Out of the million people who reside in Montana, many of them will be looking for a mortgage loan. Montana has much to offer its citizens. The state is a paradise for people who love the outdoors. Montana boasts the largest migratory elk herd in the United States, and the state is home to a huge population of deer and antelope. You can truly have a “Home on the Range” in Montana. Zillow states that there are almost 16,000 homes for sale in Montana. Realtor.com lists the median home price in Montana at $180,000. This is quite a bit higher than the county’s average median price for a home. Getting a mortgage can be very exciting, but it can also be intimidating, so you need to know what to expect out of the process.
Montana Mortgage Rates
https://www.zillow.com/mortgage-rates/mt/ states that the rate for a 30-year loan stands at 4.08%, and the rate for a 20-year loan is 3.86%. A 15-year fixed rate will be 3.25%. With a fixed rate loan, your rate will be constant throughout the life of the loan. It will be easier to budget. If you prefer an adjustable rate mortgage, the rate in Montana for 7/1 ARM is 3.35%, and the rate for a 5/1 ARM will be 3.22% A 3/1 ARM will be 3.23%. With an adjustable rate mortgage, your rate will change with the market. You will start out with an introductory period, and then your rate could increase or decrease. Mortgage rates in Montana are higher than the nation’s average rate.
Types of Mortgage Loans
If you are considering a mortgage, you need to know what types of loan are available to you. These options include:
- FHA Mortgages: This loan is probably the most convenient for first time homebuyers. The credit requirements are a little more lenient, and you can get a loan with as little as a 3.5% down payment. It is backed by the Federal Housing Administration.
- VA Mortgages: If you are serving in the military or if you are retired military, this is probably the best option for you. Backed by the Veteran’s Administration, this loan does not require a down payment.
- USDA Mortgages: This loan is provided by the US Department of Agriculture. It is intended for people who do not make as much income.
- Conventional Mortgages: You can obtain this loan for as little as a 3% down payment. It is not insured by the federal government.
Montana Mortgage Laws
Fortunately, there are numerous laws in place to protect you as a consumer. Lenders are required to act in a professional and honest manner. They cannot discriminate against you for any reason. Lenders must also provide you with a Truth in Lending statement, which will tell you the exact cost of the loan, number of payments, annual percentage rate, and total amount financed. A Good Faith Estimate must also be given to you that will state all of the fees and closing cost involved with the loan. Montana lenders are required to be licensed by the state.
Applying for a Mortgage in Montana
Rates will vary among lenders in the state, so you need to compare all lenders and review their terms and conditions. Find a lender that will offer you the lowest rate that you can receive for a loan. Lenders will allow you to get pre-qualified for a loan. You can then shop for a home knowing the price that you can pay. During the application process, you will be asked to submit documents to the lender, including pay stubs, bank statements, W2 forms, and income tax returns. It is a good idea to have all of these documents available before you apply to speed up the process. After you have received the required documents from the lender, your loan will be sent to underwriting for final approval. Make sure you read over all of the documents carefully before you sign and agree to the terms. After the loan is approved, you will set up a time and place to close on the loan. The length of time it takes to get a mortgage is about 30-45 days.