Buying a home in Phoenix will likely be the single most significant financial decision you make in your life. Like most things, a successful first-time home buyers in Phoenix experience hinges on getting the details right throughout the process. In this blog post, we’re discussing the ten most important things you need to know to help you navigate the real estate sales process and close the deal.
Start Saving Early
Saving for a down payment is usually the biggest hurdle first-time homeowners face. Your required down payment will depend on many factors, including your lender and the type of mortgage you choose. If you have excellent credit, you could be eligible for a down payment of as little as 3%. However, even a 3% down payment on a $250,000 home is $7500. This doesn’t include your closing costs. Closing costs are fees and expenses you pay to finalize your home loan. Closing costs typically range anywhere from 2% to 6% of the total loan amount.
It’s important to note that borrowers who put less than a 20% down have to pay for Private Mortgage Insurance (PMI). PMI can increase your monthly outgoings by several hundred dollars. Most lenders no longer require PMI once you’ve built 20% in equity,. With all of these expenses in mind, you should start saving as soon as possible to build up a sizeable downpayment.
Get a Preapproval Letter
Before searching for homes, it’s important for first-time buyers to know how much you can afford. A mortgage preapproval letter is the best way to determine your budget. In addition, having a preapproval letter is a clear sign to home sellers that you’re a serious buyer. This is especially important in a seller’s market when your offer is likely to be up against other home buyers in Phoenix.
Be sure to apply for a loan preapproval once you’re ready to start home shopping. To provide a preapproval, your lender will use your credit report and ask you to provide documents that verify your income, any assets, and debt. Don’t worry if you want to shop around for lenders, it shouldn’t affect your credit score.
Have a Home Inspection
Once you’ve found the perfect home and had your offer accepted, you must have the house inspected. Home inspections can bring to light any issues you may not have been aware of when you made your offer. It’s crucial to find out about needed repairs and potential problems before the closing date if you want to avoid costly mistakes.
Home inspectors look at all of the home’s major components to ensure they’re in safe working order. This includes the electrical system, plumbing system, roof, structural integrity, appliances, and much more. A home inspection can cost anywhere from a couple of hundred to over a thousand dollars, depending on the home’s square footage and location. However, a thorough home inspection could save you thousands of dollars in the long-term if it unearths previous unknown issues with the home buyers in Phoenix.
Negotiate With the Seller
If your home inspection uncovers some costly, previously unknown issues, you may want to consider asking the seller to complete the repairs before closing. Alternatively, you could ask the seller for a credit towards your closing costs to cover the expense of repairs. Your ability to negotiate will depend on the issues at hand and the local real estate market. If the issues are minor and you signed an “as-is” contract, the seller may be unwilling to help. However, if the problems are significant, the seller is typically more willing to help, as they will likely face these issues even if they put their home back on the market. Be sure to ask your real estate agent for their advice so that you can and strategize accordingly.
Get Home Insurance
If you’re financing your home’s purchase, your lender will require you to buy homeowners in Phoenix insurance before closing day. Home insurance helps to cover the cost of repairing or replacing your home and belongings should they be damaged. Home insurance also provides liability insurance should you be held responsible for an injury or accident that occurs on your property. First-time home buyers in Phoenix should ensure that they buy adequate home insurance covering the cost of rebuilding their home if it’s destroyed. Many homeowners opt for the cheapest home insurance policies that cover the basics, but this can prove devastating if disaster strikes. Speak to your insurance company to find out what your policy covers, and ensure you’re adequately protected.
If you are looking to sell your home in Phoenix, HSE Buyers can assist you in anything real estate with selling your home. They buy homes no matter the condition and buy “as-is”. They will give you an offer within just minutes and can help you sell within just 7 days!