What’s the process for getting a mortgage in Arizona? A step-by-step guide to landing your dream home

Arizona is truly a paradise: with a warm climate, a vibrant culture, and a thriving home market, the Grand Canyon State is where you can dream big when it comes to purchasing a house of your very own.

Almost 97% of Americans finance their home purchase with a loan; however, if you’ve never purchased a home before, you may be mystified by the process of applying for and receiving a mortgage. Today, we’ll demystify the process of applying and being approved for a mortgage, as well as explain why working with a mortgage broker is the best way to get a home loan in Arizona.

Step one: Get your finances in order and prepare a home-buying budget

Your home-buying process starts before you ever even contact a lender about a mortgage; it begins when you decide for yourself that you want to be a homeowner and start taking your finances seriously.

To purchase a home, you need to have a credit score of at least 620; however, if you want to get a great interest rate on your mortgage, aim for 740 or higher. You’ll also want to have a low debt-to-income ratio, meaning that you don’t have to pay much toward your debts.

Finances can be mystifying for many people – as well as very intimidating. However, there are some simple tips to make your budgeting less overwhelming, including setting up autopayments and auto-deductions for your savings account and trying to bundle as many services as possible so you have less to worry about.

Step two: Find a lender and get pre-approved for a mortgage

Choosing the right lender for your needs can be more complicated than you think, so it’s important that you take your time with this step. A mortgage broker like District Lending is an incredibly helpful tool, as they can shop around on your behalf and look for those lenders who are a perfect match. You’re not beholden to working with only one particular bank if you reach out to a mortgage lender, as they can look far and wide for the best rates.

After you’ve done this, you’ll want to apply for a pre-approval; this basically tells realtors that you will indeed be able to make an offer on the home if you’re accepted.

Step three: Find a home and make an offer

Now is the part most people really enjoy: looking for the right home. You can work with a realtor or go it alone, but be sure to match the homes you’re looking at with the amount you’ve been approved for and try to keep it on the lower end of your budget. You never know what else you may need to pay for when you actually close on the home.

Step four: Get a home inspection

A home inspection may be required by the city you’re purchasing in so as to ensure that the home is safe for habitation. You can also use the home inspection as an opportunity to bring up concerns with the seller, and perhaps negotiate down to a cheaper price.

Step five: Complete the mortgage application

This will be very similar to the pre-approval process for your loan, so you’ll need most of the same information you used to get that initial approval. Your mortgage broker can help walk you through this step as well, making sure that you have filled out everything properly and filed on time. Errors on your application can take a lot of time to rectify, so be sure to go slow and complete the form as meticulously as possible.

Step six: Get a home appraisal

The next step is usually required by the lender, who wants to be sure that the home is truly worth what the seller asked for. This will be done by a licensed appraiser, who will take a look at the home’s condition, its location, and the asking prices for similar homes in the area.

While the appraisal will see whether it’s worth the money you paid, they’re not qualified to tell you if there are any serious issues with the home, which is why you should get a home inspection prior to signing any paperwork with the seller.

Step seven: Close the deal

Once the appraisal is done and you’re completely satisfied, it’s time to close the deal. You’ll sign the paperwork for your mortgage, have the deed of the home transferred to you, and officially take ownership of the home. This is also the time when you’ll pay the down payment and the closing costs.

Final thoughts

It’s natural to be a little intimidated by the many steps in buying an Arizona home, but with this step-by-step guide, you’ll be familiar with the process before ever reaching out to a mortgage broker, who will help you understand everything involved. With the help of a great mortgage broker like District Lending, you’ll become the proud owner of a gorgeous Arizona property in no time.