There arenât many things more satisfying than owning your own home. And if youâre moving away from the house you grew up in, or moving out of state for your retirement â you can look forward to a change in your lifestyle and a brand new social life. As interesting as all of this is, however â buying a home in Arizona isnât a simple process, nor something you should get into lightly. Weâll explore the basics of the entire home buying process below, so stay tuned!
Credit Scores
Hereâs something you need to take care of before you look at real estate agencies or listings. The credit score youâve got will severely impact your ability to buy the home youâre after. Bear in mind that even minimal reductions can be the tipping point between denial and approval.
If you find that youâre not satisfied with your credit, donât despair. There are ways to increase your mortgage scores in a short time period. And this doesnât just affect whether youâll receive approval or not, but also the terms and rates you can expect from lenders.
With this in mind, take a step back and avoid opening any new lines of credit. Before you tackle closing the previous ones that you can, try to reduce your credit utilization. This is a percentage-based score thatâs calculated by dividing your current debt by the overall credit limit you have. See if there are any late payments you neglected to take care of â pay these right away.
Learning The Local Market
Many people decide on buying a home in Arizona even if theyâre not from around here. The reasons for that are two-fold; first, this is a relatively popular retirement state, and second, the real estate market is generally affordable. If you decide to forgo urban areas for the countryside, you can find some of the cheapest quality homes in the entire nation.
Before you consider moving from a nearby state, like Colorado, you should consider the budget for home purchasing that you can afford. Once youâre certain of your price range, you can begin looking at listings. When you settle on your lender of choice, try to get a letter of pre-qualification. This will give you a rough idea of the houses you can actually afford, and leave you with more leverage over sellers.
Real Estate Agents
When youâre buying a home in Arizona, itâs important to cooperate with professional real estate agents. If youâre certain of your budget, your mortgage scores, and you have chosen a lender â you need to cooperate with a good real estate agency as well. These agents will be your biggest allies and a professional voice for your side of the transaction.
The realtorâs job is to aid you in finding the best listings, and presenting an offer to potential sellers in your name. Before all of that, you need to speak with your real estate agent so that theyâre aware of your priorities when it comes to buying a home in Arizona.
If you can, list out the neighborhoods youâd prefer, as well as deal-breakers and must-haves for your dream home. That will allow the real estate agents to streamline the home viewing process, by filtering out the homes you probably wouldnât opt for.
Once youâve found a home to your liking, make sure that you hire a home inspector to check for any fundamental issues and structural flaws. Then, have your real estate agent communicate with the seller to see if theyâre willing to make any needed repairs.
Picking a Lender
If you have not done so already, make sure to choose the right lender before buying a home in Arizona. This is crucial to getting the best possible rates; donât settle for the first offer you encounter. Instead, shop around and find out if there are lenders with more agreeable terms.
Legally, you have a month to present applications with multiple lenders before this negatively impacts your overall credit score. With that in mind, plan out the time for getting different rates, and give yourself enough time to decide on a broker or mortgage bank that will serve you the best. Decline all of the other offers within the month, and your credit score will remain unchanged.
Once that is done and your lender has all of the required information, theyâll be able to process your mortgage. The âunderwritingâ, as it is often referred to, may take a while to complete; the average time for Arizona is between a month and a month and a half.
In the meantime, itâs crucial to not make any large purchases using your existing credit lines. This can delay the whole underwriting process, eventually even costing you a dream home. Hold off any big buys before the closing day.
Closing Day
When you learn about the approval of your loan, your mortgage will be ready. There are some closing fees to take care of as well, which the lender will notify you of in advance.
This closing disclosure form essentially serves to show you the amount of money you need to actually close the home. Typically, people use certified checks or a simple wire transfer to pay for these.
Once all of the paperwork is signed, both parties will check if the money has gone through. When that is completed, thereâs nothing left to do but to enjoy your new home! While all of this can seem arduous, the process is well worth it. The reason why itâs so complex is so that all parties involved can do all of their due diligence and be certain of the validity of the deal. At the end of the day, itâs better to be safe than sorry!
