First time home buyers are always looking for steps to success. Realtor.com predicts Arizona home values will increase by 7% during 2021. The number of home sales in Arizona is also expected to rise in this year. As a first time home buyer those numbers may excite or discourage you. However, if you are well prepared you will be set up to secure your home purchase.
1.Money Talks – Know Your Finances
When you make the decision to purchase a home, the first step is a thorough analysis of your finances and credit history. A lender will evaluate your situation and determine what you can afford in terms of a mortgage. The lender typically gauges your ability to pay based in part on your credit history, income, and cash assets. Getting pre-approved for a loan can help you narrow down your house hunting and strengthen your bargaining position once you’ve found a home you want.
2. Find a Pro
A real estate agent will be your partner in the homebuying process and should do the heavy lifting and inform you so you can make a sound decision. Your agent should have a good understanding of the current housing market, know industry trends and which neighborhoods are up-and-coming. You should feel a solid connection with your agent, and they should understand and respect your homebuying goals. Online reviews can offer great insight into how an agent performs and if their clients are happy.
3. Know Your Needs
In Phoenix, you have many options. Different areas of the Valley offer unique characteristics, but first consider what is most important to your lifestyle – now and in the next few years. You may have interest in particular school districts, or a social lifestyle. Consider what would enhance your well-being and remember to reevaluate your list as you gain a better sense of what is out there and what you can afford.
4. Evaluate Mortgage Types
The choice between a fixed-rate and an adjustable-rate mortgage often depends on how long you plan to live in the home. A rate that is fixed may make more sense if it is relatively low and you plan to stay put for decades, since your monthly payment won’t change over the life of the loan. Adjustable-rate mortgages feature rates that can change periodically based on a market indicator and often carry lower rates and can make more sense for buyers who plan on a shorter stay in the house.
5. Consider the Big Picture
What you end up paying when you buy a home will be more than the down payment and the loan. There are likely to be closing costs, including loan origination fees, taxes, commissions, and legal fees. Asking your agent early in the process can help to uncover what exactly you will have to pay for. Down the road, you will also have to pay for repairs/improvements, insurance, and property taxes. Make sure to evaluate the big picture to decide whether you can afford the total cost of owning a home, not just the loan.
Buying a home can be one of the biggest financial decision you make. Preparing for the process is vital to making a good decision you’re happy with. Do your research, find a great agent, and your future home can be in your hands before you know it.
Written by: Wayne Graham, Homie Arizona
Wayne Graham is the Head of Real Estate from Homie Arizona. Homie is a real estate technology company changing the way real estate is bought and sold by eliminating high fees and commissions. To learn more, visit: www.homie.com.