USDA Home Loan in Utah

Pros and Cons of Renting vs. Buying – Is It Better To Rent Or To Buy?

Whether to rent or buy a home remains an overwhelming question for a majority of Americans. Everyone holds an opinion when it comes to renting vs. buying. Sadly, not even experts have managed to hold back their two cents on the question of home renting or home buying.

So, what are some of the pros and the cons of renting vs. buying? Is it better to rent or own a home?

In this post, we look at the advantages and disadvantages associated with home renting vs. buying. If you are on the fence about buying a home or renting, here are some ideas to backup your argument. Let’s start with home renting:

Home Renting

A recent report shows that more people are renting their homes right now than at any point 50 years ago. In 2016 close to 37% of households lived in rental properties. This can be attributed to the larger amounts of student debt, fears from the housing crash of 2008, and a myriad of other reasons.

So, what are the pros and cons of renting properties?

Advantages of Renting a Home

Renters Pay a Lower Property Maintenance

A homeowner or landlord is typically responsible for all property maintenance and repairs. When you rent a property, you can contact your landlord when something is broken or if the home needs unexpected repairs. It’s usually the responsibility of the landlord to fix the leaky faucet and unblock the sewer line.

However, this is not always the case! When renting a house, go through your lease agreement to understand your responsibilities when it comes to property maintenance costs. If you cause damage to the rental, your deposit may be withheld for repairs after you move out.

Renters Enjoy Easy of Mobility

Renting a property means a shorter-term commitment. If you are known to wander from one city to another like in the case of changing job requirements, it could be better to rent instead of buying a property. By renting a property, it is easier to get up and relocate to a different city. If you aren’t planning to be in the home for a long time, renting might be your best choice!

Renting is Associated with Lower Upfront Costs

Buying can sometimes come with more upfront costs compared to renting. This includes your down payment and closing costs. For rental properties, you need to pay the initial month’s rent and a deposit as required by the property managers. This can be less than the upfront costs of getting a mortgage on a home.

Those are some of the advantages of renting a property. Now let us shift the attention to the disadvantages of home rentals:

Disadvantages of home rentals

Tenants not allowed remodeling or decorating the property

If you choose a home rental, know that you can’t make changes to the property. For instance, you cannot modify the features of the home without the express authority of your landlord. This gives you less freedom to make the home your own. You can’t change the paint color, update the finishes, or put holes in the walls without permission from your landlord.

Renting Means You Are Paying Someone Else’s Mortgage

When you are renting, all of your rent money goes toward paying someone else’s mortgage payment. You don’t get any return on your investment. At the end of your lease term, the only return may be getting your deposit back. If you were to buy a home, you would be paying your own mortgage and putting money into your home’s equity. You can eventually use this equity later on either during the sale of the property or if you were refinancing the home to pull cash out.

Home Buying

A report published by the Statista Research Department in 2016 showed that 68% of the respondents were homeowners. This shows that more Americans prefer home buying as opposed to home rentals.

Homeownership comes with various benefits. Let us look at some of the advantages of owning a property.

Buying a Property Comes With A Mortgage Interest Deduction

One of the best deals enjoyed by homebuyers is the deduction of 100% mortgage interest paid in that year. The money you spend on your mortgage interest is tax-deductible, possibly resulting in thousands of dollars in savings.

A Home is an Investment

When you purchase a property, it’s yours to make your own. Depending on the property type, you are free to rent it out or even sell at a profit. You can keep a home you have purchased for your lifetime.

Enjoy the Freedom to Modify or Decorate the Property

So long as you are the property owner, you have the freedom to make changes to the home. You can make additions, knock down walls, install upgrades, and whatever else suits your families needs.

Disadvantages of Home Buying

The Homeowner pays for Property Maintenance

Property maintenance can be expensive, but there is no way around it. If you want to ensure your property does not depreciate, you have to keep up with the property maintenance cost. Every few years you may have to invest in updating your home. Examples being: replacing your roof, installing a new water heater, updating your appliances, and upkeep on your landscaping.

