Welcome to the TheFieldsTeam.com Blog

2011-06-15 11:27:13
Different Loan Options explained with best deals!

 

Good Morning Everyone,

I hope you are all having an enjoyable and productive week!

With interest rates so amazingly low right now, in addition to the low home prices, I thought I would put together this email showing the current interest rate for the most commonly used loans, what monthly mortgage payments would be for these loans, and the available homes that can be afforded for that monthly mortgage payment.

As I have explained to many of you before and in past blog articles, determining when the market hits “rock bottom” for those who plan to fund their purchase primarily with a loan, is both a combination of home prices combined with interest rates on loan options that are available for that home. In other words, for most it is probably better to pay $200,000 for a home and get a 4.5% interest rates, than pay $190,000 for a home but get a 5.5% interest rate.

For most of us, it is difficult to compare a home in Payson that qualifies for the USDA Rural Development loan, versus a home in Spanish Fork that does not qualify for the Rural Development loan and must go FHA for financing; or comparing a 5% down conventional to a 3.5% down FHA.

Although financing is not my profession and should be discussed in detail with your loan officer, I asked Mike Christensen with Lexington Mortgage to send me current rates and mortgage payments on the most common loans available today.

 I will use this information to help show you what type of home can be afforded for a certain monthly payment. These monthly payment estimates WILL include principle, interest, taxes and insurance, and will NOT include HOA fees if applicable. All of these loan estimates assume a credit score of 740. Credit scores between 640 and 740 will be slightly higher, and scores below 640 will likely be significantly higher. Be sure to check your credit score with your loan officer when getting pre-approved for a loan.

1)     USDA Rural Development loan – This is the best loan out there for those looking for a low down payment loan. The down payment for this loan is actually $0 (zero). Yes, $0 is not a typo. In addition, the borrower does NOT have to pay mortgage insurance on this loan (which on a typical FHA loan a barrower is paying .096% of their loan every month, which is about $192/month on a $200,000 FHA loan). This is a type of FHA loan but specifically tailored for rural areas.

 

There are some strict requirements for this loan:

-      Location: must be in a rural area, which has been defined as west of the Jordan River (Saratoga Springs and Eagle Mountain) or south of the Spanish Fork Rover (Salem, Payson, Santaquin, etc).

-      Income Limitations: must make less than $65,000 to $75,000 depending on the amount of dependents one has (check with lender).

-      Check with your lender about other requirements such not having another FHA loan, etc.

Currently, the interest rate for a 30 year USDA Rural Development loan is 4.25% with between 1.5-2% in buyer closing costs. That is an amazing combination!

For a $150,000 USDA Rural Development 30 year loan at 4.25% interest WITH $0 DOWN, the monthly payment will be between $850 and $870, depending on property taxes. For this amount, the following active properties could be purchased:

a)    MLS# 1022079 (Saratoga Springs) – Brand new 2160 sq.ft townhouse with 3 bed, 2.5 bath, balcony, fence private backyard, unfinished basement and 1 car garage. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1022079&altqs=&mlsButton=go

 

b)   MLS# 1037865 (Eagle Mountain) - 2-story 2534 sq.ft. home built in 2007 with 4 bed, 2.5 bath, 2 car garage, .12 acres, large master bath, unfinished basement and special incentives for buyers. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1037865&altqs=&mlsButton=go

 

c)    MLS# 1035764 (Payson) – 2368 sq.ft Rambler built in 1999 with 3 bed, 2 bath, 2 car garage, .24 acres, unfinished basement and special incentives for buyers. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1035764&altqs=&mlsButton=go

d)    MLS# 1035419 (Santaquin) – 2628 sq.ft Tri-Level built in 2005 with 3 bed, 2 bath, 2 car garage, .18 acres, unfinished basement and special incentives for buyers. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1035419&altqs=&mlsButton=go

For a $200,000 USDA Rural Development 30 year loan at 4.25% interest WITH $0 DOWN, the monthly payment will be between $1140 and $1180, depending on property taxes. For this amount, the following active properties could be purchased:

a)    MLS# 1036982 (Payson) – 2694 sq.ft. Rambler built in 2001 with 5 bed, 3 bath, 2 car garage and .24 acres. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1036982&altqs=&mlsButton=go

