Common Myths Among First-time Buyers in ArizonaMarch 23, 2023 by X2 Mortgage
Debunking 4 Common Myths Among First-time Buyers in Arizona
It's no secret that the real estate market is highly volatile because it is subject to the whims of economic conditions, consumer preferences, and government regulations. Property prices generally vary, but the only true thing is that the whole country's real estate market is experiencing various problems happening in every state. No exception to this is Arizona.
Arizona's real estate market is relatively strong due to its location and growing population. For this reason, It attracts many buyers, especially first-time homebuyers, because of the affordable housing options and the variety of available properties. Despite this, Arizona is plagued by many misconceptions that deter prospective homeowners from buying a property. Unfortunately, some of these misconceptions have existed for a long time now, which puts the area in a negative light.
With this in mind, we will debunk some of Arizona's most common myths about buying a house. These include:
- Credit Does Not Always Matter. Bad credit can make it hard to be approved for a home loan. Even if you are approved, the loan terms are likely less favorable than those with a good credit score. The interest rates charged with a bad credit score can be much higher than those with a good credit score. Additionally, you may need to provide a larger down payment or more documentation to be approved for a loan. You must pay attention to your credit score when applying for a loan, as lenders will consider it when deciding whether or not to give you the loan. Therefore, improving your credit rating before submitting your loan application is essential.
- It's Fine if You Don't Have Much for a Down Payment. Getting a loan for your home without putting any money down is possible, but it is not recommended. Having some money saved up for the down payment is much better. This helps reduce the total cost of the loan and also shows lenders that you are a responsible borrower. A down payment can also make getting a lower interest rate on your loan easier. To get the most favorable terms for a loan for a house, you should have a down payment of at least 20% of the home's value. If you have a smaller down payment, you may have to pay for private mortgage insurance, increasing the amount you pay each month. Some programs offer loans with smaller down payments (as low as 3%) and provide down payment assistance, but they usually have specific income requirements and may not offer the best interest rates.
- Knowing the Upfront Costs When Buying a House Is Unnecessary. To purchase a house, you must be prepared to pay more than just the down payment. You must pay other fees, such as closing costs, home inspection, and additional due diligence fees. These fees are necessary to ensure the transaction is done correctly and you get exactly what you are paying for. Your mortgage lender and realtor can provide you with all the expenses associated with your purchase, so you can plan and budget accordingly.
- You Only Need to Talk to a Single Mortgage Lender. While you might think you only need to talk to a single lender, this is not recommended. Even if you don’t have the time or energy to visit different lenders physically, you can still compare their offers online. Every lender will have a different approach to your application and may provide a different quote. It is worth taking the time to explore your options to get the best deal possible. As for your mortgage options, you can choose from various loan types, such as fixed-rate loans, adjustable-rate loans, FHA loans, and VA loans. Each loan has its own terms, interest rates, and fees, so you must consider which is best for your needs. You can also explore government-backed loan programs, such as the USDA loan, that can help you with your purchase.
Getting a mortgage in Arizona is straightforward as long as you know what to do. Because of this, you must choose the right lender and know their offers, even if it may take too long. This way, you can get the best deal available and have the chance to save money in the long run.
Get In Touch With Your Trusted Mortgage Expert
If you want to buy a home in Arizona, X2 Mortgage can help you! We offer various loan products, such as FHA, VA, USDA, and conventional loans, to help you get closer to your dream home. Call us today at (480) 992-4200 for a consultation!