If you plan to take out a home loan in Salt Lake City, American Loans and other experts remind that the average rate for a 30-year mortgage in Utah is 4.90% for this year.
The actual rates will depend on several factors for different borrowers, but these may range between 4.50% and 5.50%. Those who want lower interest rates should consider a housing loan with a shorter term, or rates that could be adjusted.
Most fixed-rate term loans may have higher interest rates, although you are guaranteed with paying off the same amount regardless of any changes in mortgage rates. Your credit history, the borrowed amount, and percentage of down payment will also determine the actual rate for your loan.
Calculating Average Mortgage Rates
The loan amount and loan-to-value ratio are two of the most important things to remember when trying to calculate the applicable mortgage rate for your case. Let’s say you have a mortgage balance that’s higher than $200,000, the interest rate payable to the loan will also be higher at the same time. LTV rates are generally determined by the percentage of down payment, so paying 20% upfront will result to lower interest than paying a 10% down payment.
Of course, your credit score will be important too and it may even trump a lower down payment’s impact. This serves as another reminder to take care of your credit history, as lenders are likely willing to give a lower rate to borrowers with good profiles regardless of how much they’re willing to pay upfront.
Increase Home Prices
If you have a bad credit score, another ideal reason to pay a bigger down payment involves higher home prices in the U.S. The Federal Housing Finance Agency’s data showed that Utah was among the states with the higher price growth in the third quarter of 2018. Prices in the state rose by 10% year over year, which was the fourth largest in the country.
Idaho ranked as the top state with the biggest annual increase at 15%, followed closely behind by Nevada’s 15%. Washington’s home prices increased by 10.6%, while those in Colorado climbed 9.2% during the same period. On the other hand, home prices in Alaska and North Dakota recorded the smallest growth at 0.2% and 1%, respectively.
Utah’ Expensive Markets
Homebuyers should expect that some counties in Utah may have more expensive prices than other places in the state. In Salt Lake County, for instance, the average cost of a standalone house amounted to $355,000 in the third quarter, up by $10,000 from the first quarter of 2018.
This means that if you plan to buy a median-priced home and only plan to spend a 10% down payment for a 30-year mortgage, there is a high chance of paying off a higher interest over the course of the loan.
When choosing the right mortgage plan in Utah for you, think about the service provider’s experience in the industry. Choose a company preferably with more than 20 years of experience, and use industry ratings such as the Better Business Bureau’s A+ Rating to guide your decision.