 

b)   MLS# 1032500 (Saratoga Springs) – Brand new 3000 sq.ft. Rambler with 3 bed, 2 bath, 2 car garage, unfinished basement, .23 acres, granite, stainless steel appliances, fireplace, and lots of upgrades. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1032500&altqs=&mlsButton=go

 

c)    MLS# 1037482 (Eagle Mountain) – Brand new 3806 sq.ft. 2 story home with 4 bed, 3 bath, unfinished basement, 2 car garage, .19 acres, granite, master bath with separate tub/shower and double vanity and huge family room. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1037482&altqs=&mlsButton=go

For a $250,000 USDA Rural Development 30 year loan at 4.25% interest WITH $0 DOWN, the monthly payment will be between $1420 and $1460, depending on property taxes. For this amount, the following active properties could be purchased:

a)    MLS# 1036669 (Saratoga Springs) – 3679 sq.ft. Rambler built in 2003 with 3 bed, 2.5 bath, 3 car garage, .27 acres, unfinished basement, lake views, granite and vaulted ceilings. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1036669&altqs=&mlsButton=go

 

b)   MLS# 1036505 (Saratoga Springs) – Brand new 3232 sq.ft. Rambler with 3 bed, 2 bath, 3 car garage, .19 acres, granite, marble, tile and large deck with lake views. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1036505&altqs=&mlsButton=go

 

c)    MLS# 1037184 (Payson) – 3368 sq.ft. Rambler built on 2004 with 5 bed, 3 bath, 2 car garage, .2 acres, hardwood, granite, new paint and huge master suite. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1037184&altqs=&mlsButton=go

 

d)    MLS# 1031958 (Salem) – Brand new 3840 sq.ft. Rambler with 3 bed, 2 bath, 3 car garage, .18 acres and many builder upgrades. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1031958&altqs=&mlsButton=go

For a $300,000 USDA Rural Development 30 year loan at 4.25% interest WITH $0 DOWN, the monthly payment will be between $1700 and $1750, depending on property taxes. For this amount, the following active properties could be purchased:

a)    MLS# 1024217 (Santaquin) – 4243 sq.ft. custom Rambler built in 2008, with 4 bed, 3 bath, unfinished basement, 3 car garage, .27 acres, granite, stone arches, covered deck and lots of upgrades. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1024217&altqs=&mlsButton=go

 

b)   MLS# 1031980 (Santaquin) – 3814 sq.ft Rambler built in 2006 with 5 bed, 3.5 bath, 3 car garage, .24 acres, fireplace, granite, large bay windows and lots of upgrades. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1031980&altqs=&mlsButton=go

 

c)    MLS# 1036504 (Saratoga Springs) – 3962 sq.ft. brand new Rambler with 4 bed, 2.5 bath, 3 car garage, unfinished basement, .21 acres, granite, stainless steel and lake views. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1036504&altqs=&mlsButton=go

As you can see, there are some AMAZING deals to be had in this category of loans!!

 

2)   FHA loan – This is the most commonly used loan for first-time home buyers or those with a low down payment. FHA loans require only 3.5% down. But there is monthly mortgage insurance on these loans of 1.15% of your loan paid annually, which totals about .096% monthly. These loans also require that the same borrower does not have another FHA loan. Check with your lender for more details about rates and requirements.

Currently, the interest rate for a 30 year FHA loan is 4.25% with between 1.5-2% in buyer closing costs. Again, this is an amazing combination!

For a $150,000 FHA 30 year loan at 4.25% interest, it will require a $5,250 down payment, and the monthly payment will be between $980 and $1000 depending on property taxes. For this amount, the following active properties could be purchased:

a)    MLS# 1034084 (Provo) – 1425 sq.ft Canyon Meadow Townhouse built on 2004 with 3 bed, 2 bath, 2 car garage and clubhouse with pool and exercise room. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1034084&altqs=&mlsButton=go

 

b)   MLS# 1035359 (Spanish Fork) – 1641 sq.ft. Rambler built in 2002 with 3 bed, 2.5 bath, 2 car garage, .12 acres and new carpet, paint and appliances with buyer incentives. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1035359&altqs=&mlsButton=go

 

c)    MLS# 1036026 (Lehi) – 1584 sq.ft. Tri-Level built on 1998 with 4 bed, 3 bath, 2 car garage, .24 acres, and 50% finished basement. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1036026&altqs=&mlsButton=go

For a $200,000 FHA 30 year loan at 4.25% interest, it will require a $7,000 down payment, and the monthly payment will be between $1300 and $1340 depending on property taxes. For this amount, the following active properties could be purchased:

a)    MLS# 1033384 (Lehi) – 2712 sq.ft. Rambler built in 2004 with 5 bed, 3 bath, 2 car garage, .12 acres, corian, large trex deck, craft room and new paint/carpet.

b)   MLS# 1037091 (Springville) – 2800 sq.ft. 2-story built on 1997 with 5 bed, 3 bath, 2 car garage, .18 acres and convenient location.

c)    MLS# 1037821 (Spanish Fork) – 3684 sq.ft. Rambler built in 2007 with 3 bed, 2 bath, 2 car garage, .25 acres, unfinished basement, fireplace, huge kitchen and buyer incentives.

 

For a $250,000 FHA 30 year loan at 4.25% interest, it will require a $8,750 down payment, and the monthly payment will be between $1630 and $1670 depending on property taxes. For this amount, the following active properties could be purchased:

a)    MLS# 1032276 (Provo) – 3820 sq.ft. 2-story built on 2006 with 4 bed, 2.5 bath, 2 car garage, unfinished basement, .2 acres, granite, two tone paint and huge master bath. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1033384&altqs=&mlsButton=go

 

b)   MLS# 1030277 (Lehi) – 3240 sq.ft. Rambler built on 2003 with 6 bed, 3 bath, 2 car garage, .17 acres, with second kitchen off family room, storage shed with power and solar panels. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1030277&altqs=&mlsButton=go

 

c)     MLS# 1034616 (Lehi) – 3373 sq.ft brand new luxury twinhouse at Thanksgiving Point with all the extras, 3 bed, 2 bath, 2 car garage and unfinished basement.  http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1034616&altqs=&mlsButton=go

 

d)    MLS 1034976 (Pleasant Grove) – 4031 sq.ft. 2-story built on 2002 with 4 bed, 2.5 bath, 3 car garage, unfinished basement, .2 acres and special incentives for buyers. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1034976&altqs=&mlsButton=go

 

For a $300,000 FHA 30 year loan at 4.25% interest, it will require a $8,750 down payment, and the monthly payment will be between $1960 and $2020 depending on property taxes. For this amount, the following active properties could be purchased:

a)    MLS# 1036225 (Lehi) – 3300 sq.ft Rambler built in 2004 with 5 bed, 3.5 bath, 2 car garage, .33 acres, corian, stainless steel, three-tone paint and great neighborhood. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1036225&altqs=&mlsButton=go

 

b)   MLS# 1028192 (Provo) – 3338 sq.ft. 2-story built in 2003 with 5 bed, 3.5 bath, 2 car garage, .22 acres, fireplaces, stainless steel, island, large master suite and very open. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1028192&altqs=&mlsButton=go

 

c)    MLS# 1033893 (Mapleton) – 4175 sq.ft. Rambler built in 2009 with 5 bed, 3 bath, 2 car garage, .15 acres, granite, hardwood, luxury kitchen and master bath. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1033893&altqs=&mlsButton=go

 

d)    MLS# 1035400 (Spanish Fork) – 4022 sq.ft. 2-story built on 2005 with 6 bed, 3.5 bath, 2 car garage, .32 acres, granite, huge bay windows, bonus rooms, upgraded A/C and furnace and lots of other upgrades. http://myprovohome.com/fine/real/estate?pge=home_view&qsearch=true&mlsno=1035400&altqs=&mlsButton=go

 

3)   Conventional Loan (5% down) – This loan is most commonly used by those who already have an FHA loan on another property and/or those with a slightly larger down payment. A 5% down conventional loan has lower mortgage insurance than the 3.5% down FHA loan. A 10% down conventional loan has an even lower mortgage insurance; and a 20% down conventional loan has 0 (zero) mortgage insurance. Deciding on how much to put down on a conventional loan should be analyzed and decided with your loan officer. But the 5% down conventional loan is very commonly in competition with the 3.5% down FHA loan and will be the sole conventional loan discussed in more detail in this analysis. Conventional loans have less requirements and guidelines than FHA loans but should still be discussed with your financing professional.

