Overview of Montana Mortgages
Montana draws millions of visitors each year to sites like Glacier National Park and Big Sky Resort, which lucky residents have access to year-round. In terms of mortgage rates, Montana is usually at or below the national averages. Montana counties’ conforming loan limits hold steady at average, but there’s a bit more variation in the FHA loan limits.
National Mortgage Rates
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Montana Mortgage Rates Quick Facts
Historical Mortgage Rates in Montana
Montana – home to Glacier National Park, the Rocky Mountains and Going-to-the-Sun road. Known as Big Sky Country, Montana is the ideal settling spot for ranchers, adventurers and anyone looking to get a little closer to nature. It is one of the largest states in the country, but it’s also one of the least densely populated. Montana has room to roam, if you’re looking for wide open spaces.
Montana mortgage rates are generally just a little lower than the national average. So far, 2016 Montana mortgage rates are staying below the average.
Montana Historic Mortgage Rates
|Year||Montana Rate||U.S. Rate|
Montana Mortgages Overview
Montana real estate is average or just slightly more affordable when compared to other parts of the nation.
Montana Mortgage Rates
|Percentage of Homes||93.90%|
|Average Property Value||$168,721.64|
|Percentage of Homes||4.20%|
|Average Property Value||$162,298.25|
|Percentage of Homes||0.90%|
|Average Property Value||$246,565.11|
|Percentage of Homes||1.00%|
|Average Property Value||$120,707.13|
Every county in Montana has a standard conforming loan limit of $417,000, and most have a typical FHA limit of $271,050. The FHA limit does increase in some counties. Those counties are Fallon, Flathead, Gallatin, Jefferson, Lewis and Clark, Madison, Missoula and Sweet Grass, and their FHA limits vary from $282,900 to $346,150. Those numbers mean that Montana is at an average level for its home prices compared to the rest of the country.
Conforming and FHA Loan Limits by County
|County||Conforming Limit||FHA Limit|
|Lewis and Clark||$417,000||$286,350|
Montana is what is known as a “non-recourse” state. This means that if your home were to go into foreclosure and is worth less than the amount still owed on your mortgage, your lender is not allowed to come after your assets for the difference in those amounts.
Montana also lacks disclosure laws for sellers – it is known as a “caveat emptor,” or “buyer beware” state. Typically, home sellers have to fill out a form disclosing their knowledge of any issues with the house to the buyer. Because those laws are more lax in Montana, a home inspection is absolutely critical to the integrity of the sale. A quality home inspection will help you attend your closing with ease, knowing you’re not about to move into a major money pit. A note for sellers - Even if you’re not required to disclose defects about the house, many realtors require some kind of disclosure, and it may be better in the long run to be forthcoming about the condition of your property.
30-Year Fixed Mortgage Rates in Montana
Are you looking to become a homeowner in the Treasure State? The first home loan that you need to know about is a 30-year fixed-rate mortgage. If you intend to stay in your new home for the long run, a 30-year fixed-rate mortgage will probably be the best option for you. The interest rate on this type of mortgage remains the same for the entirety of the loan. This allows you to budget more easily for your home payments. You will have three decades to pay off the mortgage, unless you’ve made prepayments or you decide to refinance.
The average Montana mortgage rate for fixed-rate 30-year mortgages is 4.5%.
Montana Jumbo Loan Rates
Conforming loan limits stick to the average $417,000 level in every Montana county because most homes in the state fit within that range. Because of that, there are fewer “jumbo loan” mortgages here. A jumbo loan is one that exceeds the conforming loan amount in a certain area. So for anywhere in Montana, that would be a home loan that’s bigger than $417,000. It’s worth noting that jumbo loans have higher interest rates, so you may prefer to go with a home that fits more comfortably within your budget.
The average jumbo loan rate in Montana is 4.55%.
Montana ARM Loan Rates
Another home loan that you should be aware of is an adjustable-rate mortgage (ARM). This loan typically comes with a lower initial interest rate than a fixed-rate mortgage. That introductory rate is offered for a period between one and 10 years. At the end of that time, the interest rate may go up or down – but it will likely increase. The most important thing to keep in mind when deciding if an ARM is the right choice for you is that the loan’s terms will specify how many times the rate can change and also will put a cap on how high it can reach. It is important to carefully assess the highest possible interest rate listed in the terms to determine if it’s one that you can afford.
The average rate for an ARM in Montana is 5.17%.
Montana Mortgage Resources
For homebuyers looking for their own piece of Big Sky Country, there are resources out there to help you in your mortgage process.
The Montana Board of Housing is a comprehensive resource for homebuyers looking for assistance. Some of the programs they offer include:
- Down Payment Assistance - The Montana Board of Housing partners with cities, counties, lenders, non-profits and others to help eligible homebuyers afford homeownership. Applicants can receive anywhere from $1,500 to $40,000 depending on location, need and program limits.
- 80% Combined Program - This program provides qualified homebuyers with FHA loan alternatives if they are not eligible for RD-guaranteed loans. This program allows MBOH to provide loans at 80% or less loan-to-value to eliminate mortgage insurance.
- Homebuyer education and counseling - Montana Homeownership Network members offer homebuying courses. Topics covered include budgeting and credit, financing a home, selecting a home, assessing homebuying readiness and maintaining a home and finances.
NeighborWorks Montana offers down payment and closing cost assistance for eligible applicants. Loans are available for families and individuals whose income is at or below 80% of the county’s median income. Loans are provided at no interest for 15 years or until the borrower leaves or refinances the home.
|Resource||Problem or Issue||Who Qualifies||Website|
|Neighborworks Montana||Down payment and closing cost assistance.||Loans are available to households with income at or below 80% of the county median income, based on family size. Borrowers must be first-time homebuyers, a single parent with dependent children in the household or a household with a disabled individual.||http://www.nwmt.org/Homeowner/home-financing|
|Montana Board of Housing||Offers home education programs, down payment assistance and mortgage insurance elimination.||Variety of programs are suitable for most homebuyers who need housing assistance.||http://housing.mt.gov/HBProgList|
|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; 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 offers a program to help residents in rural Montana areas secure affordable housing. Check at the start of your home search to see if you qualify for the USDA rural development offers. The program offers loans and grants for people in the market for a home, as well as those who need to repair their current abode.
Montana Mortgage Taxes
Montana does not charge a transfer tax on real estate, so you won’t need to worry about that fee.
Homeowners who itemize deductions when filing their federal taxes, can deduct the mortgage interest they pay throughout the year from their taxable income. Since Montana follows federal itemized deductions rules closely, you can also take the mortgage interest deduction on your state income taxes.
Montana Mortgage Refinance
Have you decided it’s time to refinance your home? It’s important to remember that you are under no obligation to work with the lender who issued your original loan. You are free to look around and compare rates from other lenders to find something that fits what you’re looking for.
Another option for Montana homeowners who want to refinance is the Home Affordable Refinance Program of Montana. Qualified owners will have access to interest and principal payment reductions and low closing costs.
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