Cope with Housing Market Uncertainty

Are you buying a property with an intention to resell in the future? There is a small risk that your property may lower in value due to economic shifts. The housing market is typically predictable, but there is always a possibility for it to fluctuate.

Renting vs. buying has been an ongoing debate for decades. If planning to rent or buy a home, refer to this article to make a better decision. If you are looking to purchase a home, we would be happy to answer any questions you may have.

Home Loan

How to Buy a House in Utah With a Bad Credit Score?

Barely anyone wants to keep writing rent checks each month. Buying a house is the secret to breaking out of that rent cycle. A common misconception a lot of people have is that they can’t afford to pay a mortgage, which is why they choose to rent. That’s actually not true at all, there are so many options out there! There are plenty of options for low-income earners or those with a less than an ideal credit score – Which is what we’ll go over in this post, so keep reading!

1. Check Out Home Buying Programs For Borrowers with Low Credit Scores:

Borrowers who want to buy a house in Utah but have a poor credit score experience tough times finding mortgage lenders who are ready to accept their applications.

Fortunately, we have home buying programs that favor borrowers with bad credit. Here are some of the options available to home buyers with a bad credit score who are interested in buying a house in Utah.

– The FHA Loan: An option that is perfect for first-time homebuyers. The FHA home buying program is available to applicants with a minimum credit score of 580 and only requires a down payment of 3.5%.

– The VA loan: is available to veterans or surviving spouses of a veteran only. Offers benefits such as low-down payments, lower interest rates, and flexibility when it comes to a lower credit score.

– The USDA Rural Housing Loan: Although a majority of lenders will require a 640 FICO score, some will go as low as 580, making this an option for borrowers with a low credit score. This loan applies to rural areas, not big cities. Check with a loan officer to see if the home you are looking to buy can qualify for a USDA loan.

If you have been denied a conventional mortgage due to poor credit score, check for mortgage lenders authorized to lend the FHA, VA or USDA home mortgage loan types. Those home buying programs simplify the experience for those looking to purchase a property but have a poor credit score.

2. PMI & Higher Interest Rates:

Some Mortgage lenders will have to offer borrowers with a low or bad credit score higher rates as a way of protecting themselves from defaulted payments. Or if you’re not already familiar with Private Mortgage Insurance, that’s something that might have to be added onto your monthly mortgage payment. Please note that you can refinance later on down the road to get that removed and it doesn’t have to be endured forever.

3. Raise a Large Down Payment:

A large down payment is another poor credit compensating factor. Talk to your mortgage lender to find if they can consider a larger down payment as compensation to your low credit score. Some mortgage lenders may consider this option but charge you a high-interest rate, as an extra protection measure. Two things may happen when you offer a higher down payment:

– It shows the mortgage lender you are willing to take on more risk on the home loan, thus they may take the risk to lend to you.
– The lender finds a reason to believe you will pay the mortgage in full since you have invested more of your own money from the beginning.

4. Clear up Credit Score Errors:

Check your credit report for any errors. You may have a lower credit score by mistake. Request for a full record showing what led to the low credit rating. Be willing to make those phone calls and see if you can negotiate to clear up your record. It’s worth it to do everything you can to help raise your credit score.

5. Boost Your Credit Score:

If neither of the above options works, boosting your credit score could be your only alternative. In that regard, check your credit score online and come up with strategies to boost the current score. There are more than enough programs out there you can follow to help you do so.

Consider repaying all the outstanding debts, and try not to get any more loans till you can minimize what’s already on your plate. Over time, your credit score will begin to rise. You can also speak to one of our loan officers to see what is the most important items to take care of first to boost your score more quickly. This alternative requires some patience, and it is not automatic, but in the meantime, you could kill two birds with one stone and start saving for a down payment as well. Six months could make a big difference, it doesn’t have to be years and years of saving!

6. Save Diligently and Pay for the Property in Cash

Open a savings account and start putting money aside that you can use to buy a house in Utah. Note that you need to ensure a disciplined saving pattern in order to achieve the dream of buying a house in Utah. Most people will not go this route & need to be in a home sooner rather than later, but it is still an option, and worth giving it a mention.

