In Arizona, the primary vehicle for securing a loan made by a lender is a note and deed of trust. As a general rule, all loans in excess of 80% loan to value must be insured. The three primary insurers are conventional insurers, FHA and VA.

(A) Conventional insurance will cost from about 1.05% to 3/10 of 1% per year paid each month at 1/12 of yearly rate. Called "PMI." Origination fee is usually 1%.

(B) FHA - a cost 1/2 of 1% paid each month @ 1/12 of yearly rate. Called "MIP." Origination fee usually 1% plus about 1.5% for FHA fee. The maximum loan has been increased to $154,900.

(C) VA - no monthly fee after origination but must be an eligible veteran. Origination fee usually 1% plus a 2% or 3% VA fee.

Conventional Lenders:
There is a wide variety of loans available and they change almost daily. Most Buyers who have good credit find the most reasonable loan in a conventional loan. To move into a home, you should figure 2 to 3% cash needed to close in addition to the down payment. As an example, if you are buying a home for $200,000 and plan on putting $20,000 down, the loan would be $180,000. Therefore, you should allow up to an additional $6,000 for closing costs (3% of $200,000). This includes financing cost, escrow costs and prepaids (insurance and taxes).

It is always easier to work from an example. Below is an example for a $100,000 sales price. If you want to see the figures for a $150,000 with 10% down, just multiply all the figures under 10% by 1.5. For $250,000, use a 2.5 multiple. For $80,000 use a 0.8 multiple. Here is the typical chart: