Not unless you’re able to buy a house in cash, then choosing the right home for you is only half of your problems as you still have to select the mortgage that would best fit you. Since completely paying for your mortgage may take a long period, you need to find a loan that perfectly meets your budget. Acquiring loan from a lender means that you will have a legal agreement that will require you to pay for it with interest on an agreed time.
Finding the best mortgage rate in Salt Lake City can be tricky. At the moment, current rates in the city are at 3.625% for a 30-year loan, 3.000% for a 15-year loan, and 3.375% for a five year ARM. However, despite this information, it is still essential to be a responsible borrower, and research more on different mortgage options. Here are some tips that can help you decide on what mortgage best fits you.
- Make sure that your credit score is high for a better chance of bargaining for a higher loan.
- Research on the various loans available.
- Analyze and compare different rates from several mortgage lenders.
- Know what questions should be asked to find out everything that you need to know regarding your loan.
- Get pre-approved for a mortgage.
Shopping for a mortgage loan
You will have to decide on what kind of loan you want since there are many options available. Aside from this, you will also need to determine the type of structure of your loan to determine how much your monthly payment will be and how much interest will there be with each payment. Loans have different requirements, and your option includes the following:
- Conventional loan – refers to a loan that is not guaranteed by the federal government, which adheres to the guidelines by Fannie Mae and Freddie Mac, and can have a fixed or adjustable rate.
- Veterans Affairs – is a loan that is guaranteed by the United States Department of Veterans Affairs that is only issued to eligible lenders. This type of loan is long term and offered to qualified American veterans or their surviving spouses.
- USDA – USDA mortgage is the type that is supported by the United States Department of Agriculture. It may offer up to 100% of the finances and has reduced mortgage insurance premiums.
- Utah Housing – this type of loan allows the qualified borrower to obtain the whole or a portion of the down payment and other closing costs, meaning, the borrower will be able to purchase a home even with little down payment.
- Federal Housing Administration – FHA, although not exactly a type of loan, but insurance that guarantees the lender if ever the borrower fails to pay for his loan.
- Fixed – a fixed loan has fixed interest rates for the entire term of the loan. The interest rate during the entire period of the loan is set when the loan started.
- Adjustable – this type of loan has an interest that is based on a pre-determined formula that may vary during the period of the loan through certain terms.
- Construction – a short term loan that is for meant to pay for the costs needed to build a home. It is usually offered only for a specific time until the house is built. However, once the house is done, a new loan is needed to pay off the construction loan.