Mortgage Rates Nebraska: A Guide To Buying Homes In The State
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The Nebraska housing market continues to flourish despite the coronavirus pandemic. Even with rising home values, homes in the state are spending less time on listings before being snatched up.
If you’re looking to call Nebraska home, you need to move fast. But that’s not all – to ensure you get the best value out of your home purchase, you need to know the local mortgage rates.
This guide will help you find the best mortgages for your Nebraska home. We don’t just provide inside access to the latest mortgage rates in Nebraska, but we also share essential advice for new homeowners.
Home Loan Options In Nebraska
The average American homebuyer has three options of mortgage loans. Here are the key details of each loan type, including their rates, terms, and caveats.
Conventional Home Loan
Conventional home loans are any mortgages that aren’t secured by government entities. These loan types are offered by banks and other private lenders.
The loan amount on these mortgages is limited by the Federal Housing Finance Agency (FHFA). In the State of Nebraska, conforming loan limits are set at $548,250, on par with the national standard.
With fixed-rate mortgages, your rates won’t change regardless of market fluctuations. Stable rates mean predictable monthly payments, which helps new home buyers and long-term financial planners. However, unless you refinance, you have no chance of reducing your rates.
Most fixed-rate loans are offered in 30-year loan terms. However, you can opt for 15-year or 20-year loans if you’re looking to get lower rates – with the caveat of higher mortgage payments.
Adjustable-Rate Mortgage (ARM)
Adjustable-rate mortgages have shifting rates that change according to a market index. An introductory fixed-rate period at the beginning of the loan is followed by the ARM’s adjustable period – typically, the ARM rate readjusts every year.
Due to the lower introductory rates compared to their fixed-rate counterparts, ARMs are popular for shorter-term savings. The most popular ARM type is the 5/1 ARM, where your introductory period lasts five years. Some lenders also offer 3/1, 7/1, and 10/1 ARMs.
Some homes may be priced above local loan amount limits. To buy them, you can take out a jumbo loan. Jumbo home loans allow you to exceed conforming loan limits with the trade-off of higher rates.
To boost the homeownership rate in certain demographics, the U.S. government provides several loan programs. These loan types typically offer a more affordable interest rate as long as you fulfill the specific qualification requirements.
The top three government-backed loans are:
FHA loan: This type of loan is aimed at low-income borrowers. Alongside lower rates and down payment minimum, they feature a more lenient credit score requirement. However, you need to pay private mortgage insurance (PMI) fees for the entire loan’s life.
VA loan: To qualify for a VA loan, you need to be a military member. Qualifying for a VA loan gets you a no-down payment loan with no PMI fees. However, you need to pay funding fees upon closing.
USDA loan: If you’re looking to live in eligible rural areas, you can opt for a USDA loan. These loans come with no down payment requirements and lower PMI fees compared to FHA loans.
Taking out a refinance means getting a new loan to pay your existing mortgage. Most people do this to take advantage of falling refinance rates, leverage home equity, or modify the terms of an existing loan.
The two major refinance loan types are:
Rate and term refinance: This type of refinance allows you to modify your loan terms – changing their type (e.g. fixed-rate to ARM) or altering the length (e.g. 30 years to 15 years).
Cash-out refinance: With this type of refinancing, you can convert home equity into cash. Cash-out refinances provide a loan larger than your current mortgage balance. Once the mortgage is paid off, you’ll have leftover money for other needs.
Current Nebraska Mortgage Rates
Historical data shows that mortgage rate trends in Nebraska tend to be higher than the national average. Below are the latest Nebraska mortgage and refinance rates.
We source this data from America’s major mortgage lenders and update it daily.
Today’s Mortgage Rates in Nebraska
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Your interest rate may vary depending on your financial situation. Keep in mind that our Nebraska interest rate data may change without prior notice.
If you’re looking for a more personalized mortgage rate, we have a mortgage rate tool at the top of this page. With some key financial details, we can calculate a custom Nebraska mortgage rate for you!
