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The Ultimate Guide for Renting in St. George, Utah

Renting a home is often the easiest and cheaper option. Remember that renting comes with more flexibility compared to homeownership. Moreover, renters require less financial commitment to get started.

While many Americans are looking to homeownership at some point, there are times when the only alternative is renting a home. For example, when you live and work in a place where you are not able to afford to buy, renting a home remains the next option.

Whether getting into rent cycles for financial reasons or lifestyle reasons, it is advisable that you familiarize yourself with the tips for renting a home. Let us get started.

1. Know the Kind of Home You Are Searching

If you have settled on renting a home, the best place to start is to determine the kind of home you are looking to rent. Are you looking to rent a Condo or a family house with own compound? It is up to the tenant to come up with a list of features to look out for when searching for the best home rentals.

This list will be used as the reference point when searching for the best home rentals. The list of features makes the process of searching for a home rental easier and convenient.

2. Research the Area

Think about the most convenient place to rent a home in St. George Utah. Are you looking for a rental home located near your place of work? Do you wish to live in the cities or you prefer suburbs. While choosing the best area to live, remember that the location will most likely affect the rental price. For instance, living within the city is bound to be more expensive than living in suburban areas.

In that regard, it is important that the tenants research an area before committing their money as a security deposit. Avoid renting a home without doing some research to discover how habitable the area is.

3. Talk to a Responsible Property Management Agency

Property management agents help tenants discover the best rental properties they have been searching for. Thus, as you research the best area to rent a home, keep looking out for the best real estate agents within the area. When you have found a reliable property management agent in St. George Utah, issue the agent with the list of requirements. Remember that the objective of having the list of requirements is to make it easier to find the best home rentals.

The advantage of hiring a property management agent is that it simplifies the process of finding the best home rentals in your area. Moreover, working with an agent saves time and your money.

4. Read Through the Contractual Terms Carefully

When it comes to renting a home, property owners will prepare a list of terms and conditions that every tenant must meet. It is important that you read and familiarize yourself with these important terms. Remember that not abiding by the tenancy requirements could result in loss of tenancy, which means you have to start the search for a rental again.

In that regard, on your first meeting with the property owner or property management agent, ask for the tenancy agreement. Make sure you read the document thoroughly. If you intend to move in with another person, he or she needs to read the rules too. This helps to avoid surprises later while trying to settle down.

5. Inspect the Property

Similar to buying a home, while renting a home, you need to do a property inspection. This should be done before you have signed the lease document. When it comes to property inspection, you may talk to a qualified property inspector to help you with the process. Inspecting rental property involves checking whether the property is well built; inspect water pressure in the showers and the faucets, checking if all door locks are in good working condition.

Thus, once you have gone through the lease document and you are ready to sign, remember to ask for a property inspection before you have made any commitments. Property inspection is important regardless of whether you are renting a newly built property or an older property. Be sure to involve a property management agent or at least, experienced property inspection experts.

6. Pay Security Deposit on Time

When it comes to renting a property, you will be required to pay a security deposit. The security deposit is meant to take care of any damages while staying in that house. Paying the security deposit and rent in full secures the rental property. Thus, you are assured that the property will not be rented to another tenant.

7. Document All your Communication With the Landlord

Sending emails and chatting on digital platforms are some of the easiest ways to document communication with the property owner. The importance of documenting the conversation is that you have some reference in case of disputes in the future. Remember to document the property inspection report as well. You will need the property inspection report at the end of the tenancy.

Are you planning to rent a new home? This guide on how to rent a home will help ensure a smooth process. Remember to involve a qualified property management agent.

Warning! Are You Considering Buying a Home?

Renting vs. buying is a debate that is on the mind of many Americans. Well, there are pros and cons of renting or home buying. The bottom line is that we all need a place we can call home, and have a sense of belonging. Before making the big decision on whether to rent or buy a home, you need to research well.

Are you struggling to decide whether to go for home rentals or start your home buying process? In this post, we feature the two sides of either of these options. My objective is to help Americans make a decision when it comes to renting vs. buying.

1. Mortgage Repayment vs. Rent Cycles

To decide on whether to go for home rentals or settle for home buying, it is important we evaluate what each of these decisions will involve. If you choose home rentals, you need to be prepared to get into monthly rent cycles. On the other hand, home buying may require a well-laid plan to ensure timely mortgage repayments.

