Arizona has experienced a population boom recently, becoming among the fastest-growing states in the country. Of course, an influx of people means an increase in home purchases and competition. No need to sweat, we’ve got you covered. Here’s what to consider when buying a home in the Grand Canyon State.

Scope Out Your Situation

The first action item on your journey to becoming a homeowner should include gaining a clear understanding of your financial situation. These days, the closing process moves fast — and unless you’re planning to pay in cash when you make your offer, getting pre-approved for a mortgage can put you in a better position to act quickly.

Before you start your search, be sure to boost your familiarity with the factors that can make or break the buying process:

Credit score

Credit Reporting Agencies (CRAs) will collect and maintain information for your credit reports. Your history of repayment, credit utilization, and other financial information will affect your overall credit rating. Your banker will use this score  to help determine your capacity to repay the loan.

Debt-to-income ratio

The percentage of your gross monthly income that goes to paying down your debts.

Down payment

The amount of your home’s purchase price that you pay upfront when you close your home loan. A twenty percent down payment is usually preferred, but every lender is different, and homebuyers have more down payment options than ever.

Closing costs

These are the fees and expenses needed to finalize a mortgage. They usually include things like title insurance, attorney fees, taxes and more. On average, they cost the buyer between 2 and 5 percent of the home loan amount.

Plan Accordingly

Buying a home in a seller’s market, as is currently the case in much of Arizona, is a climate that rewards preparedness. The more boxes you have checked before you begin your home search, the less likely you are to be frustrated by the process or miss an opportunity.

Include these four steps in your home buying plan to win in a seller’s market:

Get pre-approved for a mortgage

Get a clear picture of your finances and get ahead of the game with a mortgage pre-approval. Check products/credit-loan/mortgages for the latest rates.

Find your ideal neighborhood

Arizona is full of neighborhoods with character and a lot to offer, particularly for young professionals, creatives and families. Think about targeting your search to up-and-coming communities in Chandler, Gilbert, Tempe and Scottsdale.

Get an agent

A licensed real estate agent can make navigating the home search and buying process easier. Find someone who has experience working in your price range and in the neighborhoods you love.

Know what comes next

You found your dream home — what’s next? Now, you make an offer. Having an offer plan in place before the house hunt can set you up to move quickly when you find the right one.

Search Online

Many things about the home buying process changed with the pandemic. You may not always be able to view a home in person due to social distancing measures, but tools like Redfin, Zillow and Realtor enable buyers to view homes online — and digital home tour capabilities have improved significantly over the years. In some cases, you may be able to get a complete 360-degree view of the entire house. 

Be sure to sign up for listing updates so you can be among the first to see new homes for sale in your target neighborhoods. And write down any questions for your real estate agent that pop up as you conduct your online search.

Hit the Streets

Finding the right home takes footwork. You’ll have to get out there and evaluate your options realistically. That means taking stock of your current situation and future goals. It also means  understanding the difference between your must-haves and nice-to-haves. As an example, proximity to parks and playgrounds might be a higher priority for growing families than for urban professionals.

Getting to know your future neighborhood is well worth the effort it takes to hit the streets — it’s the best way to get a real feel for what living there would be like. Different neighborhoods appeal to different lifestyles, so it’s important to immerse yourself in them to figure out what feels right for you. For instance, Phoenix’s Roosevelt Row Arts District, or RoRo, as it’s affectionately called, is a creative haven filled with galleries, boutiques and trendy eateries straight out of La Boheme. In contrast, Paradise Valley, with its multi-million dollar homes, golf courses and spas, has been dubbed the “Beverly Hills of the Southwest.”

Arizona is full of up-and-coming and well-established neighborhoods that could be the perfect fit for you. Trusting your real estate agent to guide the search — and allowing yourself to be surprised in the process — could turn up some absolute gems.

Anticipate the process

The home buying process doesn’t end after your offer is accepted. In fact, it can take up to 50 days to close on your new home after the offer is accepted. You’ll likely need to arrange for a home inspection and your lender will order an appraisal. There’s also the matter of finalizing financing. You may have entered the buying process with a mortgage pre-approval, but an underwriter still has to approve the loan.

Buying a home is a long process, but it’s worth it. Keep exploring our blog to find out all the need-to-know tips  when buying during COVID-19, what can make or break your mortgage and more. Banking for good means a lot of things at FirstBank, and helping you own a home you’re proud of is one of them. Contact a mortgage loan originator today to talk through your options.

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