The joys of homeownership often cannot be overstated. As mortgage lenders, we know just how many people want to buy a home in Utah. Especially if you are a first-time home buyer, the homebuying experience can be truly thrilling. Everyone wants to realize the American dream of homeownership! If you’re on the fence about buying a home, the mortgage lenders at Integrity First Lending have some reasons to convince you it’s the right move.
Real estate almost always appreciates in value over time, whether it is a piece of undeveloped land, a lot or a home. When you buy your own home, you’re investing in your future.
It’s no secret that rents have been skyrocketing lately. According to a recent CBS news report, the biggest hikes have been in smaller cities and towns. Every month you pay rent, the money goes in someone else’s pocket, where you never see it again. When you pay a mortgage, you’re paying for your own home. Plus, homeowners get a tax break — mortgage interest is tax-deductible.
When you buy a home, one day you will be able to sell it if you want to — likely for much more than you paid for it — and that’s something you can never do when you rent.
Each month you pay your mortgage, you are adding to your home equity. You can take equity out of your home to fund purchases you may not have otherwise been able to afford, such as a new car or college tuition.
If you need a loan to start a business, you can use your home as collateral. If your business takes a few years to get off the ground and money is tight, you can get a roommate to help pay your monthly mortgage — then the rental money goes in your pocket.
After you retire, if you don’t have as much money in your 401(k) as you hoped, you can get a reverse mortgage to help you pay expenses each month.
Many studies show that homeowners are happier than renters. The reasons for this are many. The first is the satisfaction of being able to buy your own home. It’s an achievement, and it’s something to be proud of.
Being a homeowner is rewarding because it affords you both privacy and autonomy. You can hang pictures anywhere you like or paint the walls any color you want. You don’t have to hear neighbors making noise or be bothered by cooking smells. The whole place is yours to do with what you like.
Are you convinced yet? Our mortgage company wants you to be happy — we want to approve your home loan!
Promise yourself that this is the year you will stop paying rent and become a homeowner. Apply online today to prequalify and then talk to our team of mortgage lenders at Integrity First Lending about next steps.
When you’re shopping for your first home, you may wonder what the rules are for first-time home buyers in Utah. You don’t want to make any mistakes or miss out on any deals for your first home mortgage. Don’t worry — trust the mortgage lenders at Integrity First Lending to help you through this uncharted territory.
Below, we answer some common questions first-time home buyers in Utah ask our mortgage lenders.
Yes, there is no provision against borrowing money from your 401(k) to fund your down payment on your first home.
Experts explain that in a perfect world, using your 401(k) for a down payment is not the best financial choice. The good part about borrowing from your 401(k) to make a down payment on a home is that as you pay back your loan, you are paying interest to yourself. However, it’s hard to replace the losses you incur by not having that money in your retirement account for years.
Thus, if you can borrow from friends or relatives for your down payment, this is a better choice than taking money out of your 401(k). However, paying rent for years while you try to save up a down payment is also a financial drain, so in the end, this is a personal decision.
Yes, if you own land, you can apply for a construction loan as a first-time home buyer. However, if you also need to buy the land and you are applying for an FHA loan, this usually must be done in conjunction with a construction loan. That means FHA will likely not approve a loan to buy land without a concrete plan to build a house on it immediately.
Currently, the FHA is offering a one-time close program, which means you only have to pay closing costs once for the purchase of the land, the construction loan and the conversion to a permanent loan. This can be a significant savings.
PMI, or private mortgage insurance, is a monthly fee home buyers must pay if they do not put down at least 20% of the price of the home. It’s insurance against default, so these fees are nonrefundable. They are generally about $100-$200 per month. They must be paid until the homeowner pays on their mortgage long enough to reach the 20% mark.
Since home prices today are so high, many home buyers — first time or otherwise — end up paying PMI for a period of time. Home values in Utah vary greatly by county, but you would need a down payment of $60,000 on a $300,000 house to reach the 20% threshold.
While some mortgage lenders can help home buyers find a way around PMI, generally speaking, the only way to avoid it is by raising the money some other way, such as by borrowing from a friend or relative, selling something of value or taking a side gig to raise money quickly.
