Exploring Your Loan OPTIONS
A 30-year fixed rate loan is the most common loan choice and a good choice for many people, but it’s not the only kind of loan available. Depending on your circumstances and goals, you might also want to see if there are other choices that may fit your needs.
Set Your Goals
✔ Gain a basic understanding of your loan options and how they work
✔ Get a sense of current interest rates and how they will affect you
✔ Determine the amount of your down payment
✔ Obtain a pre-approval from a Utah mortgage broker
✔ Shop and find your dream home
Learn about different types of mortgage loans in Utah, such as conventional, FHA, or VA. Decide which loan best fits your needs, a fixed rate mortgage or an adjustable rate mortgage. Is a shorter term or a longer loan term better for you and your goals?
Talk to your Utah mortgage broker about mortgage rates to learn what you may expect to pay, and how different loan options affect rates. For example, you might compare a 30-year fixed rate mortgage against a 15-year fixed rate mortgage to see how the interest rates compare.
You may have already started looking at homes, or you may prefer to explore your loan choices a bit first before getting started looking at new homes.
However, don’t wait until you’ve found a home before you start thinking about your loan options. You want to have a good idea of what kind of mortgage loan is right for you before you make an offer on a new home.
Many homebuyers choose to put less than 20 percent down. When you put less than 20 percent down, you will likely need to pay for mortgage insurance. Mortgage insurance adds to your monthly payment and in some cases your loan costs, but it allows you get a loan you might otherwise be unable to get. Mortgage insurance protects the lender if you fall behind on your payments, which means lenders are more willing to lend to you. Mortgage insurance doesn’t protect you or pay your mortgage for you. Learn more about mortgage insurance and how it works.
Many local cities or counties have down payment assistance grant funds available for first-time homebuyers with low to moderate income.