Current lending options/rates for Utah real estate
One of the most common questions that I receive as a real estate agent is about current interest rates. Everyone keeps hearing about how low rates are with historic lows continually being broken; and everyone wants to know when the rates will start going back up. Although I don't have an answer or prediction for when rates will start increasing, I have included todays most updated rates for the most commonly used mortgage lending options in Utah.
This information has been provided by Mike and Kim Osborn with Prime Lending. They are two of the most honest and hard working lenders that I have worked with and would recommend them to anyone. They work quickly, find solutions to setbacks and difficult situations, are straightforward and honest, and their broker Prime Lending is top notch with very quick underwriting and processing times. In addition, Prime Lending credits borrowers a free appraisal for using a RE/MAX agent. They will also help you explore your refinancing options with your current property and will help you refinance at an amazing rate with low fees.
You can contact Mike and Kim with the information found below:
Mike and Kim Osborn
1. FHA, 30 year, 3.5% down, owner occupied - most commonly used loan for those with small down payment: 4.125%
2. FHA, 15 year, 3.5% diwn, owner occupied - those who want to and can afford to pay off mortgage sooner but only have small down payment: 3.5%
3. FHA, 5/1 ARM, 30 year, owner occupied - rate adjusts after 5 years, therefore best for those who plan to sell within 5 years - 3.0%
4. USDA Rural Development, 30 year, owner occupied - a form of FHA loan but there is no down payment and no fees for mortgage insurance, only homes in rural areas qualify (for example, homes south of HWY 6 in Spanish Fork, or in Eagle Mountain and Saratoga Springs) - 4.375% (and remember nothing down and no mortgage insurance!!)
5. Utah Housing, 30 year, owner occupied - down payment paid for by Utah Housing, good option for buyers without down payment but property does not qualify for USDA loan and buyers not veterans - 4.25% for majority of loan, 6.25% for amount of small down payment.
6. VA, 30 year, owner occupied - a loan reserved for veterans, zero down and no mortgage insurance premiums: 4.25%
7. Conventional 30 year Fixed (any down payment 5% or greater), owner occupied - For those who have larger down payment who want to avoid mortgage insurance premiums: 4.125%
8. Conventional 15 year (any down payment 5% or greater), owner occupied - For those who have larger down payment who want to avoid mortgage insurance premiums and can afford to pay off mortgage quicker: 3.75%
9. Conventional 5/1 Arm (any down payment 5% or greater), owner occupied - For those who have larger down payment but plan to sell or pay off mortgage within 5 years before rate adjusts: 3.0%
For investors (non-owner occupied):
10. Conv Non Owner Occ/Investment 20% Down: 5.0%
11. Conv Non Owner Occ/Investment 25% Down: 4.875%
12. Conv Non Owner Occ/Investment 25% Down 5/1 ARM: 3.625%
Here are some calculations for you to illustrate you how amazing these current interest rates really are:
On a $150,000 mortgage, the difference between 2 percentage points, or between 4.125% and 6.125% (which was the rate before the recession and a very likely rate for the near future), is $175/month in payments and about $60,000 in interest over the life of the loan.
If the amount of the loan is increased to $300,000, the difference increase to about $360/month and $125,000 in interest over the life of the loan (it is hard to believe many of our parents paid 10-18% on their mortgages).
In other words, this is an amazing time to buy, especially if you are looking to upgrade. Even if you lose $10k-$25k on your current property that you purchased in the past 5 years, it is likely that the home that you upgrade to has lost $50k-$200k during the same time span, and in addition, you will get a 4.125% rate to go with it. If you can't afford to sell your current home due to being upside down on your mortgage, but you still want to take advantage of the current market and upgrade to a bigger, nicer home, I would highly suggest buying your upgrade and renting out your current home. The rental market can be very strong in Utah County due to the amount of short sales and foreclosures destroying the credit of many former home owners and the demographics of Utah County with lots of young families and college students (the demand for renting is cyclic though).
For more information on Utah real estate and financing options, don't hesitate to contact Jared Fields or the Osborns. Be sure to search for your future home on MyProvoHome.com!!
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