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Mortgage Calculator AZ (Arizona)

Overview of Arizona Housing Market 2023

Arizona's housing market has been characterized by steady price appreciation and a shortage of housing inventory, particularly in cities like Phoenix and Tucson. This trend was driven by factors such as population growth, attractive job opportunities, and a warm climate that drew new residents to the state. The demand for housing, combined with limited supply, led to competitive bidding and increased prices.

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At Brighton Bank, our commitment goes beyond just providing financial services. We believe in empowering our customers with the tools and resources they need to make informed decisions about their financial future. That's why we've put together this dedicated mortgage calculator landing page – to offer you a seamless, transparent, and personalized way to explore your home financing options.

What's on this page?

-Mortgage Calculator 
-Property Tax in Arizona

-Closing Costs in Arizona
-Housing Market in Arizona

-Mortgage Resources
-Terminologies

Mortgage Calculator AZ (Arizona)

How to Calculate a Mortgage Payment​

Calculating a mortgage payment involves a few key components: the loan amount, interest rate, loan term, and the type of mortgage. The most common type of mortgage is a fixed-rate mortgage, where the interest rate remains constant throughout the loan term. Here's how to calculate your monthly mortgage payment: The formula to calculate the monthly mortgage payment is:

M = P * [r(1+r)^n] / [(1+r)^n - 1]

The Variables are as follows:

  • M is the monthly mortgage payment.

  • P is the principal loan amount.

  • r is the monthly interest rate (annual rate divided by 12 and converted to a decimal).

  • n is the number of monthly payments (loan term in years multiplied by 12).

How a Mortgage Calculator can help you.

The Mortgage Calculator AZ (Arizona) is a powerful tool designed to assist individuals in making well-informed decisions about their home financing options. This calculator provides a range of benefits:

 

  • Payment Estimation: Predict your monthly mortgage payments based on loan details, aiding budget planning.

  • Scenario Comparison: Testing different loan amounts, interest rates, and terms to understand their effects on payments.

  • Loan term: Choose 30 years for lower monthly payments but higher interest or 15 years for less interest with higher monthly payments.

  • Avoiding strain: Brighton Bank's calculator factors taxes, insurance, and mortgage costs for a clear monthly commitment view.

  • Down payment: Lower 3% down payments feasible, calculator assists in optimal initial investment.

  • Affordability Assessment: Determining how much house you can comfortably afford within your budget.

  • Interest Analysis: This shows the total interest paid over the loan's life, guiding decisions on loan terms and types.

Key Determinants of Your Mortgage Payment

At Brighton Bank, we understand that your mortgage payment is influenced by a range of factors. Here are the essential elements that contribute to shaping your mortgage payment:
 

  1. Loan Amount and Interest Rate: The total amount you borrow and the interest rate applied directly impact your monthly payment. A higher loan amount or interest rate typically results in higher monthly payments, while a lower loan amount or interest rate leads to more manageable payments.

  2. Loan Term and Type: The length of your loan term and whether it's a fixed-rate or adjustable-rate mortgage matters. Shorter terms often have higher monthly payments but lower overall interest costs. In contrast, longer terms may offer lower monthly payments but potentially higher interest expenses over time.

  3. Property-Related Costs: Property taxes based on your home's value and location, along with homeowners insurance to safeguard your investment, are included in your monthly payment. We can help you estimate these costs accurately.

  4. Down Payment and PMI: A larger down payment reduces your loan amount, potentially lowering your monthly payment. If your down payment is less than 20 percent, Private Mortgage Insurance (PMI) might apply, adding a cost to your payment until you gain sufficient equity.

 

Our team at Brighton Bank is committed to guiding you through these intricacies, ensuring you make informed decisions tailored to your financial aspirations. With our expertise, you can navigate these elements and secure a mortgage payment that suits your unique needs.

What you can do to lower your monthly payment

A mortgage constitutes a long-term financial arrangement aimed at funding a home purchase, necessitating both repayment of the principal amount and the regular settlement of interest to the lender. The monthly cost of a mortgage can vary significantly based on factors like property price, location, and the type of loan selected.

