Tips for Buying Your First House in Arizona

Tips for Buying Your First House in Arizona

August 12, 2022 Off By Ariana Rogers

Tips for Buying Your First House in Arizona

For someone seeking to buy their first home in Arizona, you can be overwhelmed by the many decisions you have to make. Arizona’s cost of being a homeowner has significantly increased over the years. Despite this rise in the price of homeownership, construction of new homes is still in demand in Arizona. If you want to venture into real estate in Arizona for the first time, follow the tips herein to help you navigate successfully.

  1. Have a Good Credit Score

When purchasing a home, you will probably take out a loan to finance the purchase. Lenders may not advance you the loan if you have a credit score below 620; you may even not get a mortgage. Start to work towards raising your credit score by paying your loans and making regular payments on credit cards. Also, regularly review your credit history to pick up any mistakes on time.

  1. Be Ready with a Down Payment

A down payment is the first part of your home’s buying price at closing. Your mortgage lender pays the remaining balance. Usually, in Arizona, mortgage lenders require a down payment of 20% of the buying price. But, you have the option of lowering the down payment amount. Government-backed loans, such as FHA and VA loans, require a down payment of 3.5% and 0%, respectively. Traditional loans also ask for down payments as little as 3%-5%.

However, you should know that a down payment of less than 20% has some risks. This is because a small down payment means you’re borrowing more money; hence you will pay a higher monthly fee and higher interest on the entire loan.

Mortgage insurance is another requirement when buying a home in Arizona. Traditional loans attract private mortgage insurance (PMI) until you attain an 80% loan balance on the buying price. On the other hand, FHA loans attract a mortgage insurance premium (MIP) during the loan’s lifetime.

  1. Hire an Experienced Realtor

Working with an experienced real estate agent is another essential step when buying a home. A real estate agent understands the market well and can be useful in helping you discover newly listed homes. Furthermore, realtors closely work with housing loan lenders in Arizona, which means that you will receive guidance when seeking a home-buying mortgage. Your real estate agent acts as an advocate during the whole process of home buying in Arizona. Collaborating with your agent to help them find a suitable home for you is essential.

  1. Apply for Mortgage Preapproval

Before you start the search for a home in Arizona, it is fundamental to get a mortgage pre-approval. The pre-approval will help you understand the mortgage rate you can manage, including your preferred price range. Also, a mortgage pre-approval shows property sellers your seriousness in becoming a homebuyer.

  1. Set Minimum Standards

When looking for a new home, pay attention to the structural parts with an emphasis on the bathrooms, kitchen, electrical, plumbing, central air system, furnace, windows, and roof. Remember that you can make cosmetic changes such as decks, fences, landscaping, paint, flooring, and light fixtures to meet your style but those that can’t be changed should be selected keenly.