First-Time Homebuyer Programs In Nebraska
To assist new home buyers, the State of Nebraska offers several loan and down payment grant programs. To qualify for these programs offered by the Nebraska Investment Finance Authority (NIFA), you must fulfill these conditions:
Meet credit score requirements
Complete a mandatory homebuyer education course
Meet NIFA income limits
Buy a home valued within NIFA purchase price limits
Contribute at least $10,000 to the purchase
NIFA Homebuyer Assistance Program (HBA)
This state program offers low-rate loans and down payment assistance to first-time home buyers. If you qualify for this program, you can choose between a conventional, VA, FHA, or USDA loan.
NIFA First Home Program
The First Home Program offers a lower interest rate compared to the HBA. However, this program doesn’t come with any state-sponsored down payment or closing cost assistance.
NIFA First Home Grant
As long as your income is under 50% of the area median income, you can receive a $5,000 grant under the First Home program. This state-provided grant can be used to pay your down, closing cost, and lender fees without having to repay it.
Buying A Home In Nebraska
Knowing how to navigate a competitive housing market is one of the keys to getting your dream home. To help you through the process, we’ve compiled this home buying guide for you!
1. Get Pre-Approved
Before you start picking which homes to buy, you need to know your budget. One of the best ways to see how much you can afford is by getting a pre-approval.
When you apply for a mortgage, the lender will review your financial profile and determine how much you can take out on your loan. If you qualify for a mortgage, you’ll receive a pre-approval letter containing key details about your loan: your mortgage type, rate, and amount.
A pre-approval letter also demonstrates to sellers that you’re financially capable to purchase a home.
2. Find A Realtor
Local real estate agents are your greatest ally in your house hunt. Their experience in the local market means that they can answer any and all questions you have about the zip code, such as average property values.
Before you settle on a real estate agent, be sure to interview several to see which one works with you the best.
3. Research Home Listings
A good way to start a house hunt is to choose the neighborhood first. It’s a great idea to pick the most affordable house in the area that fits your needs – you can use any money you save for home improvements. Make sure that the house you’ve chosen doesn’t exceed your mortgage ceiling!
4. Make The Offer
Since you’ll be competing with other potential buyers, you may want to offer above the listed home price to catch the seller’s eye. Ask your real estate agent how much you should offer above the home value to avoid overpaying.
5. Perform Inspections
The seller accepting your offer isn’t the end of your journey. Before scheduling a closing date, make sure everything is on the up and up. Appraisals and inspections can help you pinpoint issues with the property and ensure you don’t overpay on the purchase.
6. Finalize The Purchase
Before closing day rolls around, be sure you have the money to pay your closing cost and lender fees. On the day itself, make sure to work out any unclear details with your realtor as you sign the paperwork.
When all the paperwork is cleared and closing costs are paid, it’s time to start your move!
How To Get A Better Mortgage Rate
Mortgages can stay with you for as long as 30 years. Since this is a long-term commitment, having the best interest rates can save you a lot of money.
Here are our top three tips to get the best Nebraska mortgage rates!
Pay A Larger Down Payment
Paying more down helps you in multiple ways. Lenders are more likely to give you lower interest rates, and you may be able to dodge PMI fees entirely by paying more than 20%. Larger down payments also reduce your loan balance, resulting in a smaller monthly payment amount.
Consider Buying Mortgage Points
Some lenders allow you to buy mortgage points. These points are usually worth 1% of the loan each and provide a 0.25% mortgage rate reduction. For example, if you buy 2 points on a $300,000 mortgage with a 4% rate, you’ll pay $6,000 to drive your rate down to 3.5%. If you can’t afford whole points, you can also buy half-points.
Because points are often expensive, they’re best used for long-term loans. Before buying points, it’s best to calculate how long it takes before your cost savings break even.
Work With A Mortgage Broker
An independent mortgage broker can help you find the best rates. With their experience, they can compare offers from various mortgage resources and search for the best-valued loans that you may otherwise not find. With them doing the legwork to find the best rates, you’ll have more time to hunt for homes.
Knowing the local mortgage rates can help you compete in the Nebraska housing market. By following our tips, you can also get the best rates on your home loan and save money in the long run.
Looking for the best-valued mortgages in Nebraska? Wesley LLC is here for you. Contact us today for a mortgage consultation!