 

To assist you in curbing your monthly mortgage expenses and achieving savings, Brighton Bank offers insightful strategies:

  1. Opt for a more budget-friendly home: Selecting a less expensive property translates to a reduced loan amount and subsequently lowers your monthly mortgage obligation.

  2. Make a larger down payment: If you make a down payment of 20% or more, you won't have to pay private mortgage insurance (PMI). PMI is an extra insurance that lenders require if your down payment is less than 20%. It can add hundreds of dollars to your monthly mortgage payment.

  3. Secure a lower interest rate: Engage in thorough research across different lenders to identify the most favorable interest rate, contributing to a decreased overall mortgage expense.

  4. Adjust your loan term: Opting for a longer loan term results in more manageable monthly payments, though it leads to a higher cumulative interest payment over time.

How lenders decide how much you can afford to borrow

When considering your borrowing capacity, Brighton Bank takes into account several key factors to ensure a responsible and suitable lending decision. Here's how Brighton Bank determines your borrowing capacity:

 

  1. Income Evaluation: Brighton Bank assesses your income stability and sources to gauge your ability to comfortably make repayments.

  2. Debt-to-Income Ratio (DTI): The bank analyzes your existing debts in relation to your income to determine a borrowing amount that maintains a manageable debt load.

  3. Credit History Check: Your credit score and history are reviewed to judge your creditworthiness and ensure that the borrowing terms align with your financial track record.

  4. Down Payment & Affordability: Brighton Bank considers your down payment amount, overall property expenses, and the chosen loan type to ensure that the borrowing amount remains within your financial means.

Determining Your Affordable Home Budget in AZ (Arizona)

Determining your affordable home budget in Arizona involves evaluating your financial situation thoroughly. Start by calculating your total monthly income, including all reliable sources of earnings. Next, list your existing monthly debts such as loans and credit card payments to gauge your debt load. Calculate your debt-to-income ratio (DTI) by dividing your total debts by your gross monthly income; a DTI of around 36% or lower is generally recommended.

Planning to buy a home in Arizona, one should assess their monthly income and debts, aiming for a 20% down payment to avoid mortgage insurance. One should also consider additional expenses like maintenance and utilities Consider seeking pre-approval from lenders to ensure that the loan aligns with one's finances and explores neighborhoods within your budget for a well-informed decision.

Factor in the down payment you can provide, considering that 20% is advised to avoid private mortgage insurance. However, it's essential to ensure that the monthly payment aligns with your financial goals and doesn't strain your finances. Once you have a clear understanding of your financial situation, it's time to factor in other expenses associated with homeownership in Arizona. Consider property taxes, homeowners insurance, and potential homeowner association (HOA) fees if applicable. These costs can significantly impact your monthly budget, so it's essential to account for them accurately.

 

Take into account that your budget shouldn't be stretched to the absolute limit. Leave room for unforeseen expenses and fluctuations in your income. Owning a home should enhance your financial stability, not cause stress.

Next Steps: What to Do After You Have Estimated Your Mortgage Payments

Following your estimation of mortgage payments, the journey towards homeownership unfolds with essential next steps guided by Brighton Bank. 

Whether you're embarking on this path for the first time, considering refinancing, or managing credit challenges, Brighton Bank is here to offer invaluable support at every phase.

  • Compare Our Rates: Before making a commitment, it's crucial to explore and assess offers from various mortgage providers. Brighton Bank encourages you to compare our rates with others, ensuring you make an informed decision. For more details, you can also access information about mortgage rates tailored to your location.

  • Undecided? Rent or Buy: If you're still weighing the options between renting and buying a home, Brighton Bank provides the guidance you need to evaluate which choice best suits your unique circumstances and financial goals.

  • Expand Your Knowledge: Brighton Bank provides a comprehensive resource to help you expand your understanding of diverse mortgage options. Whether you're interested in reverse mortgages, VA home loans, or FHA home loans, Brighton Bank equips you with insights to select the mortgage type that aligns with your preferences and requirements.

The Arizona housing market is currently in a state of flux. After experiencing rapid price appreciation during the pandemic, home prices have begun to cool in recent months. In June 2023, the median sales price for a home in Arizona was $437,000, down 3.3% from the previous year. The number of homes for sale has also increased, which is putting downward pressure on prices.

