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A Guide for First Time Home Buyers in Tucson

Posted by Chris Smith on September 23, 2020

Over the last few years, Tucson’s population has grown tremendously with Tucson’s metro hitting 1 million people. There was a 1.59% population growth rate in 2018-2019. Many people are moving to Tucson because of its low cost-of-living, which is 8.4% lower than the average in the US.

This surge in population and economic growth has led to a promising buyer’s market in Tucson an its surrounding areas, including Oro Valley, Marana, and Green Valley. The buying process can be stressful, but with the right know-how, your first Tucson home purchase can be both simple and fun! In this post, we will delve into everything first time home buyers in Tucson need to know.

How Much do you want to Spend on your Home?

The first thing you should do is determine how much you are willing to spend to buy a home. You need to look at your savings, future earnings, and mortgage financing. If you decide to take a mortgage, do you have the down payment?

There is no need to stretch your finances to purchase a home; buy what you can afford now. As a general rule, your overall housing payment below 30% of your gross monthly earnings. Spending more on a mortgage makes you ‘house poor’ where you will encounter difficulties in meeting other household expenses.

Understand the Market

Market research is essential before buying a home. Find out the median price of your preferred house in your chosen area. What is the Average Time on Market? If you intend to sell the house in the future, establish how long a house stays in the market before it sells.

It is also good to know of any major developments in the area that might cause a rise in the cost of homes. Such developments include the construction of a major highway, the entry of a major retailer, a manufacturing plant, new school development, etc.

Check your Credit

Not everyone qualifies to purchase a home; there are certain income and credit criteria you have to meet to prove you can repay a mortgage loan. When you have a low credit score, it means that it is risky to lend you money; this will result in a higher interest rate on the mortgage loan.

But, with a high credit score and timely monthly repayments, you will have power to negotiate a favorable interest rate with lenders. Before you buy a home, take the following steps improve your credit score:

• Pay bills on time and keep your credit card balances at a minimum

• Obtain credit reports from the three credit bureaus and dispute any errors with a potential of hurting your credit score

• Keep track of your credit score

• Keep your credit cards open as closing increases the amount of available credit for use, which may lower your credit score

Find the Right Mortgage Lender in Tucson

Finding a great Tucson Mortgage lender is an important step for first-time home buyers. Here are a few things to consider:

Getting Preapproved

Before the house hunting process begins, it is vital to get preapproved. Getting preapproved shows your seriousness to sellers and raises the chances of the sale going through. However, you should not confuse getting preapproved with getting prequalified.

A prequalification is an estimate of available mortgage that does not require a lot of information or a credit pull. On the other hand, a preapproval is a complete mortgage application with an impressive credit score and other supporting documents.

The first step in getting preapproved is to gather all relevant documents such as tax returns, pay stubs, W-2s, bank statements, information on other debts, and copies of government-issued ID.

Shop Around

Do not stop with one preapproval; get preapproved by several lenders. This will enable you make comparisons of different lenders’ interest rates and terms. That way, once you find your preferred house, you will go directly to the lender with the best terms.

Loan Options for First Time Home Buyers in Tucson

There are several loan options provided by non-profit organizations and state and federal governments that help first-time home buyers obtain a mortgage. The following are a few examples:

• Conventional mortgages that are the most common, they normally require the borrower to make a 3% down payment for a mortgage loan.

• Government agency loans that are insured by the Federal Housing Administration (FHA). They require the borrower to make a 3.5% down payment, but those insured by the Department of Agriculture and the Department of Veterans Affairs do not require a down payment.

• Down payment grants. The National Homebuyers Fund gives a 5% grant of the total amount to moderate and low-income, first-time homebuyers Tucson.

Hire a Good Tucson Realtor

Buying a house is a major financial decision, and the right real estate agent makes a world of difference, especially for first time home buyers. Since there are thousands of real estate agents to choose from who work in the Greater Tucson area, this section will provide some simple guidelines to follow to ensure you find the right fit.

Look for Referrals

Ask your friends or family for recommendations on a realtor they have worked with and had a good experience. Look for one with experience who works with homebuyers with needs that are similar to yours. First time home buyers have different needs and expectations than a repeat buyer.

Niche Expertise

Since smart real estate agents focus a bulk of their marketing efforts on a specific area, it makes sense to search for a Realtor who is knowledgeable about the neighborhood you are searching in. One way to narrow your search is by performing a search engine search for the neighborhood or subdivision followed by “Homes for Sale”

A few local examples for popular neighborhoods in Tucson include:

Sam Hughes Homes for Sale

Dove Mountain Homes for Sale

La Paloma Homes for Sale

Realtors and teams with high ranking in those searches have more than likely invested into standing out in these narrow search parameters. Although it may not signify that the agent is a good fit for you, finding an agent who truly invests in marketing themselves is a great place to start.

Research Probable Candidates

Pick a few candidates and research on them by first checking their online presence. Examine their social media accounts and websites that promote their listings. Take a keen look at reviews, as client testimonials speak volumes in this people-centric industry.

While online, visit your state’s real estate regulator for information on whether the agent is licensed or has pending disciplinary issues. In Arizona, the Department of Real Estate’s Public Database is easy to use, and allows buyers to search for any real estate agent they are interested in.

Interview Three Realtors

This is an opportunity to know the realtor’s style and experience. Your perfect realtor should understand and appreciate your budget needs and be highly knowledgeable in the area you’ve chosen. The interview sessions also give you an opportunity to know the agent’s method of communication and if they can accommodate your schedule.

Ask for References

Request the real estate agent for a list of homes they have listed and sold within the last one year. The list should also contain contact information for a few clients who have recently bought houses. Call a few of those clients to establish if they had a good experience when they were buying a house.

Examine your Contract

Look at the duration of the contract. The ideal contract should not exceed six months. If the real estate agent is good, the sale can even happen within 30 days. If the contract exceeds six months and it lapses before you find a house, you should be able to look for another agent with ease.

We Hope This Helps First Time Home Buyers in Tucson!

Buying a home for the first time can be overwhelming for most people. With the guidelines above, we hope that you will have good experience when you finally decide to be a homeowner. If you want to learn more about Buying Tucson Homes, give us a call at 520-404-8813 or Contact Us today!

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