7. Cash Out Some Assets To Buy a House in Utah

You know that set of four-wheelers you got 2 summers ago that you never ride? Or that grill you only ever use once or twice when the in-laws come over? You could sell them! There’s probably a lot of things you don’t use daily that you could make some serious cash on. This could be a quick way to raise cash to use to put toward a down payment.

Hopefully, this post has helped instill a sense of hope for your journey to becoming a homeowner in St. George, Utah. I know it can be tough to get your ducks all in a row but there are so many great opportunities and options out there available to see you get into your forever home. For any of your financing questions, you may have, feel free to reach out to any of our friendly & knowledgeable Loan Officers here at Sun American Mortgage. They would be happy to give you some solutions & options to get you into your forever home.

Mortgage Lenders

Tips for Buying a House with Low Down Payment in St. George, Utah

The prospect of raising a 20% down payment has become a major hurdle. In fact, raising the down payment could delay the dream of home ownership by quite a few years, and I understand many families don’t want to, or simply can’t put those dreams on hold that long. As a result, many people are forced to continue paying monthly rent because they cannot afford a huge down payment on a home.

Don’t be discouraged! There are low down payment home loan options. If you are getting ready to purchase a property, you may be considering the no down payment or low down payment options.

The good news is that there are mortgage lenders requiring little or no money down to finance your dream of owning a home. Low to down payment mortgage allows first-time home buyers and repeat homebuyers to own a property by only covering the closing costs and possibly a small down payment.

Here are some of the options you may want to consider to make the homeownership dream a reality:

1. The US Department of Agriculture Home Loans:

Available at as little as 0% down, the USDA home loan provides up to 100% financing on home mortgages.

The USDA home loan is also referred to as the Rural Housing Loan. As the name depicts, the USDA home loan is available to those willing to purchase a property in suburban neighborhoods.

The objective of the USDA home loan is to reach the low to moderate-income homebuyers by providing a mortgage at 0% down.

To qualify for the USDA home loan, the borrower’s income needs to meet various guidelines. As well as the property to be purchased should be located within an eligible rural area as determined by the US Department of Agriculture.

Advantages of USDA Home Loans include:
 – Requires as little as low percent down payment.
 – USDA home mortgages are available at interest rates lower than what the market offers.
 – Features a lower monthly private mortgage insurance.
 – Flexible credit guidelines.

2. The VA Home Loans:

The VA loan is another option available to first-time buyers at a low percent down! However, only members of the US military and their spouses are eligible to borrow under the VA loan.

The United States Department of Veteran Affairs guarantees the VA loan. If you are a retired veteran or a surviving spouse planning on buying a house in St. George, you can apply for a loan under the VA program. Unlike the USDA home loan, the borrower is not restricted to the areas where to buy a property.

The VA loans provide loan sizes of up to $765,600 for those buying properties in high-cost areas.

The VA loan and the USDA home loans are great for 0% down options.

Now, let’s go over some low down payment options:

3. The FHA Home Loan:

One of the low down payment options is the FHA home mortgage. Guaranteed by the Federal Housing Administration, the FHA home loan is available to borrowers at only 3.5% down payment.

You will still need to fulfill a set of requirements though, which are:
– Borrowers must provide a valid social security number and show they are lawful residents in the US.
– The FHA home loan is available for primary residence occupancy only. Not ideal for commercial, or rental usage of the property.
– The borrower should have a minimum credit score of 580 and a down payment of 3.5%.

4. The Conventional 97 Program:

Available from Fannie Mae and Freddie Mac, this is a 3% down payment program. It’s a great option for first-time homebuyers or low-income earners. The Conventional 97 mortgage is a less expensive option compared to the FHA loan that requires a 3.5% down payment.

The borrower also has the option of using gifted funds to pay the down payment for this particular loan.

For years FHA Loans have been first time home buyers only option, and though it has many wonderful benefits, Conventional 97 offers a better reality. It has no upfront mortgage insurance fees, & has cancellable monthly PMI.