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The All Transactions House Price Index (ATHPI) for the United States and Arizona increased at a rapid pace in recent quarters. However, the data on new building permits issued in Arizona shows that the number of permits issued has been declining in recent months. This is likely due to a number of factors, including rising construction costs, rising interest rates, and a slowdown in the housing market. The decline in new building permits issued is a sign that the housing market in Arizona may be cooling off. However, it is important to note that the data is only for a few months, and it is possible that the market will rebound in the future. The factors that will affect the future of the housing market include the direction of interest rates, the strength of the economy, and the supply of housing.

​In July 2023, residential property prices in Arizona experienced a 2.3% decrease from the previous year, with a median selling price of $434,500. The volume of home sales exhibited a decline of 6.6% on average, comparing year over year, amounting to 7,877 homes sold this July, a reduction from the 8,437 homes sold in July of the prior year. The median duration that homes remained on the market was 42 days, showing an increase of 8 days when compared to the previous year.

What is the housing market like right now?

What does this mean?

Changes in home prices and how fast they're changing give us clues about how strong the housing market is and if homes are getting more or less affordable. Right now, the typical home in the United States costs $434,500.

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Average Closing Cost in AZ (Arizona) Counties

When buying a home in Arizona, it's crucial to consider not only the purchase price but also the closing costs associated with the transaction. Closing costs encompass a variety of fees and expenses that are typically paid at the closing of the real estate deal. These costs can vary significantly depending on the county in which you're purchasing the property.

Average closing costs are the fees and expenses that homebuyers and sellers typically incur during the process of closing a real estate transaction. These costs can vary widely depending on factors like location, property value, and the specific terms of the deal. On average, closing costs typically range from 2% to 5% of the home's purchase price. For a homebuyer, these costs can include expenses such as loan origination fees, appraisal fees, title insurance, property taxes, and attorney fees. Sellers, on the other hand, may be responsible for costs like real estate agent commissions, transfer taxes, and any outstanding liens or repairs required to close the sale.

 

The exact breakdown of closing costs can differ from one transaction to another, but certain fees are fairly standard across most real estate transactions. These can include lender fees, title insurance, and escrow fees. It's essential for both buyers and sellers to carefully review the estimated closing costs provided by their real estate professionals and lenders to have a clear understanding of the financial implications of the transaction. Homebuyers may also have the opportunity to negotiate some of these costs with the seller or lender, potentially reducing their financial burden during the closing process.

 

The average closing costs encompass a range of fees and expenses incurred when buying or selling a property, and they typically amount to a percentage of the home's purchase price. The specific costs can vary widely depending on various factors, and it's crucial for individuals involved in a real estate transaction to be aware of these costs and to review and negotiate them whenever possible. Understanding closing costs is a fundamental aspect of the homebuying or selling process and helps individuals budget effectively for the overall cost of their real estate transactions.

Average Property Tax in AZ (Arizona) Counties

Understanding average property taxes in different Arizona counties is crucial for homeowners and investors. It helps assess affordability, make county comparisons, plan finances, and guide investment choices. This knowledge informs budgeting, decision-making, and potential returns on real estate investments.

This dataset provides a comprehensive snapshot of the real estate landscape in various counties across Arizona, revealing important nuances in terms of median home values, median annual property tax payments, and average effective property tax rates. Pima County, with a median home value of $199,400, emerges as the leader in terms of housing market strength. However, this comes at the expense of homeowners who face one of the highest average effective property tax rates in the state at 1.00%, translating to substantial annual property tax payments. On the other end of the spectrum, Greenlee County offers more affordable housing with the lowest median home value at $91,800, and it boasts the lowest average effective property tax rate at 0.39%.

 

This data underscores a fundamental consideration for potential homeowners: the cost of owning a home extends beyond the purchase price. Property tax rates play a pivotal role in determining the overall affordability of homeownership in a specific county. While higher property values can signify a robust housing market and potential long-term returns on investment, they can also result in heftier property tax burdens. Conversely, areas with lower property values may provide budget-friendly housing options, but it's essential to be aware of the local property tax rates to make informed decisions about real estate investments. Ultimately, this data equips individuals and families in Arizona with valuable insights, helping them assess the financial implications of their housing choices within the context of varying property values and tax rates.

