Nebraska Mortgage & Refinancing

Last Updated on June 5, 2017 by Taylor Welshe

There are plenty of things to love about Nebraska, from its many different pretty cities and towns such as Lincoln, Omaha, and Grand Island to its multitude of outdoor attractions. There’s also the fact that cost of living in this state is cheaper than many other places in the country, and that it continues to grow, particularly in terms of economy. These are just some of its good qualities and features that attract quite a number of home buyers. (Source: Livability.com)

Home pricing

One of the major factors that contribute to the lower living costs in the Cornhusk State is housing. Here, homes have a median value of $146,400, while the countrywide median is $195,300. (Source: Zillow)

Home buyers will still find a multitude of homes at cheaper prices, as this depends on the specific type of residential property they will buy. For example, if they stick with a single-family home, which is what majority of the housing market is comprised of at 95.50%, they will find that the average value of such types of property is $88,603.28. PUD homes are the next cheapest, valued on average at $117,597.55, then condominiums at $122,914.93. Townhomes are the most expensive at $130,820.59.

Home lending

Historically, NE had mortgage rate averages a bit higher than that of the U. S. averages. For instance, in 2014, its rates had an average of 4.24%, as opposed with the 4.13% nationwide average. It did drop to 3.92% in 2015 though, although it still slightly exceeded the countrywide average of 3.88%. This trend continued to 2016, and now 2017.

Home buying 101

Home ownership comes with the satisfaction of having such a huge investment under one’s name. However, it is also one of the biggest financial responsibilities  one can ever have. This is why it’s extremely important for home buyers to arm themselves with mortgage knowledge, especially the critical factors to consider and the types of loans available to them.

The following questions will help buyers in making the right borrowing decisions:

  • Do they have guaranteed salary? If yes, can it, together with other sources of income, cover the additional (monthly) expenses associated with a mortgage?
  • How long do they intend to stay in the house?
  • Do they have enough money saved up for making a down payment of at least 20%?

All borrowers should answer these questions honestly, as it will help them determine if they’re really ready for home ownership.

Fixed-rate mortgages

When it comes to mortgages, the fixed-rate type remains the most commonly sought after in the state. As the term already suggests, this type of housing loan comes with an interest-rate that remains the same throughout the entire life of the term. The interest rate that a lender charges a borrower with for the first month will be the same for the last month.

The state’s average rate for a 30-year (the most popular term) fixed-rate mortgage is 4.31%.

Variable-rate mortgages

The advantage of ARMs is that they come with lower upfront interest rates. Known as the teaser rate, it is significantly lower than the regular rate of fixed-rate loans. Borrowers should remember though that this “promotional” rate only lasts for a specified period of time, such as the first one, three, or five years. This is why home buyers who don’t have plans of staying in the same house for longer than five or ten years usually take advantage of this mortgage.

Variable-rate mortgages in the state have an average interest rate of 2.88%.

Help with securing a mortgage

In Nebraska, those who need additional assistance in securing a mortgage have a number of help options.

For instance, qualifying first-time home buyers will find mortgages with lower interest rates through the assistance of the Nebraska Investment Finance Authority. The organization also offers eligible candidates with a first mortgage loan, as well as another loan that home buyers can use to help cover down payment and/or closing costs.

References:

Nebraska Investment Finance Authority

USDA Rural Development – Single Family Loans