Though the home-buying process might seem long and confusing when you’re on the outside looking in, the truth is that you can break it down into 5 easy steps. If you’re thinking about buying a home in Arizona, be sure to read our guide before you jump in.
Step 1: Consider Current Arizona Mortgage Rates
Every mortgage payment includes 2 parts:
- Principal: Your principal payment goes toward repaying the balance that you borrowed to buy your home.
- Interest: Your interest payment goes directly to your lender in exchange for servicing your loan. Most lenders calculate interest as an annual percentage called an annual percentage rate (APR).
Locking into a low mortgage interest rate can save you thousands of dollars by the time you finish paying off your loan in full. This means that it’s worth the time and effort to keep tabs on how mortgage rates are changing in your area before you apply for a preapproval. Interest rates can vary depending on your local housing supply, the current state of the bond market, how the economy is doing and many more factors.
Here’s a sample of what you might expect to pay for your mortgage loan in Arizona today. We update this information regularly as interest rates in your state change.
| Loan Type | Rate | APR |
|---|---|---|
| 30-year fixed | 6.167% | 6.258% |
| 15-year fixed | 6.348% | 6.514% |
| 7/1 ARM (adjustable rate) | N/A | N/A |
| 5/1 ARM (adjustable rate) | 6.286% | 7.5% |
Step 2: Pick a Mortgage Lender in Arizona
As a buyer in Arizona, you’ll have access to a wide range of loan types and lenders. If you aren’t sure where to begin your search, consider a few of our favorite choices below.
- Online Service
1. Best Overall: Quicken Loans®
Quicken Loans is one of the best lenders for first-time buyers because the company provides a wide range of loan products. Quicken Loans’ YOURgage option allows you to choose a term between 8 and 29 years, with 30-year loans also available. Quicken Loans offers a variety of government-backed mortgage options as well, which can make it easier to buy your first property if you have a lower credit score or down payment.
Not sure which type of loan is right for you yet? Visit Quicken Loans’ Rocket Mortgage® platform, which is packed with articles and calculators you can use to find the best mortgage for your situation. When you’re finally ready to apply, you’ll enjoy an easy, intuitive preapproval process.
2. Best for Veterans: Veterans United
If you’ve served in the military and you have a low down payment, a VA loan might be a great option for you to buy a home. VA loans are a special type of government-backed loan for members of the armed forces and veterans that may allow you to buy a home with no down payment.
Veterans United is the country’s top provider of VA loans. Veterans United employs a complete team of men and women who have served, which means you’ll receive advice directly from veterans who understand the VA loan process. Veterans United can assist you in determining if you qualify for a VA loan and they can help you get your proof of service needed to take out a VA loan. If you don’t currently qualify for a VA loan, Veterans United can also help you take out a conventional loan.
3. Best for Low Interest Rates: Better.com
Better.com is an online mortgage lender that offers a simplified preapproval application process and some of the lowest APRs we’ve seen. Getting an interest quote from Better.com is easy — just enter a little information on your home purchase price and credit and see instant rate comparisons with no commitment. Better.com’s streamlined application is easy enough to complete from your phone or tablet and the lender offers both conventional and FHA loans.
Found a better rate from one of Better.com’s competitors? Better.com’s Better Price Guarantee will provide you with $1,000 to put toward your closing costs or down payment if they can’t beat it. If you’re looking for the most affordable loan possible, be sure to check out Better.com.
Step 3: Find a House
Once you apply for a mortgage loan and receive preapproval, it’s time to start the house hunt. You may want to choose to enlist the help of a real estate agent or realtor at this point to make your search a little easier. Working with a real estate agent provides you with a number of benefits, including:
- Access to more listings: Real estate agents have connections, and they can often access listings and properties that you won’t find on online real estate databases.
- An easier home search: Agents are experts in your local real estate market. After you tell your agent what you’re looking for in your new home, he or she may be able to introduce you to a new neighborhood or city you’ve never thought to consider.
- It may not cost you anything. Traditionally, the home seller pays for the real estate agent’s commission from the proceeds of his or her home sale. This means that there are very few drawbacks to working with an agent as a buyer.
Whether you decide to work with an agent or not, you may want to create a list of wants and needs to narrow down your property search. Think about things like the ideal size, distance from your work, property taxes and any appliances you want included in the home sale when you consider which properties you want to visit.
Step 4: Make an Offer
Once you’ve found a home you’d like to purchase, it’s time to submit an offer letter to the seller or the seller’s agent. An offer letter is an official statement that tells the seller who you are and that you’re serious about buying the home for sale. Most buyers let their agent write their offer letter because agents understand which terms, contingencies and concessions are reasonable to ask for. Agents also understand how to write a comprehensive, legally binding offer that puts your financial interests first. If you found your home on your own, it’s highly recommended that you enlist an agent or realtor in your area to help you draft your offer letter.
After you’ve submitted your offer letter, it’s time to play the waiting game. Every offer letter will include a deadline that the seller must respond. If the seller accepts your offer, congratulations! All you have to do is head to closing. If the seller rejects your offer or gives you a counteroffer, you can choose to submit a new offer (or accept it if it’s a counteroffer) or move onto a different property. Both parties must agree to a common set of terms before you can close on your loan.
Step 5: Closing Time
Closing is the final step in the home-buying process. Most mortgage lenders have a closing process that includes 3 steps:
- Appraisal: An appraisal is a professional estimate of the amount of money your home is worth. An appraiser will visit the home you want to buy and do a little research on the neighborhood before assigning your home an official value. Lenders require appraisals before they offer mortgages because they cannot loan you more money than your home is worth.
- Inspection: An inspection isn’t the same thing as an appraisal. During an inspection, a home condition expert will visit your property and test your home’s systems and appliances. At the conclusion of the inspection, you’ll receive a report telling you about any problems in your home.
An inspection usually isn’t required to get a loan — though there are exceptions. For example, if you’re buying a home with a VA loan, your property will need to pass a pest inspection before you qualify. Even if your loan doesn’t require an inspection, you should still get one to make sure that you aren’t buying a property with major hidden repair needs.
- Underwriting: During underwriting, your lender goes over your financial information, verifies your credit and assets and prepares your loan paperwork. They’ll examine your bank statements, W-2s and profit and loss statements if you’re self-employed to be sure that you qualify for your loan. As long as you’re honest on your preapproval application, underwriting will usually not involve you at all.
Once all 3 steps close, your lender will send you a document called a Closing Disclosure. The Closing Disclosure contains the final terms of your loan. Read through the Closing Disclosure and acknowledge it with your lender.
Finally, you’ll attend a closing meeting. At closing, you’ll sign on your new loan, pay your down payment and closing costs and get the keys to your new property.
Move-in Day in Arizona
After you close on your loan, your only job is to manage your mortgage payments. Each month, you’ll make a mortgage payment to your lender and reduce your principal balance. Curious how your loan might change if you made an extra payment? Use an amortization calculator to learn more about how you can pay off your loan early.
About Sarah Horvath
Sarah Horvath is a distinguished financial writer renowned for her expertise in mortgage content. With years of experience in the mortgage industry, Sarah offers invaluable insights into home financing, refinancing, and real estate trends. Her comprehensive understanding of mortgage products, coupled with her ability to simplify complex financial concepts, makes her a trusted resource for homebuyers and homeowners alike. Sarah’s dedication to providing accurate and actionable information empowers readers to navigate the mortgage process with confidence. Whether discussing mortgage rates, loan types, or tips for homeownership, Sarah’s writing is characterized by clarity, reliability, and a commitment to helping individuals achieve their homeownership goals.