Utah Housing – Amazing Loan Option With NO Money Down!
I had an argument with someone several years ago about the mortgage industry and about programs that allow potential home buyers the option of No Money Down in order to purchase a home. Her argument was that this destroyed the integrity of the real estate market and was the shortcoming of the mortgage industry and the home owners themselves. Obviously, I disagreed. I believe if you have demonstrated in the past the ability to manage your debt and make your outstanding payments on time you have earned the right to purchase a home. Why should a family who has adequate funds every month to pay rent and has been doing so for a long period of time not be given the opportunity to buy into the American Dream of homeownership?
Paying rent is a waste of money. If you pay a $1000 dollars a month for 5 years you have given your landlord sixty thousand dollars. Wow! That is a significant number! We know that home ownership strengthens communities, builds stronger relationships, adds security to families and fosters a stronger work ethic. The list of good things that come out of homeownership is endless. Many of the No Money Down programs disappeared over the past several years. For good reasons, Utah Housing has been the exception.
Utah Housing Corporation is a state agency that helps supply money to first time homebuyers and recently opened their program to all available clients that fit their qualifications. Utah Housing has always set strong underwriting standards which have allowed them to continue to offer no money down financing to the market. Many first-time buyers have a challenge coming up with the initial down payment requirements for a home, but this does not mean they are not credit worthy and responsible enough to purchase a new home.
Here is the way the program works: The guidelines and down payment requirements follow traditional FHA rules. The guidelines require 3.5% to be put down as a down payment, but Utah Housing will allow you to finance that 3.5% into a second loan. The interest rate on the 3.5% down payment is always 2% points higher than the first mortgage. If the first mortgage is at a 4% interest rate, the second mortgage would be at 6%. This is a great deal! Since you have two mortgages you can work to pay off the second mortgage first. I have helped hundreds of clients purchase their first home utilizing this program and I look forward to helping the next well-deserved homeowner purchase their home with no money down.