Reasons you may choose mortgage over rent

  • For a vast majority of Americans, it is not easy saving a lump sum to buy a home in cash. A home mortgage makes home buying affordable. By taking a home buying mortgage, the homebuyer spreads the repayments on the home loan over a certain period. The amount repaid every month could be higher compared to monthly rent, but the advantage is that you pay for a certain period only. This is unlike rent cycles where you will not stop paying for as long as you live in home rentals.
  • The mortgage repayment amount is a predetermined figure so long as you choose a fixed interest rate. Thus, the homebuyer is able to plan his or her finances. This is because it is clear that a certain amount needs to be repaid on a monthly basis for a predetermined number of years. However, for home rentals, the property owners choose the rates by which to increase the amount of rent. This makes it difficult for the renters to have a clear financial plan.

Why Rent could be Preferable over Mortgages

  • Not everyone qualifies for a mortgage! Owing to the disqualification, a huge percent of Americans prefer to remain renters.
  • The mortgage application process is lengthy and tedious, and so not a viable solution if you need a home urgently. This occurs especially when you are relocating to a new town to chase a business opportunity

As we have illustrated, renting vs. buying a home requires proper though to what you are getting into. Thus, if stuck on whether to take a mortgage or to keep paying rent, we hope this part will be a revelation.

2. Consider Flexibility

Do you prefer living in one neighborhood for years or you prefer a mobile lifestyle? This is more of a personal preference.

  • If you prefer an option where you can pack and leave overnight, you are better off choosing home rentals. With home rentals, you just need to issue a notice of intent to vacate to the property owner, and you are free to go. This is so long as you have met all the preset conditions, with reference to the lease agreement.
  • However, if you are looking for a place to call home especially after retirement, home buying remains the better option. Consider that selling your home could require months of waiting.

Ideally, renting a home is better for those in business and want to be able to move at any time. On the other side, home buying is ideal for families looking to have a place to call home at any time regardless of one’s career. The reality is that many Americans will prefer renting when traveling to cities and have a home where they can raise children.

3. Equity

Well, when it comes to measuring success in life, one’s net worthy counts. For renters, you cannot claim ownership of that property you are living in. However, for homeowners, they have full entitlement so long as they are to date with mortgage repayments. In that regard, most Americans will prefer home buying as it comes with an opportunity to grow one’s net worth.  Remember that paying monthly rent amounts to helping the property owner clear the mortgage, which is equivalent to building his or her net worth.

4. Do you Prefer Having Freedom to Customize Your Home

Home rental comes with restrictions on home improvement. For instance, you cannot repaint the home without express authorization from the property owners. This means that renters do not have the freedom to make any room additions or build a granny unit within the same compound.

However, home buying means you are the property owner and can do anything just to customize your home. Thus, if you prefer the ability to customize your home, choose home buying over home rentals.

Conclusion

Renting vs. Buying can be a tough decision to make. However, with the insights shared in this document, I hope you are able to make a decision. Do you feel that home buying is the better option? Talk to experts to help you understand the options you have when it comes to borrowing home buying mortgage.

6 Techniques to Buy a House with Bad Credit (#4 is our Favorite!)

For a vast majority of people, buying a house without taking applying for a mortgage is nearly impossible. Raising hundreds of thousands of dollars to finance a home is a privilege reserved for a few.

As it stands, to qualify for a home buying mortgage, you need a good credit score. This requirement has cut off many people from achieving their homeownership dreams. However, the good news is that having a bad credit score is not a condemnation that you will never own a home.

In this post, we share some insights to help Americans buy a house with bad credit. Thus, if you have forever longed to buy a house in Utah but felt the bad credit is keeping you from attaining the dream, we have some nice ideas to help you achieve the dream.

1. Get Your Credit Score Report

The first thing when it comes to buying a house is checking the credit score. You can download a credit score report online for free or ask your banker to help you get the credit score report. Alternatively, the credit card companies can help you get the current credit score. Thus, it is a good idea you check the current credit score so that you can know the way forward.