What Property Tax Exemptions Are Available in Arizona?

Let's delve into four common property tax exemptions applicable in Arizona:


Disabled Persons Exemption: In order to qualify for the property tax exemption for disabled persons, a person must be totally and permanently disabled resulting in that person’s inability to engage in any substantial gainful activity. The exemption has the effect of reducing the assessed value of the real property by up to $3000.


Senior Citizen Exemption: This exemption aims to alleviate the financial burden on older residents and help them afford to stay in their homes during their retirement years. The specifics of the program can vary, so seniors interested in this benefit should consult with their local tax assessor's office or visit the Arizona Department of Revenue website for detailed information.


Widow/Widower’s Exemption: The widow or widower must have resided with their spouse in Arizona, as residents, at the time of death. For qualified people, the exemption has the effect of reducing the assessed value of the real property by up to $3000 with a corresponding reduction in property tax.


Religious/Non-Profit Organization Exemptions: To apply for an Organizational Exemption you must file an application (Form 82514A) with the County Assessor in the county where your property is located. Failure to file for the exemption by the deadline is considered to be a waiver of such exemption.

Property Tax Landscape in Arizona and Beyond

In Arizona, property taxes are assessed by county and based on market value, with limitations set by Proposition 117 on annual increases for primary residences. Tax rates vary by jurisdiction, and exemptions are available for seniors, disabled individuals, veterans, and more. Property owners can appeal assessments.
 

Arizona has some of the lowest property taxes in the United States. The average property tax rate in Arizona is 0.72%, which is well below the national average of 1.07%. The property tax rate is determined by each county, and there is a wide range of rates across the state. For example, the property tax rate in Maricopa County is 0.68%, while the property tax rate in Yavapai County is 0.88%.


The amount of property tax you pay is based on the assessed value of your property. The assessed value is not necessarily the same as the market value of your property. The assessed value is set by the county assessor, and it is based on a number of factors, including the size and location of your property, the quality of construction, and the recent sales of comparable properties.

Home Insurance

Home insurance, also known as homeowners insurance or property insurance, is a type of insurance policy that provides financial protection to homeowners against various risks and perils that could damage or destroy their property. This insurance coverage helps homeowners recover financially in case of unexpected events that result in damage to their homes, or belongings, or liability for injuries or damages to others that occur on their property.

Coverage Types and Options 

When it comes to protecting your most valuable asset, understanding your options is essential. Home insurance offers various types of coverage to ensure you're safeguarded against unexpected events. Here are some key coverage types:

 

  • Dwelling Coverage: This protects the structure of your home itself, including its foundation, walls, roof, and more.

  • Personal Property Coverage: Covers your belongings, such as furniture, electronics, and clothing, in case of damage or theft.

  • Liability Coverage: Offers financial coverage in the event someone gets hurt on your premises and you are deemed liable.

  • Additional Living Expenses: Helps with temporary housing and living expenses if your home becomes uninhabitable due to covered events.

Factors That Determine Coverage Needs for AZ (Arizona)

When considering homeowners insurance in Arizona, there are several factors that will determine the coverage you need. These factors can vary from person to person, but it's important to understand them in order to make an informed decision about your policy. Here are some key factors to consider:

Location - The location of your home plays a significant role in determining your coverage needs. Arizona, a landlocked state, does not have coastal-related risks. However, there are still factors to consider, such as flood-prone areas and high-crime neighborhoods. Yuma County in the southwestern part of the state can experience flash floods during monsoon season, posing a flood risk. Major cities like Phoenix and Tucson have neighborhoods with varying crime rates; areas like Maryvale and South Phoenix in Phoenix and parts of the south and southwest in Tucson have reported higher crime rates historically. Researching local crime statistics, flood risk, and taking appropriate safety measures are essential when selecting a place to live in Arizona, tailored to one's risk tolerance and lifestyle preferences.

  • Coastal Proximity: For homes located near the coast, there may be increased risks associated with hurricanes, storm surges, and coastal erosion. It's important to have coverage that protects your property from these potential threats.

  • Flood Zones: If your home is located within a flood zone, it's crucial to have flood insurance coverage, as standard homeowners insurance policies typically do not cover flood-related damages.

