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Today’s Rates for First Time Homebuyers in Utah
Tuesday, February 9, 2016
Mortgage rates are at 4.33% for the 30 year fixed loan program and at 3.46% for the 15 year fixed. As for variable rates, the 5/1 ARM rate currently stands at 3.50%. Check out FHA and VA rates as well if you are doing low or no down payments.
Utah First Time Home Buyer Checklist
Decide on your loan program options. If you're moving to an eligible area, you may qualify for a zero down payment loan through USDA. Veterans may be eligible for VA loans, which do not require cash down. The content in the paragraphs below should give you an idea of where you may fall.
Get familiar with your credit score. Your credit should fall somewhere above 600, but few lenders accept scores in the high 500s. If your credit score needs a boost, work on improving it before you try to take out a mortgage. Once annually, you're able to request a free credit report from the three major credit bureaus, Equifax, Experian or TransUnion.
Shop interest rates from different lenders in your part of Utah. Choose one who not only provides a great offer, but carries a high rating from the Better Business Bureau.
Get pre-approved. Once you've picked a lender, provide income documentation with your last two pay stubs and tax returns from the past two years.
Determine a budget. You could be pre-approved for a loan amount that is bigger than you had anticipated, but do not base affordability on the sum provided. Remember - pre-approvals are not guaranteed, and only you know what you can truly afford.
Begin home shopping. Be sure to avoid making extravagant purchases, taking out new installment loans, or anything else that could weaken your financial standing. Lenders will check your accounts again before closing your loan.
Low Down Payment Loans Through FHA
If you’re a first time home buyer without a lot to put down, a Utah FHA loan may accommodate you. FHA loans are backed by the government and designed to help home buyers with limited upfront funds receive financing.
Down payment: 3.5%
Minimum acceptable credit score: 580 (varies)
Mortgage insurance: Upfront (1.75% loan amount) and monthly
Property guidelines apply and are verified via home inspection
You can find additional information about FHA loans on the Utah page of the FHA website.
No Down Payment Loans Through USDA
The United States Department of Agriculture backs home loans for zero down to Utah home buyers looking to move to or live in rural areas. Find out if your buying city is eligible by searching the USDA's property map. Note that popular areas like Salt Lake City, Ogden and Sandy are not eligible.
Down payment: None required; financing up to 102% available depending on home appraisal
Minimum acceptable credit score: 620
Mortgage insurance: Upfront (2% loan amount) and monthly
Income maximums apply
Utah Grant and Assistance Programs
Eligible Utah first time home buyers can take advantage of UHC, or Utah Housing Corp, loan programs for state residents. There are a few options available. Take note of the down payment assistance that can be used in conjunction with each; the assistance must be paid back:
FirstHome Loan - 6% down payment or closing cost assistance
HomeAgain Loan - 6%
Score Loan - 4%
NoMI Loan - 4%
The NoMI loan is the only program that is not financed via FHA or VA, and is instead backed by Fannie Mae as a conventional product. It has a 700 minimum credit score requirement. To see the rest of the requirements and other details, visit the UHC page for Utah resident loans.
Program participants may also qualify for the Homebuyer Tax Credit, or mortgage tax incentive program. It enables borrowers to decrease their federal withholding and bring home up to an additional $2,000 per year. The savings will hopefully assist home buyers in keeping up with their monthly payment. There are no location restrictions, so even popular cities like Salt Lake City, Sandy, and Ogden are eligible.