2. Check for Erroneous Entries

Now that you have the credit score report, scan through for errors on the report. Remember that the credit score represents the calculation of credit data in your credit report. Thus, the credit report has the historical data of how you handled credit repayments. A wrong entry on the credit report results in a bad credit score. In our analysis of the credit score report, you want to see if some bad entries could be ones affecting your credit score. Any errors should be disputed with the credit bureaus immediately.

3. Consider Paying Higher Interest Rates

You  can still qualify for a home buying mortgage with a lower credit score if you are willing to pay a higher interest rate. Mortgage lenders will charge high-interest rates to borrowers with a low credit score. The high-interest rate is to cushion the mortgage lenders in case of late repayments or missed mortgage repayments altogether.

Thus, if you choose to pay a high-interest rate, bear in mind that it means you have to pay a high mortgage repayment altogether. in that regard, you need a plan to cushion you during the period of mortgage repayments.

4. Apply For Government Insured Mortgage

A mortgage-backed by the government will have lenient credit score requirements compared to the conventional home mortgage. Thus, the government-backed mortgages help thousands of people looking to buying a house but have a poor credit score. The government-backed mortgages are also less risky for mortgage lenders.

Here are some good alternatives when it comes to government-backed mortgages for borrowers with poor credit.

  • The FHA home Mortgage

An FHA home mortgage is a loan that is backed by the Federal Housing Administration. The FHA home loan is available to first-time borrowers who have not purchased a home in the past three years. The FHA home loan requires a minimum credit score of 580. For borrowers who can raise up to 10% mortgage down payment, the credit score goes to as low as 500.

  • The VA Loan

Veterans or active-duty members of the armed forces qualify for the VA loan, which is backed by the Department of Veteran Affairs. There is no specific credit score to qualify for the VA loan, but the borrower has to meet all other requirements.

5. Raise a Higher Down Payment

Mortgage lenders may be willing to take a chance on a borrower who has offered to pay a high down payment. Ideally, the logic of paying a high down payment is similar to agreeing to pay a high-interest rate. The mortgage lenders believe that a borrower with a low credit score is less likely to default if they have invested a huge amount as the down payment.

6. Work on Credit Score Improvement

While you can still buy a house in Utah even if you have bad credit, clearing your name is still the best approach. Unfortunately, clearing your name does not happen quickly, and will require some financial discipline. To start improving your credit score, consider paying all the bills on time. In addition, be sure to pay down as much of your credit card debt as possible.

Conclusion

I hope that you now have a good understanding of how buying a house with bad credit works. While getting a mortgage is easier, a bad credit score will complicate the process. Talk to your mortgage lenders for the best options that will enable you to buy a house in Utah even though you have a bad credit score.

Essential Tips on Buying a House with a Low Down Payment in St. George Utah

Buying a house in St. George Utah involves a huge financial commitment. Thus, many people are left to borrow a mortgage in order to finance their homeownership dream. To qualify for a conventional home loan, you have to raise the 20% down payment, raise closing costs, and have a high credit score. For first-time buyers, paying the down payment and closing costs can be overwhelming. Thus, regardless of having a good credit score, many people are still locked out from homeownership.

Are you struggling to raise enough down payments to qualify for a home mortgage? Do you know that you can easily buy a house in St George with a low down payment or even no down payment? In this post, we share important tips to help homebuyers into homeownership even with low or no down payment.

  1. Explore Available Mortgage Options

There are several mortgage options available today. Each has its own set of pros and cons. For first time buyers looking to buying a house in St. George with a low down payment, talk to a mortgage broker to help you understand available options. Thus, you may want to consider the following options:

  • The Conventional Mortgages with Low down payment

First-time homebuyers with the required credit score can get a conventional mortgage with a low down payment. This is often as low as 3% depending on personal situation and lenders terms. In addition, the property you are purchasing will inform the mortgage lenders whether to consider the borrower for a conventional home loan with a low credit score.

However, bear in mind that paying less than 20% on the conventional home loan may require payment of the private mortgage insurance. Private mortgage insurance is what protects the mortgage lender in case you default on a mortgage. Note that private mortgage insurance is normally paid as part of the monthly mortgage repayments.

The other requirements to qualify for a conventional home loan with low down payment include a high credit score, a debt-to-income ratio of not more than 50%, and a loan amount that must fall within the set limits.

