Overview of Iowa Mortgages
If you decide to become a Hawkeye homeowner, know that mortgage rates have historically stuck closely to the national averages. That means Iowa monthly mortgage payments are generally more affordable than those in the rest of the country. Iowa counties’ conforming loan limits are unwaveringly standard, as every county is in line with the national average limits.
|30 year fixed||4.79%||4.79%||0.00|
|15 year fixed||4.31%||4.31%||0.00|
|30 yr fixed mtg refi||4.79%||4.79%||0.00|
|15 yr fixed mtg refi||4.31%||4.31%||0.00|
|7/1 ARM refi||4.58%||4.56%||+0.02|
|15 yr jumbo fixed mtg refi||4.39%||4.28%||+0.11|
National Mortgage Rates
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Iowa Mortgage Rates Quick Facts
Historical Mortgage Rates in Iowa
For the past decade or so, Iowa mortgage rates have mostly been coming in slightly lower than the national average. Rates for 2016 in Iowa are following that trend, coming in a bit lower than the average U.S. rates.
Iowa Historic Mortgage Rates
|Year||Iowa Rate||U.S. Rate|
Iowa Mortgages Overview
Midwestern real estate is often more affordable than coastal homes, and that’s the case in Iowa. The average single-family home sells for $156,875, which is well below the nation’s average of $229,737, according to Zillow. Property values vary throughout the state, but prices are lower than other states overall.
Iowa Mortgage Rates
|Percentage of Homes||94.40%|
|Average Property Value||$84,802.22|
|Percentage of Homes||3.50%|
|Average Property Value||$72,531.02|
|Percentage of Homes||0.60%|
|Average Property Value||$114,041.47|
|Percentage of Homes||1.50%|
|Average Property Value||$87,874.69|
Every county in the state has a standard conforming loan limit of $417,000 and FHA loan limit of $271,050, putting Iowa once again at an average rate in line with the rest of the country.
Conforming and FHA Loan Limits by County
|County||Conforming Limit||FHA Limit|
Iowa has required real estate disclosures, meaning the seller must disclose that basement flood or leaky roof. But regardless of the laws, it’s still best to opt for a home inspection before officially closing on your home. This will protect buyers from uncovering massive pitfalls after they’ve purchased the property.
Additionally, Iowa is one of a dozen or so states in the country that are “non-recourse,” which is good news for a worst-case scenario. If you buy a house in Iowa and it later goes into foreclosure, your house could be worth less than what you owe on your mortgage. In a “recourse” state, the lender could go after your assets to make up for that deficiency. But in a non-recourse state, you typically won’t be held liable to make up that difference.
30-Year Fixed Mortgage Rates in Iowa
Weighing your mortgage options in the Hawkeye State? You’ll probably want to consider a fixed-rate mortgage if you are planning on staying in your home for the long haul. 30-year fixed-rate mortgages are the most common type of home loan. With this mortgage you have a long time to pay back the loan (30 years) and your interest rate will remain steady throughout that time, unless you refinance. You also have the option of obtaining a 15-year fixed rate mortgage which comes with a lower interest rate, but the monthly payments for that will be higher.
The average Iowa mortgage rate for fixed-rate 30-year mortgages is 4.79%.
Iowa Jumbo Loan Rates
Iowa homes are less expensive than the average American home, so the “jumbo loan” limit holds steady at $417,000 in every Iowa county. If you need to take out a loan that exceeds that limit, it’s considered a jumbo loan and it will be accompanied by a higher interest rate. More money is at stake for lenders who issue these outsize loans and the higher rates reflect that increased risk.
The average jumbo loan rate in Iowa is 4.5%.
Iowa ARM Loan Rates
An adjustable-rate mortgage (ARM) could be a good option if you are looking to flip the house you buy or if it’s a starter home that you think you will move out of pretty quickly. The main attraction of an ARM is that it offers a lower initial interest rate for a fixed period of time between one and 10 years, depending on the loan’s terms. When that period ends, the rate can change and usually will go up. However, how often it goes up as well as a cap on how high it can get is laid out in the terms. Since you know from the get-go what the highest possible rate is, it is a smart idea to check that it’s something that you can afford if your plans were to suddenly change.
The average rate for an ARM in Iowa is 4.48%.
Iowa Mortgage Resources
If you need assistance buying a home in Iowa, here are some of the options that can help you at any step of the process.