If you’re a first-time home buyer, come talk to the mortgage lenders at Integrity First Lending. We can show you some mortgage programs that can help you buy the home of your dreams. Prequalify by applying online today.
With mortgage interest rates so low, many homeowners are looking into refinancing to save money. But some are concerned that they might not qualify for a refinance in Utah. How do you know if you are likely to be approved for a refinance in Utah? The mortgage lenders at Integrity First Lending of Salt Lake City give you some helpful information on ways to improve your odds.
If not much has changed in your financial picture since you bought your home, your application to refinance your home in Utah will likely be approved without issue. However, the truth is that uncertainty in the market has changed the qualifications not just a refinance, but also those seeking mortgages in Utah, potentially making the process more difficult for buyers.
Risk increased exponentially in 2020 as the pandemic bankrupted tens of thousands of businesses and individuals. Recovery has been slow and uncertain, so lenders have been taking fewer chances on applicants.
Those in the least rosy positions now include anyone looking to refinance their home, buyers or refinancers who are self-employed, and those looking for jumbo mortgages or to buy second homes. Conventional mortgages are slightly harder to get now, but government-backed mortgages such as FHA loans and VA loans remain largely unaffected by the changes.
What affects your ability to be approved for a refinance in Salt Lake City?
If you’re close to the margin, help yourself out by not making any major purchases in the upcoming weeks that will affect the ratio. If you’re able to borrow money from a friend or family member to pay down your debt, this can help as well.
The good news is, inquiring about a refinance in Utah does not hurt your credit, because one of the last steps our Salt Lake City mortgage company takes is running a credit check. We look at other qualifying factors first to make sure an applicant for a refinance in Utah seems like a good candidate.
If we believe you may not qualify for a refinance, we’ll tell you why, and you may be able to rectify the problem, clearing your way toward a successful refinance. Contact the friendly, helpful mortgage lenders at Integrity First Lending today to see if you qualify to refinance your home in Utah.
It’s easy to apply for a home loan — you can do it on your phone in minutes right from our website. But if you’ve never applied for a home loan before, you might be concerned about not getting approved. It’s disappointing, and it can make you leery of applying again. Integrity First Lending has some tips for you to help you improve your chances of being approved for a home loan.
The first thing you want to do before you apply for any type of loan is to know your credit score. There was a time when checking your credit could cost you money or even cause your score to go down, but that’s not the case anymore. You can check your credit any time. And that’s a good thing, because you’ll want to know if there is anything suspicious on your credit report that you need to address.
To stand a chance at being approved for a conventional loan, you should have a credit score of at least 620. For an FHA loan, your credit score should be at least 580.
Keep in mind these are minimums. The higher your credit score is, the better your chance of approval, and the lower the interest rate your mortgage lender will be able to offer you.
There are a few things you can do to improve your credit score — besides making all your payments on time and in full.
This may seem ironic, but if you haven’t made many payments of any kind — if you’ve never had a car loan or a student loan, for instance — this could work against you because on-time payments boost your credit. If there is little data on your credit report, you may want to think about establishing more of a credit history.
If you do have credit cards and you make the payments on time, that’s good, but carrying high balances hurts your credit (and costs you big time in interest charges). To be considered on solid financial ground, you should keep your credit card balances under 30% of your limit for each.
Even if you have no balances, having lots of open credit card accounts can work against you too. That’s because if you have $50,000 in available credit, your mortgage lender knows that you can rack up a debt for this amount at any time, which can impact your ability to pay your mortgage, and they won’t want to take the risk.
For the purposes of applying for a mortgage, a high debt-to-income ratio also impacts you negatively, even if your credit score is good. You may make all your payments in full and on time, but if you don’t have much wiggle room in your budget, a mortgage lender can assume you’re only one major car repair away from financial disaster.
It’s also important to be able to show you have a solid, reliable income. Whether you’re an employee, own your own business or have another type of income, it must be steady and dependable.
We hope that our advice has helped you prepare for homeownership. Call the team at Integrity First Lending anytime you have questions or need help applying for a home loan in Utah.
