easier to choose the best one for you, whether you’re a first-time homebuyer or a seasoned investor.

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