Utah Housing Loan options
Utah Housing Programs That Get You Into a Home for Little or Nothing Down
Did you know that in Utah there are 36 different ways to get into a home for almost little or no money out of pocket? (To learn more about these options, click here.)
In a recent Kasby Real Estate Group video, John Harrison, the branch manager of Castle and Cooke Mortgage, walked through four Utah Housing options that can help first-time homebuyers stop throwing away money on rent and put their hard-earned cash toward a new home.
”All of them are great ways to get into a home for minimal money,” Harrison says. “Utah Housing is a unique program. Only 15 percent of the banks here in Utah actually offer that program, but it’s a great way for people to get in a house.”
Many prospective homebuyers believe they need a large down payment before getting a new home, but that’s a myth. Here are a few ways you can invest in a home now:
Utah Housing Programs
Of the four Utah Housing programs Harrison discussed, three are FHA-based loans, and all provide many flexible options.
For those with a credit score of 620, there is a low-credit FHA loan that can help you get into a new house with little down.
For those with a credit score of 660 or higher, there are two FHA-based loans that can help you secure a 96.5 percent mortgage and qualify for a 6 percent second mortgage that covers the down payment and most of the closing costs.
One drawback is that Utah Housing does charge on the higher end for closing costs. Most closing costs range between 2 to 5 percent, and Utah Housing costs 3.5 percent. However, since the second mortgage will cover 2.5 percent of the closing costs, you could get into a $300,000 home for $3,000.
Another Utah Housing option is a conventional loan. This includes a 97 percent mortgage with the added perk of no mortgage insurance. In addition, you can qualify for a 5 percent second mortgage that covers your down payment and 2 percent of your closing costs, leaving you to cover only 1.5 percent. So, if you were buying the same $300,000 home, you would need to pay $4,500 upfront. Or, if you have a real estate agent helping negotiate the offer, they can make sure that closing cost is covered, meaning you would need to pay nothing upfront.
While all the numbers and percentages can often get confusing, we’re here to help and answer your questions. If you want to learn more about your home-buying options, contact us. Subscribe to our YouTube channel, follow us on Facebook, and stay tuned for more videos where we’ll dive into other home loans and financing program options.