  • The FHA Home Loan

The Federal Housing Administration issues mortgages to borrowers who can raise a 3.5% down payment. Thus, the FHA home loan is considered a low down payment mortgage. To qualify for the FHA backed loan, you need a credit score of 580 or above. If your credit score falls between 500 and 579, you can still borrow this low down payment mortgage. However, you have to raise up to 10% down payment.

  • The VA Home Loan

Guaranteed by the Department of Veteran Affairs, The VA home loan requires no down payment. The VA home loan assists applicants to build, buy, or improve a home, or even to refinance the current home loan. The VA home loan is available to active servicemen or women and their surviving spouses. However, the applicants should meet the credit score requirements.

  • USDA Home Loan

This is a zero down payment home loan for rural and suburban buyers. Ideally, the mortgage option is suitable for the borrowers who are not wealthy and cannot qualify for the traditional mortgage. To qualify for the USDA home loan, you ought to have a dependable income and provide proof that you will keep to date with the mortgage repayments.

2. Consider the State or Local Homebuying Assistance Programs

In addition to the federally backed home buying programs, the state of Utah offers some assistance programs suitable for homebuyers who cannot raise a 20% down payment. The State-backed home buying programs are suitable for buyers with limited income but have a decent credit score.

Borrowers can apply through the statewide network of the participating lenders. Contact your mortgage lender to find out the available programs. However, be aware that the state-backed programs put restrictions on income, property purchase price, and the home location.

3. Compare the Mortgage Lenders Requirements

Shopping for mortgage lenders is always recommended. You will find that mortgage lenders will have varying requirements to be met by the mortgage borrowers. In that regard, check their requirements in terms of mortgage down payment. The idea is to choose a mortgage lender who is willing to lend at favorable terms that include a low down payment. However, bear in mind that the mortgage lenders might introduce a high mortgage interest rate in order to accommodate the low down payment requirements.

4. Stick To Your Budget

The down payment amount will also depend on the value of the property you are purchasing. The higher the property value, the higher the down payment that you will have to make. Therefore, you may consider revising the amount you intend to spend on buying a house in St. George, just to be sure you pay a lower down payment.

Key Takeaway

Now, you know the options to pursue in order to afford a house in St. George Utah with a low down payment. Talk to your mortgage lender for different options.

The Ultimate Guide to Renting A Home

Home rentals come with shorter-term commitment and minimal maintenance or repair costs to the person renting a home.

While homeownership is the ultimate goal for a majority of Americans, at some point you just have to cope with the rent cycles. Let no one lie to you that renting a home is a simple and straightforward process. You need to do proper research in order to make the right decisions.

In this post, we feature a comprehensive tutorial for renting a home. Therefore, if moving to a new city and worried about the process to follow in order to rent a home, here are important tips to help you.

1. Prepare your Paperwork

The best way to convince the landlord that you are the tenant he or she has been searching is to be prepared. Consider that there are others looking for a home to rent just like you are. In that regard, to get a competitive edge over the applicants,  bring the necessary documents when you are leaving to meet the landlord. Here is a list of documents that I advise you to come with when searching for a home:

  • A completed rental application
  • Written references from your past landlords
  • Come with proof of employment or proof of income
  • A current copy of your credit report

Property owners will require a formal application from the prospective tenants. This serves as an expression of interest. The written references from your past landlord, proof of income/employment, and the current copy of credit report are meant to prove that you have what it takes to clear the outstanding bills.

2. Review the Lease Documentation

Upon presenting the formal tenancy application letter accompanied by the other documents, your prospective landlord will go throw them and send a response. If he or she sees that you are a potential landlord, a lease document will be sent to you. Review the lease documents before you have signed. Make sure you have gone through it to see the terms of the agreement and in case there is anything that appears not acceptable, seek clarification from the landlord. Some landlords will have strict guidelines when it comes to hosting and entertaining your guests, pets policy, or even rent payments.

Before signing the rental agreement, make sure you have proper clarification from the property management company or the landlord.

3. Research the Neighborhood 

It is important that you research as much about the neighborhood to avoid a situation where you have moved into a  home rental, only to find that the closest school for your children is miles away. Thus, even before you are done with the lease agreement, take time to research the neighborhood. Luckily, today’s technology allows us to learn about a neighborhood by simply searching online. You will find information like crime rate, best schools with certain neighborhoods, restaurants, hospitals, places of worship, and entertainment places by simply using Google Maps. Create some time to drive around the neighborhood, doing what I may call “mapping the neighborhood”. The objective is to find which neighborhood best suits your kind of lifestyle.