Are you wondering if you qualify for a Veterans Administration loan in Utah? These loans come with very favorable terms, but only certain military personnel are allowed to apply for them. Integrity First Lending facilitates VA loans for homebuyers in Salt Lake City and throughout Utah.
President Franklin D. Roosevelt created VA loans in 1944 as one of the many benefits of the GI Bill. As such, VA loans are backed by the government in the same way that FHA loans and USDA loans are.
VA loans are prized mostly for their $0 down option. VA loans allow homebuyers to finance 100% of their home with no money down. It is possible to get a $0 down deal with other mortgage programs, but their terms and conditions are usually more restrictive. Often when homebuyers put down less than 20% on a home, they must pay private mortgage insurance (usually $100-$200 per month) until they reach 20% equity.
While a VA loan does not require you to pay PMI, there is a funding fee that runs about 2%-3% of the purchase price of the home. However, it is usually less than PMI, and most mortgage lenders will allow you to roll the fee into the loan, so you don’t need to come up with the cash.
Generally speaking, service members, veterans and surviving spouses of veterans can apply for VA loans. You are considered a veteran if you have served 181 days during peacetime or 90 consecutive days during wartime.
If you have been dishonorably discharged, you can’t apply for a VA loan. You don’t need to be honorably discharged however; other types of discharges are acceptable.
Those in the Reserves or National Guard can apply only if they have served for at least six consecutive years.
If you’re the surviving spouse of a veteran who has died in the line of duty or from injuries they suffered while serving, you may apply for a VA loan.
Once you determine you are eligible to apply, your mortgage lender will look at other qualifying factors before approving you for a VA loan.
The government does not require VA loan applicants to have a minimum credit score, but most mortgage lenders do. If you have filed for bankruptcy, the wait to apply for a VA loan is shorter than it is for some other loans.
You can get a VA loan if you don’t have a job, but you must show that you have a source of income, such as Social Security, disability, alimony, etc. You can’t get a VA loan if you owe back child support.
You can use your VA loan to buy a home, a mobile home or land if you are building your home on it right away. You can even use your VA loan to fix up the home you already own.
Many people think a home equity loan and a home equity line of credit are the same thing. They’re similar, but they aren’t exactly the same. Learn the difference between home equity loans and home equity lines of credit from the experience team at Integrity First Lending of Utah.
A home equity loan is money you borrow against the equity in your home. Many homeowners think their home equity is equal to the amount they have paid thus far on their mortgage, but that’s not exactly how your home equity is determined.
Let’s say you put $20,000 down 10 years ago on a $300,000 home and since then you have paid in $80,000. That’s $100,000 in home equity, right? Not necessarily.
When you first begin paying your mortgage, more of each payment goes to interest than principal, so the amount you owe will appear to shrink more slowly than you might have thought.
However, it is likely your home has increased in value in the last 10 years. If you have made home improvements, it may have increased even more. So you may have more than $100,000 in equity in your home. You may be asked to get an appraisal to determine the exact value of your property.
With a home equity loan, you can usually borrow up to 80% of the value of your home and use it for anything you like — home improvements, college tuition, debt consolidation or even a vacation.
When you are approved for a home equity loan, you get the amount in a lump sum. When you’re approved for a home equity line of credit, you are given access to a certain amount of money for a predetermined period of time.
One advantage of a HELOC over a home equity loan is that you can take out only as much money as you need at a time, rather than one large lump sum. This may help prevent you from overspending. However, interest rates on HELOCs are variable, while interest rates on home equity loans are fixed. A variable interest rate can sometimes impact your budget negatively when rates change.
In a way, a HELOC is a bit like having a credit card. You have a fixed amount you are allowed to spend anytime on anything you want. One important difference is that if you find yourself unable to pay back the money you withdrew with your HELOC, your lender could sell your home in order to get their money back. When you use a credit card, that loan is unsecured. That’s why the interest rates on credit cards over time are astronomical.