5. The HomeReady™ Mortgage:

Created in December 2015, the HomeReady™ is backed by the US Government & Fannie Mae and available through a majority of lenders. The HomeReady loan comes from a line of Conventional loans that have been reduced to help aid low-income earners to buy or refinance.

The HomeReady™ permits income pooling from all household members, making it a very good option for helping those looking to purchase a property but cannot raise the high down payment required through a regular conventional mortgage.

Hopefully exploring your options & seeing that there’s the hope of homeownership, I hope you’re looking forward to finding & buying your dream home in St. George, Utah! The high down payment requirements should not stop you. Take advantage of the low down payment or low down payment options we offer here at Sun American Mortgage, where one of our amazing loan officers can help finance the dream!

USDA Home Loan in Utah

Six ways to break the renting cycle and become a homeowner!

Recent statistics show that the national homeownership is at more than 64 percent. This is enough proof that Americans are realizing the perks that come with homeownership instead of renting.

Owning a home means you accumulate equity, on a monthly basis. Stop paying someone else’s mortgage! Here are six ways to get out of the rent cycle and into homeownership.

1. Start Saving For a Deposit

A major hurdle when trying to get your home loan approved is raising a down payment. Saving a down payment requires discipline and budgeting. Most lenders believe that a borrower who has raised the 20% down payment is less likely to default on the mortgage.

Having a larger down payment will improve your chances of qualifying for a mortgage. There are loan programs that require as little as 3.5% down on your home to qualify. You don’t always have to have 20% down to get a mortgage. Of course, saving for a down payment can be the toughest hurdle when it comes to buying a home. Don’t let this deter you from looking into buying a home!

Here are tips to save for mortgage down payment:

  • Transfer money into a separate savings account monthly
  • Skip vacations for a while and save
  • Lower your overall expenses
  • Reduce high-interest rate debts (credit cards, student loans, etc.)
  • Borrow money from friends and relatives
  • Borrowing from a retirement plan
  • Sell some investments and save the money
  • Get a second job

2. Focus on Improving your Credit Score

Having a down payment is a great start to getting pre-approved for a loan, but you also need to make sure your credit is in good shape. Your credit score helps the mortgage lenders to determine your likelihood of repaying a mortgage. The better your credit score, the more likely you are to be approved for a new line of credit like a mortgage, credit card, or car loan.

You can check the credit score online regularly. To ensure you maintain a positive credit score, consider the following tips:

  • Make sure your bills paid on time
  • Keep the credit card debt low
  • Ask for high credit limits on your credit cards
  • Check for credit report errors and dispute any mistakes
  • Don’t have your credit pulled to often

3. Research Loan Programs Aimed at First-Time Buyers

First-time homebuyer programs are out there to help you get into a home more easily. Luckily, different mortgage companies provide easy access to homeownership programs with low or no down payment options. Here is a list of the homeownership programs available to first-time homebuyers:

Check if you qualify for either of the above first-time buyer programs and apply. Various mortgage lenders provide easy qualification requirements, helping new home-buyers get out of the rent cycle. We can explore all of your loan options with you over the phone or in-person.

4. Buy a home with a friend

Did you know that you could collaborate with friends or colleagues and purchase a home? This is an easy way to pull your resources together and become homeowners together. Raise the down payment together and do home shopping. Split the mortgage payments to save money!

5. Spend Less on Rent

Save by renting in a smaller place for a while. You can downsize into a smaller, less expensive rental to save money for your down payment and closing costs. You’ll be amazed how fast you can save when you are living in a smaller rental for a bit. It might be a little cramped, but you will be able to buy your own home faster!

6. Speak With a Pro

For a majority who prefer home rentals, it is not because they are happier paying rent. It is just that they are not aware of the different options available to them. Speaking to a pro will help you skip rent cycles, and move into homeownership. Look to an experienced loan officer who will help you through the different homeownership programs.

Homeownership remains everyone’s dream. Unfortunately, many people do not know how they can move from home rentals into home ownerships. Are you looking for ways to move out of the rent cycles trap? We have looked at six tips meant to assist you. Talk to our experienced mortgage loan officer for further assistance.