4. Make sure You Have Everything in Writing

Disputes could occur months in your tenancy just because of some misunderstanding. To avoid such a situation, it is imperative that you get everything in paper. You need to keep a copy of the agreement for future reference. In addition, if making any requests to the landlord, be sure to have it done in writing. This can be a simple email to the property management company, or to the property owner.

5. Inspect the Property

Do not make the mistake of moving to a house without proper inspection done.  If another person leased the property, you need to do proper inspection taking note of any breakages. If there are breakages, the property management company should repair it before you have moved into the property. Otherwise, you need to take note of the breakage, so that at the end of your lease agreement, you do not end up paying for damage you do not own. The best thing to do is to demand repairs before you have moved into that property.

6. Protect your Security Deposit

To protect yourself and avoid any misunderstandings about a refund of the security, be sure to verify with the landlord the terms of security refund. Note that rent security is meant to cover any damages to the property or the installed appliances. In that regard, be sure to check for damages and requests for repairs so that you do not end up paying for repairing damages that existed even before you moved in.

Renting a home requires that the tenant pays keen attention to every detail. To increase the chances of finding a rental home, have your documentation ready. Make sure you have inspected the property and surveyed the neighborhood to ascertain that all necessary amenities are within reach.

Should You Rent or Buy a Home? Find Out Which is Better For You

Renting vs. buying a home is a debate that we often find ourselves engaging in. While whether to rent or buy a home depends on some prevailing conditions, it is important you evaluate the two sides before reaching a decision. The reality is that home rentals and home buying come with advantages and disadvantages. In this post, we are going to evaluate what it means to rent or to buy a home. Let us start with home rentals.

Home Rentals

Home renting has continued to gain popularity across the US. For a majority of people moving to urban centers in search of job opportunities or better healthcare, renting is usually the first thing in their mind.

Consider that in the case of a jobseeker, most of these persons are fresh graduates from the universities or colleges, and so they do not have enough savings to afford the cost of buying a new home. 

Home rentals come with various advantages.  In the following section, we evaluate the advantages of renting a home:

1. Greater Flexibility

Renting a property provides the renters greater flexibility. Consider that one can adjust the size of the house according to the current conditions, and this does not involve too much hassle. In addition, with home renting, you can relocate easily without having to worry about selling a property or financing the process of buying a new home.

2. Does not Involve Lump sum Investment

To rent a home, you just need the monthly rent and security deposit. The other costs are often negligible and could include the cost of transport, the cost of searching for a rental home, and other minor costs. The lower costs make renting the first option for a majority of people moving to the cities in search of a job. Consider most of them may not have enough savings to afford a new home.

3. Down payment Can be Invested elsewhere

In some instances, one has enough money to pay for the down payment. However, they still cannot qualify for home buying mortgage, simply because they lack a credit history. Under such a circumstance, you may opt to use the amount in some other projects, establish good credit so that you can purchase a property when you qualify for a mortgage and can afford the repayments.

4. The landlord is Liable for Property Maintenance Cost and Repairs

The cost of maintaining a property could be hectic for some people, hence prefer renting to buying a property.

There are shortcomings associated with home rentals. Consider that when renting a property, you do not own the property; you are just entitled to live in the house for the short lease period. Thus, you are paying someone else’s mortgage.

Home Buying

Buying a home could be by borrowing a mortgage, or paying cash from your savings. Regardless of the approach, if you have paid the full amount, you become the new property owner.

Here are the advantages of Homeownership

1. Builds Asset Base

Buying a property comes with entitlement rights! After you have paid the down payment and you have the ownership title in your name, you can count the property while counting your other assets. This is unlike when you choose to rent a home.

2. Comes with Sense of Belonging

For a family, nothing feels comfortable than a sense of belonging. When you have finally paid the full amount on a property and it is in your name, your family feels proud and increases the stability. However, living in a rental home comes with uncertainty as you do not know what the proprietor wants to do with the property at a later date.

3. Enjoy Tax Benefits

Mortgage borrowers enjoy interest deduction. This is often one of the biggest incentives given by the government to promote homeownership. Other benefits could include waivers to cover mortgage insurance premiums, or real estate taxes.