If you’re not sure if a home equity loan or a HELOC would be better for your situation, talk to the experts at Integrity First Lending of Salt Lake City, Utah. We’ll run the numbers for you so you’ll have the information you need to make the right decision for you.
You may have heard that mortgage interest rates are at historic lows. It’s true, and it’s a good time to buy a home in Utah — or anywhere, for that matter. But why do interest rates vary? Why are they not the same every day for everyone? The mortgage lenders at Integrity First Lending explain how to determine what kind of mortgage interest rate in Utah you can expect.
One aspect of mortgage lending that has a big effect on mortgage interest rates is the term of the loan. The term is how long you will pay on your loan. Common loan terms are 15, 20, 25 and 30 years. When you Google “mortgage interest rates today,” the first number that comes up is usually for a 30-year loan, since these are most common.
Interest rates go down as the term gets lower, with a 15-year term being the lowest. The reason these rates are lower is because the mortgage lender doesn’t have to wait as long to get their money back.
A fixed-rate mortgage stays the same throughout the life of your loan. Whatever rate you got when you took out the mortgage is the rate you keep. The only way to change it is to refinance your loan. Many homeowners refinance when rates fall, taking advantage of lower interest rates. If they shorten the term of their loan at the same time, they could save even more.
An ARM, also known as an adjustable-rate mortgage, fluctuates with the market. If interest rates go up, your interest rate will go up. If rates go down, your rate will go down. Many people dislike the uncertainty of not knowing how, when or if their mortgage payment will change and if they will be able to afford it.
The good part about an ARM is that when homebuyers agree to this type of rate, they usually get a lower introductory rate that is locked in for a period of years. As this period expires, homebuyers can refinance and get a fixed-rate mortgage or a new ARM with better rates.
Regardless of whether you choose a fixed-rate mortgage or an ARM, or what the term of your loan is, your interest rate may be affected by your credit score. Homebuyers with good credit scores will get the lowest interest rates. Those with poor credit scores may not get home loan approval at all, and those in the middle may be approved, but at a higher interest rate.
Your mortgage interest rate is tied to risk. If your credit score is mediocre, the mortgage lender is taking a bigger risk by expecting you to make your payments in full and on time than they would with someone with a higher credit score. If you’re not in a big hurry to purchase a home, you may want to wait six months to a year for your credit score to improve enough to help you get a better mortgage rate in Utah.
For more information about mortgage rates or to apply for a home loan, home equity loan or to refinance your home in Utah, talk to the friendly, helpful team at Integrity First Lending.
When you’re having cash flow problems, you might consider a home equity loan in Utah. These types of loans can be a lifesaver, or a way to achieve your dreams. But it’s good to consider the ins and outs of a home equity loan before deciding to apply for one. The mortgage lenders at Integrity First Lending help clients get approved for home equity loans in Utah.
When you get a home equity loan, you are borrowing against the equity in your home. The amount available to you is the value of the home minus the amount you owe on it. If you have owned your home for many years, the value of your home might be much greater than it was when you bought it. So you may have only paid $100,000 toward your principal, but have $250,000 in equity, due to the increasing value of your home.
The beauty of a home equity loan is that it can be used for anything. No one asks you what you will use the money for. You can pay off school loans, buy a new car, lend your children money for a down payment on their own homes, do home improvements or take a fancy vacation.
That being said, there is some accepted wisdom about what type of expenditure is and is not a good reason to take out a home equity loan. Some of it comes down to math.
If you’re paying on a student loan that’s 5% interest and you could refinance your home at 2.8% to take out some of the equity to pay off that debt, you could save a lot of money. However, if you drop below 20% equity in your home and you have to start paying PMI, that will eat into some of your savings.
If you want to take out a home equity loan in Utah to improve your home through expansion or renovations, this is usually considered a worthwhile investment.
Taking out a home equity loan to buy a new car or finance a fancy vacation might not be a great idea, however. These are not investments that will improve your financial outlook. Similarly, you should be careful if you plan to take out a home equity loan to lend someone money, even if it’s a family member, because they may not be able to pay the money back.