The Iowa Finance Authority has a couple different options for homebuyers, both of which offer 30-year fixed-rate mortgages. First-time homebuyers can look into the FirstHome program, and first and repeat buyers can apply for the Homes for Iowans Program, which helps potential buyers afford a home in Iowa. There are “plus” versions of both of those programs as well, and that adds in a $2,500 grant for a down payment or closing costs.
The Neighborhood Finance Corporation also has several loan and grant opportunities for homeowners in certain lending areas. The NFC offers up to $10,000 in forgivable home improvement funds, up to $2,500 in closing cost assistance, no private mortgage insurance and a competitive fixed interest rate.
|Resource||Problem or Issue||Who Qualifies||Website|
|Iowa Finance Authority||Loan options for any eligible homebuyer, plus down payment assistance programs.||Homebuyers who meet income requirements.||http://www.iowafinanceauthority.gov/Public/Pages/PC77LN10|
|Neighborhood Finance Corporation||Offers up to $10,000 in forgivable home improvement funds, up to $2,500 in closing cost assistance, no private mortgage insurance and a competitive fixed interest rate.||Eligible homebuyers seeking homes in designated lending areas.||http://www.neighborhoodfinance.org/|
|USDA Rural Development - Single family loans||Offers payment assistance to increase an applicant’s repayment ability.||Applicants must be without decent, safe and sanitary housing; Be unable to obtain a loan from other resources on terms and conditions that can reasonably be expected to meet; Agree to occupy the property as your primary residence; Have the legal capacity to incur a loan obligation; Meet citizenship or eligible noncitizen requirements; and Not be suspended or debarred from participation in federal programs.||http://www.rd.usda.gov/programs-services/all-programs/single-family-housing-programs|
|Home Affordable Refinance Program||Refinancing.||Single family homes and condos that fit within lending loan limits.||http://www.harp.gov/|
The United States Department of Agriculture Rural Development program also offers loan help and mortgage grants throughout the country. The program aims to help develop more rural areas of a state while offering safe, affordable housing for residents. Iowa has grants and loans available for home repairs as well as loan assistance programs for those who qualify.
Iowa Mortgage Taxes
Homeowners are allowed to deduct the mortgage interest they pay when they file their federal income taxes (up to $1,000,000), and this applies for Iowa state income taxes as well. You can double your deductions for the qualifying mortgage interest payments you have made in the tax year by including it on both state and federal filings.
Also keep in mind that Iowa charges taxes on real estate property title transfers. The state real estate transfer tax for Iowa is $0.80/$500 and 0.16%. Discuss this tax with your lawyer or accountant before buying. In Iowa transactions, the seller typically pays this fee.
Iowa Mortgage Refinance
Refinancing can help cut thousands of dollars off your overall mortgage. Iowans hoping to refinance have options, and one of those is the Home Affordable Refinance Program of Iowa. This program accepts single family homes and condos for refinance assistance. It can also grant eligible homeowners access to interest and principal payment reductions and low closing costs.
The Neighborhood Finance Corporation also offers a refinance program in its NFC lending areas.
You also always have the option of returning to the lender who issued your current mortgage and comparing the rates with other lenders, in order to land on a new plan that is the best fit for your current situation.
Best Places To Get A Mortgage
SmartAsset’s interactive mortgage map highlights the best counties in the country (and in each state) for securing a mortgage. Hover over counties and states to see data points for each region, or use the map’s tabs to view the top counties for each of the factors driving our analysis.
Methodology For many people buying a house means securing a mortgage. To determine the best places in the country to get a mortgage we looked at four factors: overall borrowing costs, ease of securing a mortgage, cheap property taxes and cheap annual mortgage payments.
To calculate the overall borrowing costs, we looked at the expected costs over the first five years of a $200,000 mortgage with a 20% down payment, including closing costs. We calculated the ease of getting a mortgage as the ratio of mortgage applications to actual mortgage originations (secured mortgages) in each county. We based annual mortgage payments on the annual principal and interest payments for a $200,000 loan in that location, using average mortgage rates in each county.
Finally, we ranked locations based on these four factors, and then averaged those rankings, giving equal weight to each factor. The areas with the lowest average rankings are the best places to get a mortgage.
Sources: Mortgage Bankers Association, US Census Bureau 2016 5-Year American Community Survey, Informa, Bankrate, government websites, SmartAsset