4. Emotional Benefits

Home buying also comes with emotional benefits. Consider that most people believe that buying a home has changed their emotional well being for the better. For a majority of first-time home buyers, they say they cannot wish to go back to home rentals.

Therefore, buying a home could be considered a better decision than renting a property. However, this depends on what you consider. We can say that buying a home comes with huge financial commitments at the start. This includes paying a down payment, the costs of processing a mortgage, and mortgage insurance. Other costs associated with homeownership include home insurance, the cost of property maintenance, residents association fee, and other costs. The renters are exempted from such costs. 

However, while renting a home could mean fewer costs, in the end, you cannot recover the amount you have paid as rent. This is the reason why homeownership is considered the American dream.  

7 Hacks to Buy a House with Bad Credit (#5 is a MUST-READ!)

Is it possible to buy a house in Utah with bad credit? Yes! You can buy a home in Utah, even if your credit score is bad.

If you are tired of writing monthly rent checks to your landlord but worried that bad credit could keep the rent cycles going, relax! You have come to the right page, and we have some advice.

In this post, we feature some important tips to help you buy a house even when you have bad credit. I can guarantee you that we will not tell you to save and buy a home in cash. Keep reading to discover the secrets to buying a house with bad credit.

First, it is important we seek an understanding of what mortgage lenders consider to be bad credit.

What is considered a Bad Credit?

Unfortunately, most people do not know that there is no specific minimum credit score required by any mortgage lender for a home buyer to begin the process of searching for a house to buy.

The main point is that conventional mortgage lenders are free to set their credit score requirements. In addition, the lenders of government-backed loans give the lenders some peace of mind when it comes to setting credit score requirements. However, for the government-backed loans, they have to ensure a lower credit score requirement as set by the guaranteeing agency.

If you have a credit score of below 500, chances are that you will struggle to find a mortgage, and so need to focus on the following tips to help you buy a house in Utah with bad credit.

1. Consider Home loan Options for Borrowers with Bad Credit Score

If you intend to buy a house but you cannot qualify for a conventional mortgage because of low credit, the government-backed mortgage could provide an alternative. The different government-backed options for borrowers with bad credit include:

  • FHA Mortgage

The Federal Housing Administration backs the FHA loan. The minimum credit score to get the FHA home mortgage is around 580. However, if you can afford a 10% down payment, you can get approved with a credit score of 500 to 579.

  • VA Loans

For veterans or active-duty members of the armed forces, you qualify for the VA loan, which is backed by the Department of Veteran Affairs. You will need about 620 to be eligible for the VA loan.

  • USDA Loan

The US Department of Agriculture backs the USDA loan, and most lenders require a credit score of 640 to give the loan.

2. Work on Credit Improvement

Improving your credit score will most likely require some time, but it is the most practical solution if you intend to buy a house in Utah but a bad credit score is preventing you. With a good credit score, you will have more mortgage options, while you have the power to bargain on the mortgage interest.

Here are tips to help you improve credit score:

  • Ensure bills are paid on time
  • Focus on keeping the credit card balances down
  • Check and dispute credit report error
  • Keep credit cards active

Mix up the tips we have listed to help improve credit score faster.

3. Consider Local and Federal Assistance Programs For First Time Buyers

Various assistance programs make the process of buying a home easier even if you have a poor credit score. Talk to a mortgage broker and real estate experts to find out such applicable programs within your area.

4. Be Willing to Pay Higher Interest Rates

If you are willing to pay higher interest rates, then you have chances of qualifying for a mortgage with a low credit score. However, this depends on the mortgage lender you are working with. Talk to your mortgage lenders to find out if they have this option.

5. Pay a Higher Down Payment

Lenders might be willing to extend credit to the borrowers with bad credit, so long as the borrower shows the ability to pay higher down payments. The logic here is that the lender is taking a higher risk and they believe you are less likely to default a mortgage if you have paid a high down payment.

6. Find a Flexible Mortgage Lender

With bad credit, your ability to buy a house in Utah depends on being able to find a mortgage lender that provides more flexible credit requirements. Talk to your mortgage broker for advice.

7. Save Diligently For Down Payment and Closing Costs

We have shown that a high down payment can help you to overcome the low credit barrier when it comes to buying a house in Utah. Start saving for the down payment early enough and make sure you have separate savings for the closing costs.

