Financing a home in Arizona Active Adult Communities is more prevalent than you may think. While many homes are cash deals, a growing number of buyers are holding on to their cash and financing their vacation or year round home. Today’s lending laws have changed and some buyers are finding the financing option to be a challenge. This blog will simplify the process and provide the information you will need from the pre-qualification to landing loan documents to the title company for a successful on-time closing. Check out our five steps to a smooth closing when financing for some great initial tips.
Financing a Home in Arizona Active Adult Communities – Finding the Right Lender
Many people want to use their friend or a lender out of state and that is understandable. However, the best bet is usually to utilize a lender in Arizona that is familiar with Arizona law and the deadlines and requirements associated with financing. Many buyers do not understand the process and it is the buyer who is bound by the Arizona purchase contract to perform. For example, the buyer must provide regular loan status updates to the seller. If your lender out of state is not familiar with this process, the buyer may be in jeopardy of breach of contract. The new TRID laws have specific requirements that must be met to avoid breach of contract. And, loan documents are required to be at the title company at least three days prior to closing. We have had several clients who have had a cure notice right before closing because their lender could not deliver loan documents timely. Once a cure notice is issued, the buyer has three days to cure or they are in default of the contract and will lose their earnest money at a very minimum. Our website has preferred partners including loan officers, title companies and others who will help make the buying process a smooth transaction.
Financing a home – Pre-Qualification
The Arizona purchase contract requires that any financed offer must have a loan pre-qualification attached. The pre-qualification is a one page document signed by both buyer and lender. It assures the seller that the buyer has had initial conversations with a lender and that some basic work such as a credit score has been verified.
Financing a home in Arizona Active Adult Communities – The Process
In simple terms, once the pre-qualification has been submitted with the offer and it is accepted, you are now officially under contract. The earnest money will be deposited with the title company and all documents will be submitted to the title company and lender. The lender will then take a full application and begin with requesting and verifying documentation. Once all requirements are met, the loan file will be submitted to underwriting for approval. Often, the underwriter will request clarification or additional information. It is vital that you do not make any major purchases or close out any credit cards during the loan approval process. Discuss this with your loan officer to ensure you are not accidentally doing something that may jeopardize loan approval. Once final underwriting is approved, loan documents will be prepared and an estimate of the amount of funding needed to close will be given. Your lender will send final loan documents to the title company where you will sign all home closing paperwork. Your lender will fund the loan by submitting funds to the title company. Your certified funds will accompany the lender funds and title will hold all until they release to record on the day of closing. Once recording has occurred, the home is yours!
Justin Oliver with Nova Home Loans is one of our preferred vendors. They have prepared a Financing a Home in Arizona Home Buyers Booklet that will help explain the financing process in greater detail.
Determine how much mortgage you can or want to afford. How to become pre-qualified and what mortgage is a best fit for you. Today’s lenders offer a variety of options and they will give you a break down of all costs associated with the loan.
If you are considering financing a home in one of Arizona’s active adult communities, call us at 480-809-5759. We will help you connect with one of our preferred lenders so that when you are ready to buy, nothing is holding you back from making that offer.