Taking out a home equity loan to pay bills should be a last resort. If you have lost your job and fallen on hard times, your home equity might be all you have right now. But if you dip into it and you are unable to pay your mortgage later, you could lose your home.
We hope our mortgage lenders’ advice was helpful to you in deciding whether to get a home equity loan in Utah. When you’re ready to apply, use our online tool or make an appointment to come in and apply in person. We’re here to help!
Arguably, the hardest part of buying a home in Utah is coming up with the down payment. You may know people who have put tens of thousands of dollars down and others who got a zero-down mortgage in Utah. How does it work? How much do you really need? The mortgage lenders at Integrity First Lending can tell you.
Traditionally, mortgage lenders have recommended that homebuyers save up 20% of the purchase price of a home in their target price range. Most homebuyers who don’t have 20% to put down have to pay PMI (private mortgage insurance) each month until they achieve 20% equity in the home.
PMI protects the mortgage lender from losses in the case of foreclosure. But paying $100-$200 more per month until you reach 20% equity can take a long time and cost many thousands of dollars. And PMI doesn’t go toward your mortgage — either the interest or the principal. It goes straight to the insurance company.
The median home price in Salt Lake City today is about a half-million dollars. When you consider the whole state of Utah — including rural areas — the price drops to $400,000. So a down payment of 20% on most homes in Utah is about $80,000. As a longtime Utah mortgage company, we understand that it can be hard to save up $80,000-$100,000.
Especially if you are paying on student loans or other types of debt, it can take many years to save that much money.
What are your alternatives?
Many mortgage lenders will approve your mortgage with 3% down if you have a minimum credit score of 620. FHA loans often accept 3.5% down. However, that’s still $13,000-$15,000. And you’ll have to pay PMI along with your monthly payment of mortgage, interest and taxes.
If you’re a first-time homebuyer, you may qualify for a zero-down home loan in Utah. If you’re amenable to living in a rural area, you may be able to qualify for a USDA loan, which is also no money down. If you’re a service member, veteran or the surviving spouse of a service member or veteran, you may qualify for a VA loan, which requires no money down.
Both VA and USDA loans also do not require PMI; however, you must pay fees to the lender at closing to protect them against foreclosure.
Whether you want to get a home in Salt Lake City or another part of Utah, the mortgage lenders at Integrity Lending can help. Mortgage rates in Utah are historically low, so now is the best time to buy. Give us a call or come in to talk to our friendly mortgage lenders. We’ll help you figure out a way to become a Utah homeowner.
When you’re considering buying a home, you want to make sure you choose one that you can afford. But how do you know? Integrity First Lending’s mortgage payment calculator can help.
Integrity First Lending has a tool that makes it easy to calculate your mortgage payments. Simply plug in the numbers: the cost of the home, your down payment, the interest rate, the term you are choosing and the type of mortgage you’re applying for. Our mortgage payment calculator then gives you an estimate of what your monthly mortgage payments will be.
This figure is an estimate because several factors can affect the final number:
The beauty of our mortgage payment calculator is that you can play with the numbers and make adjustments to find a way to make buying a house affordable for you.
For instance, if the mortgage payment calculator says your payment will be about $2,000 and that is too much for you, try lengthening the term to see how much it lowers your payments. Or, if you can borrow money from a friend or relative to increase your down payment, this will also decrease your monthly payments.
If you can’t find a way to make the numbers work, consider shopping for a lower-priced house.
As mortgage lenders, we sometimes see homeowners who do not leave themselves enough wiggle room with their mortgage. They take on a large mortgage that they can technically pay, but if something unexpected happens — a job loss, an expensive car repair or another financial setback — it can quickly tip the scales, putting them behind on mortgage payments. This is not only stressful, but it affects your credit too.
It’s better to leave yourself a little cushion when shopping for a home loan in Utah.
Now that you know how our mortgage payment calculator works, play with it for a little while and then come in and see our mortgage lenders. We’ll collect some information from you, such as your income, credit score, debt-to-income ratio, etc., and run the numbers to see what type of mortgage you qualify for and how much house you can afford. Once you are pre-approved, you can start shopping for a home in Utah with confidence!