Montana Mortgage Overview
If you're looking for wide-open spaces and
incredible geographical features, you've found it in Montana with the Rocky
Mountains and Great Plains. Home to just over 1 million people, the median home
price is $230,600, making it an affordable place to live.
If you're thinking of living in Montana,
here are your top loan options:
Montana FHA loans
Borrowers with a blemished credit
history have good luck with the FHA loan. With a 580 credit score and 50
percent debt ratio, you can secure 97.5 percent funding. The 3.5 percent down payment
can be from your funds or gift funds. If you have a 500 - 579 credit score, you
need 10 percent down, but may still qualify. At least 3.5 percent of the down
payment must come from your funds.
Montana VA loans
Veterans have a good chance
at securing a VA loan, which is 100 percent financing. You need a 620 credit
score and enough time served in the military (90 days during war and 181 days
during peacetime). VA loans don't require mortgage insurance and have flexible underwriting
guidelines, focusing mostly on your monthly disposable income to make sure you
can afford your bills and the cost of living.
Montana USDA loans
If you don't qualify for an
FHA or VA loan, look at the USDA possibilities. It's a program for low to moderate-income
families. If you are eligible, you can get 100 percent financing, which means
no down payment. You need a 640 credit score and a max 41 percent debt ratio.
USDA loans have mortgage insurance, but the rates are low.
Montana conventional loans
Conventional loans
are the traditional loans most people think of that requires a 20 percent down
payment. They don't. First-time homebuyers need a 3 percent down payment and
subsequent buyers need a 5 percent down payment. Everyone needs at least a 660
credit score to qualify. If you put down less than 20 percent, you'll pay PMI,
but only until you owe less than 80 percent of the home's value.
First-Time Homebuyer Programs in Montana
Regular Bond Program
This Montana housing
program provides first-time homebuyers with affordable financing. The 30-year
term has below-market rates. You must meet the income limits for your area and
take a homebuyer education course to qualify.
Down Payment Assistance
If you're eligible for
the Regular Bond Program, you may also qualify for DPA.
You may receive up to 5 percent of the sales price or $10,000. The Bond
Advantage DPA is a 15-year repayable loan with low interest. The MBOH 0%
Deferred DPA is a deferred loan for up to $6,500. You repay the loan when you sell
the home or refinance.
80% Combined Program
If you're eligible for
Montana Housing assistance, you may secure this FHA alternative. You get 100
percent financing, with the first mortgage at 80 percent so you avoid mortgage
insurance. The second loan is for 20 percent and is from a non-profit agency.
Montana Veteran's Home Loan Program
Eligible
veterans who don't qualify for a traditional VA loan may get help from the
Montana Housing assistance program for Vas. The loan has an interest rate of 1
percent below the market rate.
Mortgage Credit Certificate
This provides
eligible homebuyers with a tax credit for the mortgage interest paid each year
equal to the lesser of 20 percent of the interest paid or $2,000 per year. This
lasts for the entire loan term.
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