If you have been thinking about taking out a Federal Housing Administration (FHA) loan in Ogden or Salt Lake City, Wasatch Peaks Credit Union says now might be a good time to do so while rates remain low in Utah.
Interest rates, in general, remain favorable for home buyers before the Federal Reserve increases them twice in 2018 and 2019, according to data from Freddie Mac. In the past five weeks since the end of June, the average rate for a 30-year fixed mortgage fell to 4.55%.
The lower rates from private lenders indicate that FHA loans may be even lower. However, take note that your credit profile will still be a major factor. Most people who decide to apply for FHA loans are either first-time buyers with no credit history or those who have a poor credit score.
If you belong from either one of these types, it’s likely that would need to pay higher interest on your loan. Still, some Americans prefer this kind of mortgage because of the low down payment. You will only need to pay 3.5% of a property’s sale price if your credit score is at least 580.
In Utah, this may translate to a down payment worth as low as $11,900. The average price of a house in the state costs $347,000.
When you already found a nice place to live, another reason to finalize your plans on an FHA loan involves a limited supply of houses. It’s also more likely that you would encounter more competition for listed properties in Salt Lake City, compared to Ogden and other lesser-known cities.
In the next 26 years, home prices in the state may cost $700,000 on average. It may happen sooner if the current shortage of homes continues to drive up prices.
Home buyers should consider an FHA mortgage as an affordable alternative since it provides you with access to financing even if you have a low credit score or none at all.