Arizona Mortgage Calculator

How do I calculate my mortgage payment?

The most convenient approach to accomplish this is by utilizing our calculator. Our calculator operates on a straightforward equation that you can also employ manually to compute the payment amount:

M = P*i(1 + i)^n / (1 + i)^n – 1

M – estimated monthly mortgage payment;

P – principal;

I – monthly interest rate (to determine this, divide your annual mortgage rate by 12);

N – the loan term expressed in months (in other words, the total number of monthly payments)

Let's imagine you are applying for a 15-year mortgage loan with a fixed APR of 6.99% (equivalent to .0699 as a unit fraction). The property has a price tag of $500,000, with a 10% down payment of $50,000. As a result, the principal amount (P) will be 90% of the initial home cost ($500,000 – $50,000 = $450,000).

I = .0699 % / 12 = .005825%.

Lastly, let's convert the loan duration from years to months: N = 15 * 12 = 180.

M ($) = 450,000*.005825(1 + .005825)^180 / (1 + .005825)^180 – 1 ≈ 4042.

Hence, you will be making an approximate monthly payment of around $4042.

It is important to note that the calculated value of M is an estimation and does not account for any additional fees.

Tips for first-time home buyers in Arizona

At the outset, multiple federal agencies (USDA, FHA, and VA) guarantee loans for chosen borrowers, offering a range of options tailored to the needs of first-time homebuyers, aligning with their budgetary constraints.

Aside from these government-backed programs, it is prudent to explore the opportunities provided by UHC (Arizona Housing Corporation) to residents of Arizona. Specifically, individuals embarking on their first home purchase can consider applying for the FirstHome program, a down payment and closing costs assistance initiative, subject to meeting the eligibility criteria of an FHA loan and a FICO score of at least 660. This avenue provides coverage for up to 6% of the loan amount to be used for the down payment and/or the closing costs, in the form of a second loan with a fixed interest rate over a 30-year term.

If you do not meet the requirements for the FirstHome program, there is no need to despair. There is an alternative program known as the Arizona Housing Score Loan, which covers up to 4% of the loan amount. A minimum satisfactory credit score of 620 is necessary to qualify for this option.

Essential pointers for first-time individuals:

1. Secure pre-approval in advance. This step will enhance your creditworthiness in the eyes of home sellers. It is highly recommended that you get pre-approval letters from at least two or three different lenders, not just one.
2. Compare varying mortgage rates. Opt for at least three lenders. The more options you assess, the better.
3. Conduct initial calculations based on the approved amount. Strategize your forthcoming expenditures.
4. Allocate as much as you can for an initial payment – and do so as early as feasible. The down payment will reduce the principal sum, consequently minimizing potential expenses. Hence, commencing saving ahead of time is crucial.
5. If you meet the requirements for a VA loan, prioritize this alternative above all others.
6. Explore government-backed initiatives and local aid programs. Tempting opportunities may arise – seize them without delay.
7. Repay any outstanding debts, if feasible.

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