Zillow reports a “healthy” housing market in Arizona, with a median listing price of $284,900 in the state and a Zillow home value index of $244,600. This a little higher than the national median listing price, which is $275,000, and the national home value index, which is $220,100.
These values are considerably higher than they were just a few years ago, showing that the housing market in Arizona is growing again and in much better shape than it was during and immediately after the downturn that began in sometime around 2007.
This downturn was rough, but Arizona homes have regained value and the housing market is poised to continue recovering. Arizona homes hit their lowest Zillow home value index in September 2011, with a value of just $131,000.
This was just a few years after the start of the national downturn caused by the Great Recession and this number is a bit lower than the national average around September of 2011, which was $149,000. Since then, values largely rebounded and are now higher than they were in October 2008 at $194,000, the earliest data available from Zillow for Arizona.
This is higher than the median home value in the US that month, which was $178,000.
Home shoppers in Arizona need to keep in mind that national economic factors have an impact on mortgage and refinance rates. Rates are definitely influenced by local economics, though, as well as Arizona state laws, foreclosure rates, average home values, and lender competition for new business.
Also, there are several other factors impacting mortgage and refinancing rates on an individual level. In this article, we will discuss and explain some of these factors so prospective borrowers can plan and navigate the application process for a loan in Arizona.
We will also offer some advice on how you can get the best mortgage rates in Arizona when you close on a home.
Current Mortgage & Refinancing Rates in Arizona
Critical Elements That Affect Mortgage Rates & Refinance Rates in Arizona
There are a variety of different factors that contribute to the mortgage and refinancing rates in Arizona. It is important to understand how these elements influence rates, as they can save borrowers in Arizona thousands of dollars each year.
Credit score
One of the most important factors impacting your eligibility for a mortgage as well as the rates you are offered is your credit score. Applicants with higher credit scores are typically considered to be a lower risk than others, which means they have a higher likelihood of receiving lower mortgage rates.
Borrowers with lower scores are less likely to qualify for a loan or get great refinance rates. Although it is definitely possible to qualify with lower credit scores, lenders will probably offer less favorable terms to applicants with lower scores.
Loan term
The length of the loan term can be another critical factor influencing the mortgage rates you’re offered. Generally speaking, shorter loans receive the lowest rates and overall costs. That said, the monthly payments are usually higher and can cost significantly more per month.
Homebuyers who are comfortable with higher monthly payments may want to consider a short term since they can ultimately pay off their loan faster that way. Those looking for smaller monthly payments may benefit from a longer loan, which makes the home more affordable every month.
Down payment
As you think about applying for a mortgage, keep in mind that lenders also carefully consider what applicants are able to put toward their home’s down payment. Higher down payments mean a smaller overall loan and a reduced risk for the lender.
Buyers who can pay at least 20 percent are usually considered to be fairly low risk, so they can receive the best rates.
Refinance type
Different refinancing options have different rates, so it does pay to consider multiple options and get a few different refinance quotes. Cash-out, cash-in, fixed and adjustable-rate refinance mortgage loans may all offer different rates and monthly payment amounts.
Loan size
Sometimes, more expensive homes that require larger loans pose a greater risk to the lender because more money is on the line. In situations where low-value homes are located in areas with reduced economic activity, lenders may also interpret this as a higher risk.
Either way, you will need to shop around for the best deal, particularly if you are in either of these situations.
Beyond just understanding how these factors influence rates, you should also understand the market in your area of Arizona and try to compare several different offers.
How to Get the Best Mortgage & Refinancing Rates in Arizona
Getting more than one quote can help you get the best mortgage rates and refinancing options in the state of Arizona. Many buyers choose the first lender who provides them a quote and often misses out on a better deal elsewhere. 47 percent of borrowers visit only one lender.
This can be costly, and applicants can end up paying thousands of dollars more per year or tens of thousands more through the life of their loans. If you want to shop around and compare mortgage or refinance rates in Arizona but aren’t sure where to start, consider the following process:
Compare multiple types of mortgage or refinance loans and take into account the full costs
Besides just looking at different lenders, you can also compare different types of loans. Keep in mind that the best type of loan for you may not be the cheapest or may have a higher rate. No two borrowers are the same or have the same financial goals.
At the very least, research a few different lenders and find out about several different types of mortgage or refinance loans before making your decision. In order to find the best overall deal, you should compare the total costs including fees, underwriting costs, broker fees, closing costs, and prepayment penalties.
To have a better idea of the total cost of your purchase or refinance loan, be sure to ask for a Loan Estimate and Closing Disclosure form.
Get quotes from more than one lender
While it does take time and effort to research lenders, getting the best rates and payment options on your home mortgage or refinance loan may require completing a few loan applications. Only comparing rates from two lenders may mean missing out completely on more affordable alternatives.
Some lenders also offer bonuses, features, and incentives to close. If you are looking to save money upfront, some lenders may include your closing costs in your loan or waive their underwriting fees so you can cut costs at closing. In other words, it pays to shop.
Recommended Companies in Arizona
In Arizona, you have a variety of different options for mortgage lenders. While going through the loan application process, be sure to compare quotes and shop around. Look at different lenders so you can be confident you’re getting the best possible loan options. A few of our top recommendations for mortgage lenders in Arizona include:
Quicken Loans: With their 90-Day RateShield Approval program, you can start your home search with your rate already locked. If rates increase, you are protected so you can buy with confidence.
Magnolia Bank (also known as closeyourownloan.com): With this lender, you get instant online access to the latest rates so you can quickly compare options.
Lending Tree: This online marketplace lets you quickly compare rates from multiple lenders so you can see the options available to you.
Rocket Mortgage: Rocket lets you import your information and get approved within minutes. See what rates you qualify for almost immediately.
