Steps To Buying A House In Arizona
When looking to buy a house in Arizona there are a few things you will need to know before you start house hunting.
Buying a house can be an exciting time, but also stressful with all that goes into purchasing a home. Here are a few steps to take before even stepping foot in a home that is for sale:
1. Determine Your Budget
It is important that you discuss and map out the budget you have to spend on a home. This is critical because you do not want to get stuck with a home you cannot afford later down the road. Map out a budget for any situation that may happen. You don’t want to end up with a beautiful home that you can only afford if you don’t enjoy anything else life has to offer. You also need to be prepared for situations like a layoff or unexpected expenses.
2. Know Your Credit Score
Knowing your credit score can determine whether or not you are approved for a loan. It can also impact other aspects of your home loan like interest rate, the type of loan you qualify for, and more. If you know your credit score is below average, take steps to improve your credit score and delay your home purchase. A low credit score can mean that you may not get approved for a mortgage or require you to have a higher interest rate or down payment.
3. Know How Much You Will Need For A Down Payment
By now you have determined a budget that you are able to spend. When determining a down payment, usually banks and lending groups require a 20% down payment. If you buy a house for $100,000, a 20% down payment would require the seller to put $20,000 down. The money from a down payment comes from your own savings or proceeds from a previous home sale. Different loans require different minimum down payment, so make sure you find out the specifics of each loan.
4. Gather Important Documents Needed For Mortgage Application
There are 3 main documents that you need for a mortgage application. Some lenders and banks will require additional, but gathering these before can help. You will need proof of your identity (i.e. passport or driver’s license), your two most recent pay stubs from your employer, and copies of your tax return and W-2s for the past two years.
5. Get Pre-approved For A Mortgage Before House Hunting
Finding the perfect house for you and your family can be an amazing feeling, but you don’t want to find that perfect house if you won’t be approved for a mortgage. Most real estate agents won’t even take you house hunting until they have a pre-approval letter from your lender. Being pre-approved allows you to find the house of your dreams in the budget you can afford without worrying about whether or not you will be approved. Granted, you will still have to go through underwriting after you’ve placed an offer, you can rest assured that you’ve done most of the leg work!
6. Determine Your Wants vs. Needs In A House
It can be very exciting to see home improvement shows and Pinterest boards with your dream houses. Make sure before you start house hunting that you separate your wants and from your needs. Determine what is truly a want and what is a need. For example, are you sure you want the largest house on the block? Do you really have the time for a fixer upper or will you forever be living in an ongoing project? Is that pool actually practical for your budget or safe for small children? That large blank slate yard, do you have the funds to landscape it to HOA standards? Make sure you do your research and ask yourself the tough questions before placing an offer.
If you have any questions about mortgage loans or payments, talk to one of our lending experts at Galaxy Lending Group. We will inform you on all mortgage loans as well as the different options that you have. Call us today 602.595.1233!