  • High-Crime Neighborhoods: Homes situated in areas with higher crime rates may require additional coverage for theft and vandalism. This can help protect your property and belongings in case of unfortunate events.

Dwelling Features - The characteristics of your home also influence your coverage needs. Factors such as the age, size, construction materials, roof type, and overall condition of your dwelling can impact the cost of insurance and the level of coverage required.

Property Value - The value of your home determines the amount of coverage you need to adequately protect your investment. It's essential to insure your home for its replacement cost, ensuring that you would receive enough compensation to rebuild or repair any damages.

Personal Belongings - The value of your personal belongings inside your home is another crucial aspect to consider. Expensive items such as jewelry, artwork, or electronics may require additional coverage through personal property endorsements or scheduled personal property policies.

Tips for Lowering Your Homeowners Insurance Premiums for AZ (Arizona)

Homeowners in Arizona are often looking for ways to save on their insurance premiums. Here are some helpful tips to lower your homeowner's insurance costs:


  • Explore Options: Don't just accept the initial quote you get. Make an effort to obtain and compare estimates from several insurance providers.

  • Increase Deductibles: Think about increasing your deductible if you can afford a larger upfront cost during a claim.

  • Combine Coverage: A lot of insurance firms provide discounts when you merge various policies, like home and car insurance. Inquire about the potential savings when obtaining quotes.

  • Improve Home Security: Installing smoke detectors, burglar alarms, deadbolt locks, and other security measures can reduce the risk of damage or theft, leading to lower premiums. Be sure to inform your insurer once you have implemented these security features.

  • Maintain Good Credit: In many states, including Arkansas, insurance companies can use your credit score to determine your premiums. Keeping a strong credit rating can assist in reducing your insurance premiums.

  • Stay Claims-Free: Building a claims-free history can often lead to discounts on your premiums. Avoid making smaller claims and save your insurance for significant losses.


By implementing these tips, homeowners in Arizona can potentially enjoy significant savings on their homeowner's insurance premiums while maintaining adequate coverage.

Trends in Homeowners Insurance Rates for AZ (Arizona)

Homeowners insurance rates can fluctuate over time due to various factors. Staying informed about the trends in homeowners insurance rates helps homeowners in Arizona make educated decisions regarding their policies. Here are some recent trends worth considering:

 

  • Increasing Material and Labor Costs: The cost of building materials and labor can impact homeowners insurance rates. In recent years, the rising prices of construction materials and the demand for skilled labor have contributed to an increase in insurance premiums.

  • Climate Change Impact: Climate change can result in an increase in severe weather events, including hurricanes, storms, and floods. These events can cause significant property damage and result in insurance companies adjusting their rates accordingly.

  • Technological Advances: Advancements in technology have led to improved methods of assessing risks and deciding insurance premiums. Insurance companies are increasingly leveraging data and analytics to determine rates, resulting in more accurate pricing based on individual risk profiles.

  • Market Competition: The competitive landscape among insurance companies in Arizona can influence rates. When multiple insurers compete for customers, it can lead to more competitive pricing and potential savings for homeowners.

  • Legislative Changes: Changes in local or state laws can also impact homeowners insurance rates. It's important to stay informed about any regulatory changes that may affect your premiums.

 

Keeping an eye on these trends helps homeowners in Arizona understand the factors driving insurance rates and make informed decisions when purchasing or renewing their policies.

Average Homeowners Insurance Costs for AZ (Arizona)

Understanding the average homeowners insurance costs in Arizona provides homeowners with a benchmark for comparison. While individual premiums can vary based on numerous factors, here is an overview of the average costs in the state:

 

  • In August 2023, the average yearly cost of homeowners insurance in Arizona is $1,667, amounting to $139 per month. This cost is notably 5% less than the national average expenditure of $1,754 per year.
     

  • This average cost, however, can vary depending on the factors discussed previously, such as location, dwelling features, property value, and personal belongings.

  • Coastal properties or areas prone to flooding may experience higher premiums due to increased risks.

 

  • It's important to note that this average cost is for a standard homeowners insurance policy and does not include any additional coverages or endorsements.

 

  • Homeowners should request personalized quotes from insurance companies to obtain accurate estimates based on their specific circumstances.

