A mortgage is a loan that helps you buy real estate, and its rate determines the interest you'll pay on that loan. Think of this rate as the price tag of borrowing money: The lower it is, the less you'll end up paying. While mortgage rates in Utah are slightly higher than the national average, comparing offers from multiple lenders can help you secure an affordable loan.
Current Mortgage Rates in Utah
The average rate for 30-year fixed-rate mortgages in Utah is slightly lower than the national average at 7%, compared to 7.05% in the U.S. However, the state's 15-year fixed rate is 6.42%, slightly higher than the national average of 6.34% nationally. Utah's five-year adjustable-rate mortgage is 7.51%, compared to 7.34% across the U.S.
Remember, these rates can change due to economic conditions, Federal Reserve policies and the current housing demand. Staying updated on current rates can help you secure better loan terms.
Finding the Best Mortgage Rates in Utah
Mortgage rates are pivotal in determining how much you'll pay for your home over the long term. A lower figure can save you thousands of dollars, boost your financial flexibility and even help you build home equity faster. Taking the following steps can help you secure a lower rate over the life of your loan.
Use a Mortgage Broker
Brokers act as the middlemen between you and potential lenders. Their job is to help you find the most competitive mortgage rates and terms. With a mortgage broker, you have the advantage of leveraging their network and expertise. For example, if you're self-employed, a broker can direct you to a lender who specializes in non-traditional income streams, thereby increasing your chances of a lower rate.
Employ Negotiation Skills
Don't settle for the first rate you're offered. Instead, come prepared with rates from different lenders, as well as an understanding of your credit score and its impact on rates. Presenting these may make a lender willing to negotiate. The better prepared you are, the more likely you'll be able to secure a rate lower than initially offered.
Consider Working With a Local Lender
Local providers often have a better understanding of the housing market in Utah and offer more competitive rates than national lenders. For instance, a local lender might know that a new business park is opening, increasing home values in your area. Armed with this information, they might offer you a more competitive rate, anticipating that your property will appreciate over time.
Lock in Low Rates
Mortgage rates are subject to change due to various market conditions. When you find a rate you're comfortable with, you can lock it in for a specified period (often 30 to 60 days). It ensures that even if market conditions drive rates up before you close your loan, you can still get the ones you prefer. Just make sure to read the fine print, as some rate locks come with fees.
Work With Your Current Bank
If you already have accounts or loans with a bank, check whether they offer loyalty discounts on mortgage rates. For instance, a bank might remove a few basis points from your mortgage interest rate if you open a savings account or move your direct deposits to them.
Information is power, especially when hunting for the best mortgage rates in Utah. By using these tips, you can secure a rate that suits your current financial situation and sets you up for a stable financial future.
Mortgage Types in Utah
The average home value in Utah is about $510,173 — that’s distinctly higher than the national average of $349,770. Knowing this helps you understand how much you might need to borrow and underscores the importance of securing a good mortgage, especially in a state where homes are pricier. Fortunately, several mortgage options in Utah are available to suit your needs, budget and circumstances: View the comparison table below for an explanation of each.
Lower interest rates compared to some other mortgage types, greater term flexibility and no need for mortgage insurance if your down payment is 20% or more. This could save you a considerable amount over the life of the loan.
Requires a good-to-excellent credit score, typically a minimum of 620. If your down payment is below 20%, you'll need to pay for private mortgage insurance, adding to your monthly costs.
Specifically designed for veterans, active-duty service members and certain military spouses. No down payment is required, and interest rates are generally lower than conventional loans. No private mortgage insurance is needed, saving you money on monthly expenses.
You must meet specific service requirements to qualify. The loan is limited to your primary residence, and there might be a VA funding fee depending on your eligibility.
Easier qualification criteria, allowing for credit scores as low as 580. Down payments can be as little as 3.5%, making it accessible for first-time homebuyers or those with less-than-perfect credit.
Requires upfront and ongoing mortgage insurance premiums, potentially increasing your long-term costs. Loan limits may restrict the type of property you can buy.
Designed for rural homebuyers, offering the possibility of no down payment and reduced mortgage insurance costs. The interest rates are often lower than conventional loan rates, making monthly payments more affordable.
Eligibility is restricted by income and the property must be in a USDA-designated rural area. Mortgage insurance is still required, though often at a lower cost compared to other loan types.
Allows you to borrow more than the federal loan limits, which can be essential for buying higher-priced homes in Utah. These mortgages often offer competitive interest rates and may have more flexible repayment options.
Demands a higher credit score, usually around 700 or higher. The down payment can also be hefty — typically 20% or more. Higher interest rates could apply, making the loan more expensive over time.
Knowing about mortgage types is just one piece of the puzzle; another factor that's also important to consider is your mortgage's rate structure. Typically, rate structures come in one of two varieties:
Fixed-Rate Mortgages: Your interest rate stays the same throughout the loan term. It's predictable, so you'll know exactly what your monthly payments will be. This type is ideal if you plan on staying in the home for a long time.
Adjustable-Rate Mortgages (ARMs): Your interest rate can change after a certain period, usually five, seven or 10 years. This structure type could work in your favor if rates drop, but it can be risky if they rise. ARMs are better suited to those who plan to sell or refinance before the rate adjusts.
