How to Buy a House in Arizona: A Homebuyer’s Guide
Updated: March 17, 2024
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In Arizona, the average home value is $428K, which is roughly 10.6% higher than it was in the previous year. It is also significantly more expensive than the national average home value of approximately $358K.
Arizona monthly mortgage rates are mid-range in comparison to other states; on average, residents pay around $1,116 per month on a mortgage. Home value and mortgage rates aren’t the only factors to consider when deciding where to buy a home. The cost of living in your state of choice is also an important factor.
While the thought of purchasing a home may seem overwhelming, understanding the different steps involved can make the process smoother. In this guide, MoneyGeek lays out the essentials for Arizona homebuyers to expedite the homebuying process and avoid accruing unnecessary debt.
Choose an Ideal Location
Location is one of the most significant factors to consider when buying a home. Your ZIP code or where you choose to live can greatly impact your home and mortgage expenses as well as the cost of living.
For instance, in Phoenix, the average home costs approximately $409K, while the average home in Flagstaff goes for around $649K.
Since there is no “perfect” location, it’s also wise to consider your priorities and non-negotiables, like neighborhood culture, access to amenities and recreational activities and schooling options.
Calculate Mortgage Rates
Factors such as credit score, income, interest rates, loan type and size can impact the cost of your mortgage. To choose a suitable mortgage rate for your unique situation, it’s best to know your non-negotiables and balance these factors. Shopping around and comparing different lenders is also a smart way to find a great mortgage rate.
Prepare Down Payment Requirements
Depending on the mortgage type you choose, you’ll be required to make a specific downpayment. Conventional loans typically require a 20% downpayment while others, like a VA or USA loan, don’t require a downpayment. To get the best rate for your situation, you should spend some time researching which loans you’re eligible for.
Get Pre-Approved for a Mortgage
After you’ve chosen a mortgage lender, you can get pre-approved for a mortgage. Pre-approval offers you the opportunity to clarify any terms with your lender and make sure they align with your budget. Thus, it’s a very important step in the homebuying process.
Pre-approval isn’t the same as getting prequalified. Prequalification only gives you a ballpark figure for your loan. On the other hand, pre-approval subjects your application to a hard credit check, which will impact your credit score.
Conduct a Home Inspection
A home inspection is another key step in the homebuying process. Third-party experts can provide an in-depth rundown about the home’s current state and note any necessary repairs. This is usually paid for by the buyer, but the current homeowner may cover it in the closing cost.
Close Your Mortgage Loan
Once you’ve reviewed the terms of your loan, the next step is to close your mortgage. During this step, you may need to pay closing costs, but depending on your situation, these might be covered by a financial assistance program in Arizona. Keep in mind that you might also need to pay third parties for a pest inspection, legal work and more.
Arizona Homebuying Details
Along with general research, Arizona homeowners need to watch out for certain homebuying requirements specific to the state. We advise our readers to consult a real estate professional or their lender to help them with Arizona-specific requirements.
Although this isn’t required by law, the Arizona Department of Real Estate recommends homebuyers check the following before purchasing a home:
Environmental hazards
Harmful gasses or minerals such as radon and asbestos can negatively affect your health and home environment.
Expansive soil
This hazard can cause damage to your home’s foundation or basement.
Mold
Mold can produce toxic chemicals that pose a significant risk to human and animal health, especially to those with poor immune systems.
Seller's Property Disclosure Statement
Sellers are mandated by Arizona law to disclose all known facts about a property to buyers.
Termites
Although small, termites can damage the structure of your home. In extreme situations, termites can cause ceilings and floors to collapse.
Frequently Asked Questions About Buying a Home in Arizona
MoneyGeek answered the most commonly asked questions about how to buy a home in Arizona to help make the homebuying process smoother for you.
Purchasing a home is a monumental life event. Thus, you might want to ask yourself questions like:
- What is the best location that covers my non-negotiables and is within my budget?
- What type of mortgage am I eligible for and what rate can I afford?
- How much downpayment can I pay upfront?
If you’re confident that you can fulfill the responsibilities that homeownership entails, buying property in Arizona may be a good idea for your situation. In comparison to other states, the average monthly mortgage payment is relatively average.
The average value of an Arizona home increased by over 10% last year, which brings the average home cost up to $428K. If you’re on the fence about your decision, consider reaching out to a financial expert or mortgage lender to assess your financial capacity.
The amount of income you need to purchase a house in Arizona will depend on the cost of your home and the mortgage you get. Typically, you’ll need to have enough to cover a 20% downpayment on your home.
In 2022, the average property tax rates by Arizona county per $100 assessed amounted to about$10.48.
The cheapest cities in Arizona to live in are Bullhead, Surprise and Yuma.
sources
- Arizona Department of Real Estate. "Topics to Research Before Purchasing Real Estate." Accessed October 23, 2022.
- Consumer Financial Protection Bureau. "Get a Prequalification or Preapproval Letter." Accessed October 23, 2022.
- Consumer Financial Protection Bureau. "What Is Mortgage Insurance and How Does It Work?." Accessed October 23, 2022.
- Home Plus Arizona. "Home Plus Arizona." Accessed October 23, 2022.
- International Association of Certified Home Inspectors. "Home Inspection Standards of Practice." Accessed October 23, 2022.
- U.S. Department of Agriculture. "Single Family Housing Direct Home Loans in Arizona." Accessed October 23, 2022.