Mortgage Lenders

Are You Making the Same Mistakes Most People Make When Buying a House with No Down Payment?

Low down payment to no down payment mortgage options enables more Americans to achieve the dream of buying house St. George. In this post, we analyze the things you should not miss while buying a house with no down payment in St. George.

1. Evaluate the Different Options Available

The worst mistake homebuyers make and especially those applying for a mortgage to purchase a home, is not evaluating the different mortgage options in today’s lending landscape.

For instance, just because the mortgage broker has mentioned that the mortgage type “Y” is no down payment mortgage, the applicant hurriedly submits the applications without evaluating the other options. You might be surprised later when you come to learn that the zero down payment mortgages you ignored, ends up becoming the best option if time was taken to evaluate the options.

To avoid regrets in the future, make sure you evaluate the mortgage options that are available before you sign the mortgage application paper. Look at the different rates, the lender’s terms, and applicable conditions. Careful analysis of the underlying terms and conditions helps to uncover important items that could be overlooked easily.

2. Ensure you Apply for Pre-approval With different Lenders

The FHA, USDA, and VA home buying programs are categorized under the low down payment and no down payment options. These mortgage options are provided through the licensed mortgage lenders in St. George. The mortgage lenders will apply different terms and conditions when lending to applicants, so long as it is within the guidelines set by the program administrators who in this case are FHA, USDA, and VA.

For instance, to attract more borrowers, a mortgage lender may ensure a faster mortgage processing time and lower interest rates to the borrowers. This is why it is advisable for the borrower to seek preapproval from different mortgage lenders. The objective remains to find the mortgage lender who offers attractive terms.

3. Pay off Existing Debts and Set Aside an Emergency Fund

Whether applying for a low down payment mortgage or the no down payment mortgage, the reality is that you will be required to repay the debt. Monthly repayments should be made when due to avoid blacklisting and possible property repossession.

During the mortgage repayments fund, chances are that you may have very little left to finance daily expenses. The amount saved before borrowing the mortgage can be used to pay some of the daily expenses like paying for your children’s education, funding healthcare and so much more.

In that regard, before signing the application for a low down payment mortgage, make sure you have some amounts in savings to cushion your family during the mortgage repayments period.

4. Never Borrow More than you Can Repay

The fact that it is t low down payment mortgage could tempt the borrower to borrow more than he can afford to repay. Experts advise that mortgage borrowers need to evaluate how much property they can afford to repay before signing the application forms. This is the right step towards ensuring you are not trapped in debts that you will struggle to repay.

5. Ask mortgage Lender About Cost-Saving Programs

To help offset the upfront costs; mortgage lenders provide professional advice to the borrowers. In addition, the mortgage borrower may be required to take a homebuyer program to be eligible for the no down payment mortgage. These lessons are important and could reveal different strategies to assist with cost-saving.

6. Check your Credit

When applying for a mortgage, credit is one of the key factors in whether the mortgage lender will consider the application. Make sure you have checked the credit score before the start of the home buying process. Consider that credit score will determine the interest rate and counts when determining the terms and conditions imposed by the mortgage lender. In that regard, make sure you check your credit and dispute any errors that could be dragging your credit score.  in case of a poor credit score, look for opportunities to help improve the credit. This could include paying off existing debts and ensuring bills are cleared on the due date or before.

7. Hire the Right Buyers Agent

Buying a house in St. George is a rigorous exercise especially when it comes to moving from one neighborhood to another in search of the ideal home. However, finding the right buyers agent will help you through the process of shopping for the right home. An experienced buyers agent will also advise you when it comes to picking the right mortgage. Consider that mortgage lenders work closely with buyers real estate agents in a bid to find more borrowers.

Are you buying a house in St. George? Chances are that you qualify for low down payment or no down payment mortgage. If applying for a low or no down payment mortgage, do not miss the things highlighted in this article. 

Home Loan

No, You Don’t Have to Make Tons of Money to Buy a House in Utah

Buying a house remains a major milestone in one’s lifetime.  However, the reality is that more U.S. households live in rental homes. The reason we have more renters than homeowners could be a lack of information, while others consider that their current income is too low to finance the dream of building or buying a new home.

It is common knowledge that buying a home takes a huge financial commitment. Nevertheless, the question remains, how much do you need to make to buy a house?

For us to answer this question, we need to understand the costs associated with purchasing a house.

Understand the Homebuying Costs

When it comes to purchasing a property, a majority of new home buyers think that the total cost of property ownership is the amount asked by the home seller. However, the reality is that there are several costs other than the amount asked by the home seller. Here is an overview of the costs of buying a house.

  • The Down payment: when buying a house, one of the biggest expenses from the onset is your property down payment. Regardless of the amount you are earning, you should start saving for the down payment earliest possible. A majority of mortgage lenders will require up to 20% down payment. However, some home-buying programs require zero down payment, while others will require a low down payment, as low as 3.5%.
  • Lender Based Costs: When you apply for a mortgage, the lender will apply different charges payable by the borrower. For instance, you may be required to pay an origination fee, mortgage underwriting fee, appraisal fee, and a host of other charges. Make sure you have a clear understanding of what these costs will be before choosing the mortgage lender. The reality is that some mortgage lenders will waive some of these costs, while others charge different rates.
  • Transfer of Ownership Fee: This is one of the often, overlooked fees when purchasing a property. You will see charges for the title search, title settlement, and title transfer fees.
  • Private Mortgage Insurance: depending on the mortgage type, the borrower might be required to purchase the mortgage insurance. Mortgage insurance is a requirement on all the FHA and USDA loans.
  • Mortgage Interest: An obvious cost is an interest paid on the mortgage you have borrowed. The interest rate depends on different factors. However, the obvious is the credit score. You will find that buying a house with bad credit attracts a high-interest rate, compared to interest rates charged to a borrower with a solid credit score.

Understanding the above costs will help in estimating how much you need to buy a home in Utah. The beauty is that there are important tips to help in keeping the costs associated with buying a house at the lowest margins. So, how can you buy a property at cheaper rates?

1. Work on your Credit Score

Before you think of filling the mortgage application form, the first thing to do should be checking your current credit score. The reality is that buying a house with bad credit can get tough. Consider that mortgage lenders will conduct a credit report check before determining the interest rate on your mortgage. With a high credit score, you could negotiate a lower interest rate on a house-buying mortgage.

2. Evaluate the Available Home Buying Programs

Different home buying programs are available in Utah. The terms and conditions vary from one mortgage option to another. Let us review the different home buying programs highlighting what they mean to the mortgage borrowers.

  • The FHA Mortgage: The Federal Housing Administration backs the FHA mortgage. The mortgage offers friendlier terms and conditions starting with a low down payment requirement.
  • The USDA Mortgage: The United States Department of Agriculture gives zero down payment mortgages to borrowers who qualify their criteria.
  • The VA Mortgage: Veterans Associations backed mortgage allows qualified borrowers a zero down payment mortgage.
  • Conventional home loans: The conventional home loan requires a high down payment of up to 20% while the qualification criteria are stricter compared to the optional mortgage options analyzed above.

The FHA, USDA, and VA mortgage options are available to qualifying members and provide a cheaper alternative.

3. Seek Professional Advice

When it comes to the financial aspect of buying a new home, it is important you seek advice from qualified experts. Approach an experienced loan officer for advice on the best mortgages. The expert will take you through available mortgage options, advising you on the qualification criteria. Seeking professional advice is an important step especially when it comes to ensuring that you are making informed decisions.

4. Seek Pre-approval From Multiple Mortgage Lenders

Now that you understand the different mortgage options available, you have verified that your credit score meets the minimum requirements, it is time to seek mortgage pre-approval. However, never make the mistake of wanting to apply with just a single mortgage lender. Visit different mortgage lenders in your area and apply for pre-approval. Look at the interest rates and the total cost of the mortgage. The objective is to apply for a mortgage that is cheaper and at a lower interest rate.

No matter how much you are earning, you can afford to buy a house in Utah. However, the important consideration is making sure you take into consideration the tips shared herein.

Is it Better to Rent or Buy? Find Out Which One is Better For You

To rent or buy a home is a debate many people find themselves in quite often. Well, we see many families opting to buy a house whereas they would be better off renting. However, home buying comes with an opportunity cost. This is in the form of earning on tax deductions, while at the same time, home buying means an investment that can grow over time. Similarly, renting comes with minimal responsibilities and extra flexibility. 

Of the two options, home buying is a solid decision compared to home rentals. In fact, homeownership is the American dream!

Here are important points to bear in mind when it comes to Renting vs. Buying endless debate!

In this post, we examine what it means to rent or to buy a home.

Home Buying Vs Home Rentals

Owning a home and renting a home comes with different risks alongside several obvious benefits. Before you have settled on buying a home, you want to decide whether it is the right time to take that bold step. 

If you are tired of the endless home rentals and looking for motivating factors to get started with homeownership, here you go! 

1. Home buying Comes with Stable Monthly Payments

A majority of first-time buyers obtain a mortgage to finance their homeownership dream. Chances are that the mortgage is based on fixed-rate monthly repayments. After all, the fixed-rate mortgage is the most popular right now. Therefore, the monthly payments will be predictable for a period of years. The stable monthly payments make home buying such a convenient option compared to renting

On the other side, we have home rentals where the monthly repayments can change from year to another. Under most circumstances, the landlord will set the monthly rent and serve the tenants with a new bill. This is mostly when renewing the lease agreements.

Stable monthly repayments come with a peace of mind. This is because one can come up with a long-term budget, which is important for personal financial planning. However, some monthly payments like property tax can change, but with a very small margin which is sometimes negligible.

2. Homeownership comes with an Opportunity to Build Equity

When it comes to homeownership, property equity is what comes into mind. In real estate, property equity refers to the current value of the property minus the total property ownership cost. Consider that property ownership cost takes into consideration things like a mortgage, and property maintenance costs. The value of a property will increase over time, and chances are that property maintenance cost gets lower. In the end, as the property value increases, the owner is left with larger equity.

However, getting stuck on monthly rent cycles means you are helping the landlord repay the mortgage. In other words, the landlord is using your monthly rent payments to build property equity. 

3. Homeownership comes with Tax Advantages

Not many people enjoy paying taxes. Unfortunately, paying taxes remains necessary for all of us. Getting tax relief is a cause to celebrate. Did you know that homeownership comes with some tax relief benefits?

Well, owning a property comes with the option to deduct the paid monthly interest from the tax returns. This means that as you pay interest on the mortgage, you are deducting some amount from the tax payments account. The tax deduction is a huge saving for those who borrow a mortgage to purchase a property.

If you are still living on a rental, tax relief based on the monthly rent is not foreseeable.

4. Freedom to Make Changes

One of the major factors you need to consider when deciding to rent or buy a home is the ability to make changes when need be. For instance, you may want to add a room or even repaint the living room. The terms under the lease agreement will not allow a tenant to make the changes without express permission from the landlord. However, homeowners enjoy the ability to make changes whenever they like.  This means that if you are inviting the in-laws to live with you, or you want to accommodate your grandchildren, you can opt for a room addition without having to answer questions to anyone other than applying for the relevant home renovation permits with local authorities.

5. Buying a Property is Cheaper Overtime

Buying a home comes with a host of payments. The costs include down payments, appraisal fees, homeownership cost, interest on a mortgage, and other hidden costs. These costs could feel a huge amount at first. Over time, the interest on a mortgage will be paid in full, no more appraisal fee and cost of property maintenance could come down. On the other side, rent repayments will in most cases increase as you renew the lease agreement or when renting a new property. This shows that cost of homeownership is considerably cheaper than the cost of home rentals.

Buying Vs renting feels like a tough decision to make. However, if the items raised here are taken into perspective, home buying is the best decision you could make today.

