Homebuyers in Arizona can expect to pay a 4.02% average interest rate in September for a 30-year fixed mortgage, which has a principal of $200,000 and 20% down payment.
Some places in the state, such as Maricopa County, are popular destinations among buyers. You should consider looking for a mortgage broker in Tempe or Phoenix to facilitate the loan application process, and they should ideally offer different options aside from a 30-year loan. Shorter terms like a 15-year fixed mortgage carry an average interest rate of 3.48%, while a 5/1 adjustable-rate mortgage typically has a 3.64% rate.
Rates in Different Cities
Those who plan to move in a different city within Arizona should expect mostly similar interest rates, which range from 4.58% to 4.70% for a 30-year loan with a 20% down payment. In the Phoenix-Mesa-Scottsdale region, you might spend around $975 per month on a mortgage for a house worth $238,000. The average rate in the city is currently at 4.58%.
Average interest rates in the Sierra Vista-Douglas area are the same, but the median home price of roughly $155,000 means that you could only pay approximately $633 per month. Those who borrow money in Tucson will pay a higher rate of 4.65%, although median home prices in the city are also more affordable. If you buy a house for around $179,000, your monthly loan payments can cost almost $740.
Homes in the Lake Havasu City-Kingman region cost nearly $148,000, which is one of the lowest in the state. You might only spend around $609 on monthly payments for a loan with a 4.64% interest rate. By contrast, borrowers in Flagstaff pay more than $1,000 per month for interest payments. A median-priced house in the metro area costs approximately $255,000.
Know FHA’s Loan Limits
If a poor credit score often limits your loan options, then applying for an FHA loan will be a good alternative. However, this type of loan requires borrowers to use the money for buying their primary residences. In other words, you’ll have to find another mortgage type for property investors. The FHA also requires certain limits on the loanable amount.
As of January, borrowers in Maricopa County and other counties can only borrow up to $605,525 for a four-unit property. Take note that you can’t buy a house with an FHA loan if the amount costs more than the property’s value. The lowest limit also amounts to around $314,827 for a one-unit property in all counties except in Coconino County, where the highest and lowest limits cost $362,250 and $696,650, respectively.
In the end, look for a reputable broker who can find the lowest rate possible for your application. This will be important to save money from interest payments, especially for those who plan to buy a house in Phoenix. Those who pay the highest interest rates in the city spend around $61,000 more than those who were able to find a low-interest loan. How much are you willing to borrow for a home purchase?