A mortgage calculator, such as the one MoneyGeek provides, is a handy tool you can use right from your phone or computer. After inputting some information, you can view an estimate of your monthly payments, including how much you'll pay in interest. This can help you understand how different mortgage interest rates or varying down payments can impact your monthly payment.
How to Get a Mortgage in Utah
Knowing what to expect at each stage of getting a mortgage can help you negotiate better terms, potentially saving you thousands of dollars over the life of the loan. Below, MoneyGeek breaks down each step to securing a mortgage to help you find the best deal available:
Check Your Credit Score
The importance of your credit score in getting a mortgage can't be overstated because lenders use it as a risk assessment tool. The better your credit standing, the lower the risk for the lender, which translates into a better mortgage rate. Make sure to use a reputable credit monitoring service to check your credit score. If your score needs a boost, consider delaying your mortgage application until you can improve it.
Before you start searching for homes, make sure that you have a clear understanding of what you can actually afford. Make sure to consider potential mortgage payments and additional costs, like property taxes, insurance and any homeowners association fees.
Every lender will offer slightly different terms and mortgage rates, so take the time to get quotes from at least three. Check reviews, ask for recommendations and don't hesitate to negotiate.
Submit Your Application
Choose your best lender option and fill out a detailed mortgage application. The lender will need several documents, including two years of tax returns, recent pay stubs, proof of other income — like bonuses or alimony — and your recent bank statements.
The lender will want to confirm that the house you're buying is worth the price you're paying. If the home appraises for less than your offer, you may need to make up the difference or renegotiate the sale price.
Mortgage Programs in Utah
In addition to your mortgage, owning a home comes with other hidden costs. Over time, things like repairs and property taxes can add up and stretch your budget. Mortgage programs can make your home loan mortgage more manageable, leaving you more financially flexible. For example, the Utah Housing Corporation (UHC) offers programs that can assist with down payments and closing costs, allowing you to keep some cash on hand for any unexpected expenses. Understanding what programs are available to you can help make buying a home easier and help you save money in the long run.
Down Payment Assistance
Utah's Down Payment Assistance program can help if you're considering buying a home but are short on initial funds. First, you'll need to get a primary home loan through a UHC-approved participating lender. They’ll determine how much you need for your down payment and closing costs. Then, you can borrow through a separate 30-year fixed-rate second mortgage.
Are you looking to buy but need help determining what kind of home loan suits you? UHC offers multiple loan programs, and they're for more than just traditional single-family homes. You can also get loans for condos and manufactured homes. Your loan options may vary depending on your credit score, monthly income and home price.
For instance, you could qualify for a loan if you have a credit score of 620 or more and a household income of up to $8,900 a month. Contact an approved lender to see which Utah Housing Loan makes the most sense for your situation.
First-Time Homebuyers Assistance Program (New Construction)
If you're a first-time homebuyer eyeing a newly built home in Utah, the First-Time Homebuyers Assistance Program can provide up to a $20,000 loan with 0% interest and no monthly payments. You must qualify for a Utah Housing Mortgage through a participating lender to obtain this loan.
If needed, you can also pair this assistance with Utah Housing's down payment help. Remember that you'll have to repay this assistance when you sell or refinance the home. Additionally, you must be a Utah resident for at least a year to qualify.
Grants for Law Enforcement
If you're working as a law enforcement or correctional officer in Utah, the state has set aside $5 million to aid in paying your mortgage costs. This grant can cover up to 3.5% of your home's purchase price, with a maximum limit of $25,000. The best part is the Law Enforcement Grant is a no-payment, no-interest grant. The only requirement is that you must continue working in Utah for at least five years after receiving it.
The grant's usage is flexible — you can use it for your down payment, closing costs or paying down your mortgage rate. To get started, connect with an approved Utah Housing Lender and be ready to make the purchased home your primary residence within 30 days of closing.
Utah offers a $2,500 grant to help veterans or those currently serving in the military buy a home. This grant is forgivable, meaning you don't have to pay it back, and it is available to veterans discharged in the last five years or first-time homebuyers who haven't owned a home in Utah for the past seven years.
You can combine the Veterans Grant with other loan programs like VA, FHA or conventional loans, as well as with Utah Housing Corporation's down payment assistance. The only catch is that these funds are limited, so make sure to close your home loan before the grant reservation expires. Use the money for your down payment or closing costs, and remember, you'll need to move into your new home within 30 days of closing.
Frequently Asked Questions
We answered some questions borrowers typically have about mortgage rates in Utah. That way, you get reliable information on how these rates compare to the national average, what elements affect them and more.
About Christopher Boston
- FRED Economic Data. "Homeownership Rate for Utah." Accessed September 20, 2023.
- FRED Economic Data. "Homeownership Rate in the United States." Accessed September 20, 2023.
- Utah Housing Corporation. "Down Payment Assistance." Accessed September 20, 2023.
- Utah Housing Corporation. "First-time Homebuyers Assistance Program (New Construction)." Accessed September 20, 2023.
- Utah Housing Corporation. "Grants for Law Enforcement." Accessed September 20, 2023.
- Utah Housing Corporation. "Home Loans." Accessed September 20, 2023.
- Utah Housing Corporation. "Veterans Grants." Accessed September 20, 2023.
- Zillow. "Utah Home Values." Accessed September 20, 2023.