 

By understanding the average homeowners insurance costs in Arizona, homeowners can better budget for their insurance expenses and ensure they have appropriate coverage without overpaying.

Arizona State Average Insurance Premiums by Dwelling Limit

Mortgage Resources in AZ (Arizona)

Mortgage resources refer to various tools, information, and support available to individuals seeking to obtain or manage a mortgage loan.  Mortgage resources are valuable for both first-time homebuyers and existing homeowners looking to refinance or better understand their mortgage options.

Brighton Bank Mortgage Services

Are you looking for reliable mortgage services in Arizona? Look no further than Brighton Bank! We are dedicated to helping you achieve your homeownership dreams with our range of mortgage solutions tailored to meet your unique needs. Whether you're a first-time homebuyer or a seasoned real estate investor, Brighton Bank is here to assist you every step of the way.

Why Choose Brighton Bank for Your Mortgage Needs?

1. Personalized Service: Our team of experienced mortgage experts will work closely with you to understand your financial goals and find the right mortgage product that fits your budget and lifestyle.

2. Competitive Rates: We offer competitive interest rates and loan terms to help you save money over the life of your loan. Our goal is to make homeownership affordable for you.

3. Simple Pre-Approval Process: Getting started on your homeownership journey is easy with Brighton Bank. You can kickstart the pre-approval process today with just a few simple steps.

Start Your Homebuying Journey with Brighton Bank

Ready to take the first step towards homeownership in Arizona? Click the button below to begin the pre-approval process with Brighton Bank. Our team is excited to work with you and help you achieve your homeownership dreams!

Local Economic Factors in AZ (Arizona)

Beyond your mortgage payment, it's essential to consider the local economic factors that can impact your financial stability and property value in Arizona:


  • Employment Opportunities: The availability of jobs and the health of local industries play a role in  your financial security and ability to meet mortgage payments.

  • Market Trends: Real estate markets can experience fluctuations in prices. Our team can provide you with insights into current market trends to assist in your decision-making.

  • Infrastructure and Development: Development projects, transportation networks, and infrastructure improvements can affect the desirability and value of properties in certain areas.

  • Property Value Trends: Understanding how property values have changed over time can give you a sense of the potential appreciation of your investment.

Terms Explained

Using a mortgage calculator is a simple and efficient way to estimate your monthly mortgage payment. By entering essential details like the loan amount, interest rate, and duration of the loan, you can swiftly determine your monthly payments. It's crucial to note:

  • Loan Amount (Principal): This is the total amount of money you're borrowing to purchase the property.

  • Interest Rate: This is the annual interest rate on the loan. Make sure to convert this to a decimal by dividing it by 100.

  • Loan Term: The loan term is the number of years you have to repay the loan. It's usually expressed in years. Typical loan terms are 15, 20, or 30 years. A longer-term typically results in lower monthly payments but more interest paid over time.

  • Down Payment: The down payment is the initial amount of money you contribute toward the purchase price of the home. It's usually a percentage of the home's price, and a larger down payment can result in lower monthly payments.

  • Amortization: Amortization is the process of gradually paying off your mortgage over time through regular monthly payments. Early on, a larger portion of your payment goes toward interest, while later in the loan term, a larger portion goes toward paying down the principal.

  • Closing Costs: These are the fees associated with finalizing the mortgage and completing the home purchase. They can include things like appraisal fees, attorney fees, title insurance, and more.

  • Housing Market: The housing market refers to the buying and selling of residential properties. It includes all the activities and transactions related to homes, apartments, and other types of housing.

  • Mortgage: A mortgage refers to a loan acquired to buy a home, where the property acts as security for the borrowed amount.

  • Private Mortgage Insurance (PMI): A type of insurance that is often required by lenders when a borrower puts down less than 20% of the home's purchase price as a down payment. It's commonly used to mitigate the increased risk associated with lower down payments.

  • Debt-to-Income Ratio: A financial metric used by lenders to assess a borrower's ability to manage their debt payments in relation to their income. The DTI ratio helps lenders evaluate the borrower's financial stability and the likelihood of repaying the loan.

Frequently Asks Questions About Mortgages in Arizona

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