USDA Home Loan in Utah

Unlock The Secrets To Buying A House In St. George Even With A Low Down Payment

Did the thought of buying a house in St. George, Utah, just cross your mind? First-time home buyers wonder how much down payment they need to save. Did you know there are low and no down payment mortgage options suitable for you? In this post, I unlock the secrets to buy a house in St. George with a low down payment. Keep reading to discover.

No Down Payment Mortgage

As the phrase depicts, no own payment mortgage is a home loan that allows the first time homebuyers and the repeat homebuyers to purchase a property with no money required.  The homebuyer just needs to pay the standard closing costs. Otherwise, the homebuyer gets to enjoy 100% financing from the mortgage lender.

If the idea of zero down payment home mortgages sounds acceptable to you, the VA home loan and the USDA home loan could be considered.

USDA Home Loan

Backed by the United States Department of Agriculture, the USDA home loan offers qualifying buyers 100% financing. Initially, the mortgage was known as the section 502 mortgage, and today it is often called the rural housing loan.

The USDA rural housing loan is available to the buyers looking to purchase properties within the rural regions. However, do not confuse this to mean that it is for the buyers living in rural areas alone. It is available to buyers in suburban areas too. Apart from being a zero own payment mortgage, the USDA home loan is a low-interest mortgage loan.

So, what are the requirements for you to qualify for this zero down payment mortgage? Keep reading to discover:

  • The household’s annual earnings should not exceed the median household income for over 15%.
  • Agree to occupy the property as the primary residence
  • Must be a US national or a qualified alien
  • The property should be within the eligible site.

The VA Home Loan

Second, in our listing of the no down payment home mortgages, we have the VA home loan. Backed by the Veterans Affairs department, the VA home loan is available to the U.S military members and their surviving spouses. Apart from being an affordable home loan, applicants enjoy several benefits. For instance:

  • You are allowed to use the property as intermittent occupancy
  • Bankruptcy and derogatory credit does not disqualify you
  • Does not require a mortgage insurance

Here are some of the requirements to be eligible for the VA home loan:

  • You are an active-duty officer and served 90 continuous days
  • A veteran who meets length-of-service (90 days in wartime and 181 straight days)
  • Surviving spouse of a veteran who died while in service or from a service-connected disability

The VA home loan is a good option for first-time homebuyers with a low credit score and does not have enough savings to afford a high down payment.

Low Down payment Home Mortgages

If you can raise a down payment of any size, you can save through lower interest rates and, generally, better loan terms. Therefore, here are some of the options to consider when it comes to low down payment loans.

The FHA Home Loan

The Federal Housing Administration guarantees the FHA home loan to ensure affordability to the first time home buyers with a low down payment.  With as low as 3.5%, first-time homebuyers can access the credit they need to achieve their homeownership dream. The FHA is also a low credit score loan type with lenient loan terms. Your debt-to-income ratio must be less than 43%. Further, you must prove that you earn a steady income. Most FHA home loans require a monthly mortgage insurance premium. Here is an overview of the requirements to apply and get approved for the FHA home loan.

  • A fico score of at least 580 to make a 3.5 % down payment or FICO score of between 500 to 579 with 10% down-payment
  • Debt to income ratio of less than 43%
  • Provide proof of income
  • Monthly mortgage insurance premium

The FHA home loans will make homeownership easier if you meet the set requirements.

HomeReady by Fannie Mae

The HomeReady loan is a 3% down payment loan. The mortgage type is ideal for middle-income homebuyers, considering borrowers who cannot make to 3.5% down payment to secure the FHA home loan. To qualify for the HomeReady loan by Fannie Mae, you must have a credit score of at least 620. With a credit score of above 680, you get better rates.

Therefore, if you are looking to purchase a home in St. George, Utah but afraid you cannot raise the high down payment, consider the low down payment or the no down payment home loan programs.

Home Loan

The Ultimate Guide To Buying A House With Bad Credit In Utah

Did you know that you could still buy a house in Utah with a low credit score? While credit score is lenders core consideration whether to lend you or not, having a low or bad credit score does not mean that, you will not own your first or second home. In this post, we share important insights guiding you on how to buy a house with bad credit.

1. Home Loan Programs for Borrowers with Low or Bad Credit Score

The federal government has multiple loan options, meant to help Americans afford homeownership. For the borrowers with a bad credit score, there are different home buying programs to consider. Here is an overview into each of the options:

  • The FHA loan for Bad Credit

When you have a low credit score, Federal Housing Administration offers you a chance to redeem your dream of homeownership. The FHA home loans come with a lower standard compared to the conventional home loans. This is because the Federal Government is committed to removing obstacles to homeownership. Therefore, with a credit score below 580, you qualify for a FHA home loan, so long as you can afford a down payment of above 10%.

  • VA Loans For Borrowers with Low Credit Score

If you are a former member of the military or you are an active member or a surviving spouse, you qualify for the VA home loan. Started by the Federal Department of Veteran Affairs, the VA home loan is meant to help qualifying members afford homeownership. Therefore, it is a fantastic starting for first time buyers. Apart from being a friendlier option for borrowers with low or bad credit score, the VA home loan offers a decent interest rate.

  • USDA Home Loan

The United States Department of Agriculture offers affordable home loans. The objective is to encourage homeownership within the qualifying rural areas. The USDA home loan is a zero down payment mortgage option, hence an affordable option for first time homebuyers.

Therefore, if your bad ort low credit score are keeping you from owning a home in Utah, consider the options we have just highlighted. Here are other tips  for borrowers with a poor or low credit score.

2. Check and Correct your Credit Score

Are you planning to buy a house in Utah? The initial step should be checking your current credit score. if you have a poor credit score, you will want to understand why. Check the credit report to determine what would have gone wrong. Apply to have any mistakes on credit report rectified, so that your credit score is good.

3. Choose to Pay a High Interest Rate

You still qualify for home mortgage with a lower credit score, but this could mean paying a higher interests rate. The mortgage lenders raise the interest rate with an intention of recovering their money soon. Thus, if you are willing to pay a high interest rate, the better chances of qualifying for a mortgage with the low credit score.

4. Higher Down Payment

Mortgage lenders will take chances if a borrower with a poor credit score is willing to pay a high down payment. The simple logic is that a large down payment shows the lender that you are willing to take on more risk on your home loan. In addition, the mortgage lender believes that you are less likely to run without paying the remainder. Lastly, it is a show of commitment that you are ready to buy a house in Utah. therefore, if you can come up with a 20% or more on your home purchase, you increase the odds of earning a mortgage approval.

5. Focus on Rebuilding your Credit Score

If your credit score is as bad, you may not qualify for home loans. Therefore, the only option left is work on your credit score. The road to rebuilding your credit score can be a tough one, but with commitments, you can achieve the objective. Here are some options to consider when it comes to improving your credit score.

  • Focus on repaying outstanding debts
  • Setup repayments reminder to ensure you do not miss the deadlines
  • Pay more than once in a billing cycle
  • Contact your creditors and setup a repayments structure
  • Apply for new credit sparingly
  • Consider debt consolidation plan

The points we have highlighted will help you improve the credit score.

6. Buy in cash

Finally, if your credit score is poor and lenders have shown you the door, the only option is to buy the house in cash. While only a few are privileged to afford the cash-buying price, you can save for years and still achieve the dream of owning a house in Utah. Come-up with a savings plan and fast track it to achieve the objective faster.   

Buying a home with a poor credit score may not be a simple process. Talk to a knowledgeable mortgage broker for professional assistance.

Renting Vs. Buying A Home In St. George? Which Is Better For You?

The most crucial factor when debating renting vs. buying is determining affordability. If you cannot afford home buying now, home rental is the immediate alternative. Otherwise, you have to cope with living with your relatives until you are ready to rent or buy a home.

So, should you rent or buy a home? In this post, we put into perspective the two sides of the coin. There are particular considerations to bear in mind, helping you decide whether to buy or rent a home.

Therefore, if you are contemplating renting vs. buying, we hope the insights here will give you a perspective helping you make the critical decision.

1. Monthly Budget

As indicated, affordability is a critical factor when making decisions that involve financial expenditure. For homeownership or renting a home, the first step is deciding the amount you can afford to spend on housing monthly. In that regard, calculate how much you are bringing in as monthly income. Next, deduct the total monthly expenses, including basic requirements like food, water, and transportation.  Do not forget to factor the actual monthly savings too. The remainder is the amount you can spend on housing. Whether renting or buying a home, stick to about 28% to 30% of your gross income. Avoid biting more than you chew because it can put you into financial trouble.

2. Consider the Financial Impact and Predictability

Finance experts recommend running a simple price-to-rent ratio analysis when making decisions such as renting vs. buying. Divide the home price by the annual rent of the comparable unit. In case the ratio is below 20 percent, owning a home is the better bet.

With the home rentals option, you know the monthly rent amounts. However, the property management company may increase the rent when you least expect. Owning a home comes with many upfront bills, which may or may not recur the following month. For instance, a Homeowner may d to replace a broken door in one month, and in the next month, its replacement or repair of a leaky roof. Therefore, when a home is owned, it becomes hard to predict the monthly expenditure.

3. Stability and Flexibility

Owning a home comes with a sense of stability. The homeowner knows that he belongs to a particular community and enjoys the pride of homeownership. Therefore, before buying or building a home, you will want to consider the duration you plan to live within a specific neighborhood. Ideally, the longer you plan to live within the given area, the more financial sense it makes buying a home.

For persons who prefer living in certain areas for a shorter duration, renting makes the financial sense. Thus, it is practical renting a home if you have multiple workstations. This is considering that you will not be able to sell the property within a limited duration and buy another home.

4. Tax Benefits

Home buying offers the investor tax benefits that renter may not enjoy. The homeowners may exclude capital gain they realize from the sale of a home, but up to a limit. The homeowners who itemize tax deductions may reduce the taxable income by deducting the interest paid on the home mortgage. However, the taxpayers who still rent a home may not have a comparable ability to deduct interest paid on household goods. Or the rent paid to property owners.

5. Equity

Home buying comes with the benefit of building equity. Ideally, the property owner can capitalize on home equity over time. For instance, if the property value goes up, the property owner can cash in on the higher value upon home selling. Alternatively, homeowners may borrow a reverse mortgage to fund their retirement. However, the renters are helping the property owners to clear a mortgage and build equity.

Therefore, when comparing renting vs. buying, the goal is to identify the benefits of either of the options. Here is a quick summary indicating the advantages and disadvantages of buying vs. renting.

Buying

Advantages

  • Equity building
  • Allows more stability
  • Accruing tax benefits
  • Homeowners can customize the property to their taste

Disadvantages

  • Risk of losing money in case property value depreciates
  • Requires substantial paperwork which should be done upfront
  • Extra expenses beyond the mortgage payments
  • Rising home prices and a low inventory in many markets
  • Responsible for repairs and remodeling
  • Home Renting

Advantages

  • Comes with fewer upfront costs and paperwork
  • Enjoy more flexibility
  • No responsibility for repairs and maintenance
  • The renter does not need to worry about falling home values

Disadvantages

  • Unpredictable expenses since the landlord may raise the rent or sell property, forcing you to move
  • Limited choices in terms of property customization
  • Renters do not build equity
  • No tax benefits

When evaluating whether to rent or buy a home, take into consideration the points we have highlighted. This gives you a better chance to make the right benefit.

Mortgage Lenders

How to get the Most out of Rent Cycles to Save MoneyaHow To Get The Most Out Of Rent Cycles To Save Money

Homeownership certainly comes with its fair share of advantages. However, before you own your first home, the chances are that home rental is the immediate alternative. But how can you transition from renting a home to owning a home?

Planning your rent cycles should be a priority to ensure you are saving enough money to help you achieve the homeownership dream. For many tenants, how to formulate rent cycles to achieve maximum benefits seems challenging.

In this post, I feature crucial tips to help you formulate rent cycles. The information will help you in transitioning from home rentals to homeownership. Keep reading to discover the essential tips

1. Research the Rental Rates

Consider that the global pandemic has disrupted many businesses. As a result, many first time home buyers cannot afford to raise down payment. The only alternative is home rentals, and this has seen the demand for rentals going up. In that regard, you must research the rental rates in your area to know how much you part with monthly.

Determine the state or the city you wish to live and research the average rental amount. Remember to check the rental price for different types of homes. The importance of examining the rental rates is to make sure you are renting within the accessible areas.

2. Know-How Much You Can Afford

The ultimate goal is to transition from home rentals to homeownership. In that regard, you want to make sure that you have some savings to pay down payment and closing costs. Thus, if you spend more on rent that you can afford, you will not meet the objective.

To determine how much you can afford rent cycle payments, select the current total income and the total monthly expenses. Find the difference to see how much you can afford to spend on rent cycles. Be sure to save a percentage to fund your objective of buying your first home.

3. Find An Alternative Source of Income That Can Pay the Rent

We advise home renters not to depend on their primary source of income to pay rent. If you can get a side hustle, use the amount earned from the side job to pay rent. side hustling helps you raise a significant supplemental income that you can use to pay monthly rent. Ultimately, you will be able to afford a new home. Where the side gig’s earnings cannot pay the entire rent amount, you can save the income.

4. Be Sure Your Budget can Support Additional Expenses.

When getting ready to rent a home, know what you are on the hook for. Check if the potential landlord expects you to pay all utilities, which include electricity, gas and water, phone service, TV service, parking, and so much more.

Do not be afraid to ask the average cost of utilities? This helps you to plan your rentals budget. Bear in mind that the average expenditure on utility bills depends on individual consumption. You can save on utility bills by controlling how you turn up the air conditioner, ensuring taps are switched off, and several other approaches. Saving on utility bills goes a long way in helping you afford the down payment and property closing costs.

5. Pay Rent on Time

Falling behind on rent puts you at the risk of being denied credit in the future. Therefore, you should pay rent at or before the due date. A bad credit report affects your acceptability as a tenant in future. Note that property management companies and property owners will check your credit score to determine your suitability. Therefore, be sure to pay rent on time. 

6. Consider other Alternatives to Renting

Other than paying rent, you can ask to live with your relatives as you plan your home ownership journey. Talk to a close relative, and agree whether they can host you for a while as you save money to pay down payment. Alternatively, you can share home rental cost with a college mate. Do not use the money saved on parties and other none essentials. Be sure to save so that you can afford the down payment and the closing costs.

7. Know How Much a New Home Can Cost

We have looked at different alternatives for renters to raise down payment money and the closing costs. It is necessary you research the housing market so that you know how much to save, to afford the down payment and the closing costs. With the cost of homeownership in your mind, the closer you are getting to achieving the objective.

Conclusion

Buying a new home comes with so much excitement. However, we all begin at some point. Are you living in home rentals but aspiring to transition to homeownership? Follow the tips shared above to help you achieve the objective.