The only thing certain in the real estate lending business is change. Market values and interest rates go up and down, regulations change. All real estate is local, we say, so finding a trusted advisor who knows our market is essential. Lucky for you, Sierra Vista has many amazing lenders.

Overview of steps to finance a home purchase

*Pre-Qualify with loan officer: your credit, income, and debt will be reviewed

*Determine your price range and type of financing

*Find a home with a realtor and submit an offer

*Once under contract, submit loan application right away

*Order appraisal of home

*Follow through on any requests by the underwriter to get approval of loan

*Loan approved and closing loan documents ordered

*Sign closing documents and record on your home!

It sounds too easy, doesn’t it? The tough part is deciding which loan program to use. There are government options: FHA, VA, and USDA; and conventional options: Fannie Mae and Freddie Mac. Deciding this upfront helps you weed out the properties that won’t fit with the loan.

Overview of lending programs

FHA financing requires 3.5% down payment and there will be primary mortgage insurance (PMI) for the life of the loan. The price limit for Cochise County is $271,050. Lower credit scores are acceptable making this an option for a larger pool of buyers.

VA financing offers 100% loans for eligible active duty military, veterans, and surviving spouses. Maximum zero financing is $417,000, and property must be owner occupied. VA has a funding fee, but no mortgage insurance.

USDA financing also offers zero down payment with a maximum loan of $417,000. This program is intended for rural areas and Cochise County has many eligible areas. Borrowers can only own 1 home and it is income restrictive, meaning that a household with 1-4 members cannot exceed $75,650 in annual income.

Conventional financing is Fannie Mae and Freddie Mac and has a max loan limit in our area of $417,000. This financing requires 3-5% down payment. PMI will be required on loans unless 20% is put down. The good news is PMI is not for the life of the loan. Once the borrower has paid on at least 78% of the original loan balance, PMI goes away. Conventional financing requires stricter underwriter guidelines.

Overall, my recommendation is to consult with a loan officer early on to see which program fits best for you. It is still a great time to buy as interest rates and market values in Sierra Vista are historically low. Be sure to ask the loan officer about the HomePlus and Pathway to Purchase programs going on right now. You could reap the benefits for years to come.

A special shout out to Leslie Thomas at Nova Home Loans for providing information used in this article.

About the Author

Katherine Mullen is a licensed Realtor with Tierra Antigua Realty and a member of Southeast Arizona Association of Realtors. Visit for more info and search the MLS.

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