Tips to Help You Afford Property in Arizona
Life is made up of small journeys. Often, these journeys are about pursuing a particular goal. That goal could be obtaining a degree from a four-year college, or getting a promotion at a particular company, or starting a family, or traveling to a new country every year.
Another common objective that is part of the American dream is owning property. Property can be a huge asset. It may serve as your primary home, but it could also be a business venture to bring in additional income.
Unfortunately, buying property can be expensive. The real estate market in the United States is huge, and even in Arizona, you need significant resources to be able to own residential or commercial property. To help you accomplish your goals, here are some tips to help you afford property in the Grand Canyon State.
Consolidate Your Debt
Building up your savings is necessary if you want to afford a down payment on property. The biggest inhibitor to your ability to save money is probably debt. Whether you owe money for student loans, car payments, or credit cards, this debt will significantly affect your path to property ownership. Paying down this debt as quickly and consistently as possible will improve your savings and increase your credit score, which helps make mortgages more affordable. Focus on the higher-interest debts first, such as credit cards and student loans. When you have additional cash to use, put it toward those principals. Lenders will analyze your debt to evaluate risk, so decreasing it will improve your chances of being approved.
Choose the Right Real Estate Market
Throughout Arizona, there are hundreds of different real estate markets. Their location directly impacts the price of properties in the area. For example, the cost of living in Scottsdale is higher on average, so homes and commercial properties tend to cost a bit more. If affordability is an obstacle for your goals, then you may need to check markets that are smaller or have a less competitive real estate sector. This will yield lower prices on properties that could cost hundreds of thousands of dollars more in a bigger market like Scottsdale.
Select the Best Financing Product
Few buyers can afford to pay the full price of a property upfront. If you are trying to purchase a home, then you will likely turn to conventional home loans to complete the transaction. A FHA loan or USDA loan is available to lower-income borrowers who do not have a great credit score. A VA loan is useful for veterans, active military, or surviving spouses to significantly lower the cost of a home. If you are choosing to invest in a rental property, then a DSCR loan in Arizona can be approved based on a down payment and the projected rental income of a property versus its total expenses. For a commercial property, you could potentially get a SBA loan to help your business buy a building to use as its base of operations. Affording property all comes down to choosing a financing plan that suits your situation.
Browse Comparable Properties
Negotiation is a key phase of all real estate transactions. Sellers want to get as much as possible for their properties and buyers want to get a great deal. There may be a bit of back and forth before a price is agreed on. One strategy to help negotiate down what you believe is a high price is to look for comparable properties in the same market. Compare the amenities that each of these listings offers and see if they match your interests. If the price is much higher than the others, make this known to the seller as to why you want it for less than they are offering. You can also use the inspection report as leverage to drive down the cost if there are issues that will need to be addressed once you own the property.
Have a Cosigner
Maybe you have limited income or a poor credit score, but owning a home would get you out of the rent trap. If you cannot be approved for a loan due to these limitations, you could benefit from a cosigner. This person’s stronger financial situation will help the loan get approved while you are still responsible as the owner of the property. The danger to the cosigner is that they will be held liable if you miss payments.
Property in Arizona Can Propel You Toward Your Goals
Whether your goals are to own a home, raise a family, build a business, or retire more comfortably, owning property may be a big part of those objectives. Since property can be very expensive, no matter where in Arizona you are looking, it is crucial that you understand these strategies to make affordability more realistic.