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.

Home Buyers in Utah

7 Surprisingly Easy Ways on How to Rent Out Your House and Become a Successful Landlord

Do you envision yourself sitting back and collecting monthly rent from your tenants?  For the majority of home renters, coming out of rent cycles into homeownership and eventually renting a home, as a landlord, seems to be another episode of mission impossible.

However, did you ever pause to think that you could rent a house and become a landlord within an unbelievably shorter time? In this post, I outline some important tips to help you come from being a tenant to homeownership and eventually venture into home rentals business.

1. Smart Financial Planning

The question of how soon you can become a landlord depends on how well you plan your finances. No matter how small your income might appear, your potential is limitless. Here are some important tips to help you make smart financial plans geared toward becoming a landlord.

  • Find out how you spend the current earnings
  • Set long term financial goals
  • Prepare for unexpected with insurance cover
  • Keep an eye on your credit
  • Open a savings account
  • Keep track of your financial goals

The tips shared above will help you to come up with proper financial planning while making sure you spend your money only on things that matter.

2. Focus on Building a Strong Credit Score

The journey to homeownership can be tough without working with a mortgage lender. The truth is that a majority of mortgage lenders will require a minimum credit score to lend you money that can start a good home rentals business.

The journey to a strong and solid credit score should start early enough. It is unfortunate that a majority of people want to wait until it is time to apply for a home mortgage, to start working on their credit score. A clean credit score is a huge step to starting home rentals business today. Here are some important tips to help you build a credit score quickly.

  • Make sure you have settled outstanding bills on time
  • Limit requests for new credit
  • Keep the old accounts open and deal with delinquencies
  • Review your credit score on a regular basis

A good credit score means you are eligible to borrow a mortgage anytime you are ready to start your home rentals business. Moreover, a high credit score lets you negotiate for cheaper mortgages.

3. Focus on finding the Best Mortgage Lenders in your Area

Now that you have a positive credit score, the next item in our tips is researching the different mortgage lenders. The objective is to find what mortgages they are offering and at what rates. A common mistake, especially among first-time mortgage lenders, is sticking just to one mortgage lender just because you are banking with the same bank. The reality is that the other mortgage lenders out there could provide cheaper mortgages and more convenient mortgage terms. In that regard, take time to find out the best mortgage lenders near you.

4. What are the Different Mortgage Options

What mortgage options can you apply under? There are different first-time homebuyer programs available within the mortgage market today. Examples include:

  • VA home loan
  • FHA mortgage
  • USDA home loan
  • Conventional home loan

The home mortgage options come with different requirements. Find out which home buying program best suits your current requirements, and research whether the mortgage lenders provide financing under the particular home mortgage option.

5. Make Sure You Borrow Only What You Can afford To Repay

Mortgage lenders will pre-approve you for amounts that you may not need. Some first-time homebuyers have fallen victim to mortgages they cannot afford to repay. It is always advisable that you borrow a home mortgage that you can afford to repay. Borrowing an amount that you struggle to repay could end up getting you into trouble with the mortgage lenders and the property listed for repossession.

6. Work with a Reliable Real Estate Agent

Real estate agents play an advisory role when it comes to purchasing a home and even building home rentals. In that regard, it is always advisable that you work with a reliable agent who will advise you on the best places to purchase or build a rental unit. in addition, the real estate agents will advise the client on the best types of home rentals to consider. Do not hesitate to seek the guidance of real estate agents when finding a mortgage lender near you.

7. Know the Laws

The home rentals business has guiding rules and regulations that must be adhered to. The home rentals regulations are put in place to make sure there is proper guidance on how tenants and their landlords relate. New landlords need to read and understand the prevailing regulations. 

Are you ready to jump out of the current rent cycles into the home rentals business? All that it takes is proper financial discipline and working with reliable mortgage lenders. Come up with a financial plan and work on a credit score. Do not overlook the importance of researching different mortgage lenders to find out their rates and the rules that apply.

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.