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Are You Buying Your First Home? Don’t Forget to Ask These Questions

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Are you one of the millennials planning to buy your first home in Utah? Then you’ve come to the right place. Today, you’ll learn the answers to the most essential questions before you decide. 

  1. How Much Does a Utah Home Cost?

According to Zillow, the average home price in Utah is $355,000. That’s significantly higher than the national average, which is around $245,000. 

This also means that real estate here is still a seller’s market after the price soared by 5% in 2019. The good news is it could decline by 1.2% in 2021. 

Further, not all places in the state are expensive. In Ogden, for example, the average home value is $235,000. 

Meanwhile, in the capital, Salt Lake City, the home value index is $400,000. However, in places like Rosa Park, it could be less at $308,000. You can use a home mortgage calculator to know if you can afford it.

Home price, though, is just part of the costs of buying the property. You also need to pay closing costs. According to Finder, you can spend at least $5,000 for it, of which over 45% is due to tax.

  1. How Much Is the Property Tax in Utah?

As a potential homeowner, one of the taxes you need to pay is property tax. Unfortunately, Utah has one of the highest effective property tax rates at 0.661%, and Utahns usually spend at least $1,650 annually.

On the upside, if you live in a smaller home or a county or city with cheaper home prices, then your tax due is way less. Consider Hawaii, for instance. Its tax rate is only 0.29%. However, since properties are insanely pricey, the tax liability is still high.

Also, the average property tax paid in Utah is lower than the national average, which is $2,700. You can also deduct the amount up to $10,000 from your federal tax return. Note, though, that this limit already includes paid personal property taxes and other real estate taxes.

  1. Can You Get a Mortgage with a Thin Credit History or Low Credit Score?

Yes, you can. Some loan programs are designed for people who have these issues. One of these is the FHA loan, which has a low down payment of only 3.5%. 

FHA stands for Federal Housing Administration (FHA), which doesn’t give the mortgage but backs or insures it. This helps give the lenders some peace of mind. To qualify, your credit score can be as low as 580. 

If you don’t have the best credit score or thin credit history, you can submit other proof of your financial capability. These include records of your rental payments and zero 30-day delinquency with any of the creditors, such as utilities.

However, the final decision will depend on the lender. You can still get a mortgage, but you might have to pay a higher interest rate and not qualify for longer payment terms. 

It would be best that before you apply, spend at least a year to:

  • Build your credit history, such as paying your debts on time or applying for smaller loans 
  • Improve your credit score
  • Get a stable job
  • Boost your income 

Utah doesn’t have the cheapest homes or the lowest property tax. However, if you can live outside the most in-demand cities and counties, you can spend way less for your first mortgage in the state.

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