Currently, the interest rate for a 30 year 5% down Conventional loan is 4.5% with between 2-2.5% in buyer closing costs and lower mortgage insurance than FHA loans. This type of loan is going to be a great option for a large percentage of buyers.

Conventional loans can be used for any of the both mentioned properties, so active listings will not be included in this section. The amounts quoted in this section should be compared to the amounts above if the buyer/property does not qualify for the USDA loan and the buyer must choose between a 3.5% down FHA loan and a 5% down Conventional loan, and if the buyer has 5% to put down.

 

For a $150,000 Conventional 30 year loan at 4.5% interest, it will require a $7,500 down payment, and the monthly payment will be between $870 and $900 depending on property taxes.

 

For a $200,000 Conventional 30 year loan at 4.5% interest, it will require a $10,000 down payment, and the monthly payment will be between $1160 and $1200 depending on property taxes.

 

For a $250,000 Conventional 30 year loan at 4.5% interest, it will require a $12,500 down payment, and the monthly payment will be between $1450 and $1500 depending on property taxes.

 

For a $300,000 Conventional 30 year loan at 4.5% interest, it will require a $15,000 down payment, and the monthly payment will be between $1740 and $1800 depending on property taxes.

 

 

Many homes and buyers will qualify for different types of loans. It is very important for buyers to discuss their financial situation and interest with their real estate agent AND their loan officer, so that these real estate professionals can direct buyers into the type of home and loan that will serve the buyers best interests. ‘

 

Myself, Jared Fields, JD with RE/MAX Results, and Mike Christensen with Lexington Mortgage, strive to make sure their buyers find the best home with the best loan for their unique situations. With the current combination of low home prices and extremely low interest rates, there very well may not be a better time to buy a home than right now, especially for first-time home buyers and those upgrading.

 

For any of your real estate related needs and questions, please contact Jared Fields at (801) 360-1003 or Jared@MyProvoHome.com!

 

 

 
Blog Archive
2017-05-16 23:10:54
'Wonder Woman' Confirmed Seat Reservations List

2017-03-07 18:03:50
6th Annual Easter 'Egg'stravaganza April 15th!!

2017-03-07 11:05:49
6th Annual ESPN Bracket Challenge $2500 in prizes!

2017-03-03 18:11:34
Easter Event (2017) Registration Confirmation

2017-02-03 14:44:08
Open House, Seminar, Easter Event and more!

2017-01-24 23:14:33
FREE Real Estate Seminar & Workshop!

2017-01-19 11:46:00
2017 1st Quarter Current Market Analysis and Trend

2017-01-04 13:26:33
THANK YOU from our Sub for Santa Families

2016-12-20 12:10:25
Star Wars Rogue One Event Photos!

2016-12-16 13:11:11
Sub for Santa Delivery Schedule!

2016-11-29 13:27:24
Star Wars: Rogue One Client Appreciation Event!

2016-11-29 12:08:17
Star Wars: Rogue One - Confirmed Seat Reservations

2016-11-28 14:50:34
Appreciation Event: PHOTOS WITH SANTA!

2016-11-23 13:33:41
Our SUB-4-SANTA families and fundraiser for 2016!

2016-08-30 13:35:40
Upcoming Events, Market Update, new Team Member

2016-07-05 10:42:31
2nd Quarter 2016 Market Analysis and Results

2016-06-14 14:47:50
Seat Reservation List - Finding Dory- Updated 6/14

2016-05-02 11:14:10
2016 1st Quarter Market Analysis

2016-04-18 19:44:43
Seat Reservation List - 'Finding Dory'

2016-04-18 19:44:31
Seat Reservation List - 'Captain America'

2016-04-05 10:58:25
Winners of our 5th annual Bracket Challenge!!

2016-03-21 11:42:21
Tournamnet Challenge Bracket Update 3/21

2016-03-14 15:21:58
Easter Event Fundraiser for the Dunn Family

2016-03-14 10:05:52
5th Annual Easter 'Egg'stravaganza Event!

2016-03-14 09:55:56
Pizza and Egg Stuffing Paty

Click here to see ALL articles.


Comment on this Article

Your Name:
Your Email:
Comments:
Verify:  Please enter the numbers shown to help eliminate spam.