Arizona is a great place to live because of its warm weather, natural beauty and friendly people. The Grand Canyon State has beautiful lakes, neighboring mountains and offers affordable homes for families. But, like in most parts of the country, some homeowners in Arizona are also struggling with mortgage payments and sinking home values. In the last few years, banks have tightened their purse strings and have become stringent on the loan approval process. So, what should you do if you are shopping for mortgages in Arizona now?
“It’s not very hard for first-time buyers to get a loan with 20 percent down payment, said Teri Ellis, broker for Homes Arizona Real Estate LLC. “There are a lot of homes in the market within the $80,000 to $100,000 price range,” Ellis said. “Depending on what you want, you could have a monthly payment of $600.” That’s cheaper than what you would pay for rent, according to Ellis.
Attractive home prices combined with low mortgage rates may be enticing to many buyers, but before you jump on the loan-hunting wagon, set your priorities right. Figure out what you want and how much you can afford. Here are a few tips from Ellis.
6 Steps to Buying in Arizona & Getting the Mortgage You Want
Choose the area: If you are not too picky and can adjust to life outside the metro area, you may get a better deal on homes, Ellis said. Outlying areas such as Mesa and Gilbert are more affordable, she said. “There are a lot of new families in these areas, and there are a lot of newer communities and schools,” she said.
Decide on the kind of house: You can get a nice home for $100,000, Ellis said. But, if your budget doesn’t allow that, you may want to look into properties that need a little bit of fixing. Homes with small kinks and dents can go for $60,000 to $80,000.
Find a good real estate agent: Ask friends and family for recommendations and interview a couple of real estate agents before hiring one. You would want an agent who has a good loan officer on his or her team. Always go with a loan officer recommended by your agent, Ellis said. “We know what they can do, and if they tell us they can do it, then they can do it,” she said. “I don’t recommend doing things online.”
Strive for a good credit history: Your credit score will help or ruin your chances of getting a loan. So, make your payments on time and don’t use up all your credit. Always try and maintain half of the total credit you are allowed to use. Never close your credit cards because they disappear from your history if you cancel them. Always pay a little more than the minimum due to bring up your credit score. If you are planning to buy a house, don’t invest in that new car or borrow money for some other expensive purchases. That would put you out of range to qualify for a loan, Ellis said. Creditors look for the debt-to-income ratio and they are particularly picky about loan approvals these days, Ellis said.
Look for a home that fits your budget: Find a price that’s comfortable for you. Especially for first-time buyers, investing in property is a huge event, Ellis said. Work with someone who will help you calculate your finances and advise you on what would be a comfortable mortgage payment.
Hire a home inspector: It’s better to have a pair of professional eyes examine the home for any defects or maintenance problems. The money you spend on an inspection could save you a lot more in the long run.