Buying a house with bad credit is still possible. You just need to research the available options well and consult an expert.

How to Buy a House with Low Down in St. George

Do you think it is impossible buying a home without a 20% down payment?  Maybe not, if you understand the lending industry well. Certain mortgages and home buying programs allow home buying with a low down payment or no down payment at all.  Therefore, with as low as 3% down or less, you can become a happy homeowner.

A no down payment mortgage allows first time home buyers and experienced home buyers to purchase a property with no money required at closing except the standard closing costs.  In this post, we feature important options allowing you to buy a home with a low down payment or zero percent down.

Let us start with the low down payment options:

1. The FHA Loans (Low Down Payment at 3.5% Down Payment)

The Federal Housing Administration (FHA), introduced FHA insured loans, available to qualified individuals through mortgage lenders. The FHA low down payment mortgage intends to help the low and moderate-income earners, who would otherwise be locked out of the housing market.

Thus, with a 3.5% down payment and at least a 580 credit score, you can borrow the low down payment mortgage by FHA. However, the drawback is that you need to pay an upfront mortgage insurance premium of 1.75% of the loan amount. In addition, a monthly mortgage insurance premium is included in the mortgage repayments. This could range from 0.45% to 1.05% of the loan amount per year.

Why choose the FHA home loan? Here are some of the reasons you may need to consider the FHA backed home loan with a low down payment.

  • Comes with a low down payment of just 3.5% down
  • Features flexible qualification guidelines
  • A debt-to-income ratio as high as 55%
  • Requires upfront and monthly mortgage insurance premium
  • Enjoy a no cost and no qualifying streamline refinance

Apply for The FHA Home loan today.

2.    The VA Loan –No Down Payment Mortgage

The U.S. Department of Veteran Affairs offers zero down payment home buying loans to the members of the U.S. military and the surviving spouses.

The VA guarantees these loans and avails them through various lenders. Thus, if you are an active or a retired military officer, or a surviving spouse, with the VA zero down payment mortgage, you can buy a home.

The VA home loans do not have a minimum credit score, but the VA mortgage lenders may require that you raise at least a 580 credit score. As illustrated, the zero down payment home loan comes with flexible credit terms, with phenomenal interest rates compared to other home loans. Unlike the FHA home loan, borrowers do not have to pay a monthly mortgage insurance premium. The VA loan also comes with two refinancing options.

Here is a summary of some of what you need to know regarding the VA home loan:

  • It is a zero down payment home mortgage
  • Borrowers pay the VA upfront funding fees but there is no monthly mortgage insurance
  • It is available to the eligible veterans only
  • Enjoy “no-cost” and “no qualifying” streamline refinance
  • Available for 30-years fixed rate

If you intend to apply for this zero down payment mortgage, note that the VA home loan is subjected to the VA eligibility rules

3.    The USDA Home Loan- No Down payment home buying mortgage

Available through the U.S Department of Agriculture, the USDA home loan offers up to 100% financing to eligible homebuyers. The USDA home loan program is formally known as the Section 502 mortgage although most lenders call it the Rural Housing Loan.

The USDA rural housing loan is available to the homebuyers eyeing the suburban neighborhoods and aims at reaching the low-to-moderate income homebuyers. With the USDA rural housing program, the borrower may include eligible home repairs and home improvements in the loan amount. In addition, there is a maximum home purchase price while the guarantee fee is added to the loan balance at closing. The USDA home loan carries a lower interest rate compared to a conventional home loan.

Here are some of the advantages of the USDA no down payment home mortgage

  • Comes with a low monthly mortgage insurance
  • Available for 30 years at a fixed rate
  • Allows buying of properties within eligible rural areas
  • Comes with flexible qualification guidelines
  • Enjoy financing of up to 103.5% of the appraisal value

The USDA home loan requires an up-front guarantee premium while the monthly mortgage insurance premium is low. Note that the maximum income limits will vary by country.

Key Takeaway

With millions of Americans facing financial burdens that include student loans and high unemployment rates after the Coronavirus pandemic, raising a 20% down payment can be daunting. The good news is that buying a house in St. George is still possible. This is through taking advantage of the no down payment or the low down payment home mortgage.