If you’re looking to purchase your forever home in a state with a great economy, low crime rates, and plenty of things to do, look no further than Utah. Ranked first in the nation for economic health and employment, Utah offers the promise of financial security.

Utah is also known as the “adventure sports capital of the U.S.” so there’s no shortage of hiking, climbing, or skiing to keep you active.

If you’re planning a move to Utah, it’s best to know a little bit about the real estate market before you start the home-buying process. And moving to a new state can also present some unique challenges to keep in mind while you’re in the market for a house.

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has you covered whether this is your first time buying a home or if you just need a refresher. We’ll take you through the home-buying process, paying particular attention to the specifics of the Utah housing market.

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Figure out your finances

Before you start scrolling through those housing listings, you need to have a good handle on your finances. Knowing your credit score and figuring up how much debt you have can help you set a budget for buying your new house.

There are also a lot of fees that come up when you buy a house, so planning for those in advance and factoring them into your house-buying budget can help you make wiser financial decisions.

Check your credit score

If you plan to finance your new house with a conventional mortgage, the first thing you need to do is check your credit score. Lenders will use your credit score to determine how much of a risk they’re taking by offering you a loan.

In Utah, most lenders look for a credit score of 620 or above. If your credit score is higher than 620, it might be easier for you to get approved for loans and help you get better interest rates.

If your credit score is below 620, you still have options. Here are some ways you can work around your credit score.

Take some time to build your credit score to help you qualify for loans or better interest rates.

Veterans and active service members can qualify for a Veterans Administration (VA) loan with a credit score of 500 or above.

The Federal Housing Administration (FHA) offers loans for those with a credit score of 523 or higher.

Calculate your debt-to-income (DTI) ratio

Once you know your credit score, you need to figure out your debt-to-income ratio, or DTI. This is all of your monthly debt payments divided by your pre-tax income. Knowing your DTI will help you figure out how much you can reasonably afford to pay for a mortgage every month.

Some payments you need to include in your DTI are:

Rent or house payments

Car payments

Credit card payments

Student loan payments

Alimony or child support

It might be hard to qualify for a mortgage in Utah if your DTI is above 50%. A mortgage payment could also prove to be a financial burden.

Have a goal to get your DTI below 36%. Paying off debt will help you secure a mortgage, and will even help you raise your credit score.

Determine your down payment

Lenders usually require a down payment of 20% when taking out a conventional mortgage. When you’re figuring out your house budget, be sure to include the down payment. If you can’t afford to pay 20%, you do have some options.

The Federal Housing Administration (FHA) and Veterans Administration (VA) offer loans with lower down payments.

See if you qualify for either option:

FHA loan: Usually for first-time homebuyers from low or middle-income households. Depending on credit score, these loans require down payments as low as 3.5%.

VA home loan: These loans require no down payment and are for current service members, veterans, or surviving spouses.

Prepare for closing costs and other fees

Closing costs are other out-of-pocket fees you need to prepare for when calculating your budget.

Typically, closing costs are 2-5% of the home’s total value. The median listing price in Utah is around $370,000 - meaning closing costs could be anywhere from $7,400 to $18,500.

So what exactly are you paying for with closing costs? Generally, closing fees include:

Home appraisal fee

Credit report fee

Home inspection fee

Mortgage origination fee

Earnest money

Mortgage insurance

Property taxes

Homeowners insurance

Comparing rates for homeowner’s insurance can help save money on closing costs.

You can also find out which areas of Utah have lower property tax rates and try to buy a house in those counties. Utah has the eleventh lowest property tax rate in the nation, but rates can still vary widely between counties.

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How to choose the best homeowner’s insurance

Key Takeaway Be prepared to have 2-5% of your new home’s value on hand to pay for closing costs and a 20% down payment.

Look for homeowners insurance

After purchasing your new house, you’ll have a monthly mortgage payment along with a homeowner’s insurance payment. The amount you pay for insurance will depend on where you live, but the national average is around $115 per month.

Wildfires, floods, and severe winter storms are all common in Utah. This could cause home insurance premiums to be a little higher than average. It’s also important to make sure that any policy you choose includes coverage for these natural disaster risks.

Shopping around for homeowners insurance coverage is the best way to ensure you’re getting the best deal. Generally, you want to compare rates from at least three companies. The best place to start is with your current car insurance company.

Bundling your car and home insurance policies with the same company can help you qualify for discounts on your premiums. But to make sure you’re getting the most affordable coverage, compare rates using licensed broker app

Jerry

MORE: How to decipher home insurance quotes

Key Takeaway Comparing rates on home insurance can help you save money.

Get preapproved for a mortgage

Once you’ve calculated your house-buying budget, it’s time to get pre-qualified for a mortgage. It’s important to get pre-qualified only when you’re ready to begin looking at houses. Starting the pre-approval process before your finances are in order can actually damage your credit score, and hurt your chances of getting a loan.

Here’s the process of getting preapproved for a mortgage:

Shop around for a mortgage lender

Send them your Social Security number along with banking information

Fill out the lender’s mortgage application

Keep in mind, your lender will use the above information to check your finances and do a credit check. Once you’ve been pre-approved, you can begin looking at potential properties.

How to pick the right mortgage in Nevada

When choosing the best mortgage for you, it’s important to look at the mortgage term and interest rate.

Short-term mortgages are generally 15 years. These loans have higher monthly payments, but lower interest rates.

Longer-term mortgages are typically 30 years. While the monthly payments on a 30-year mortgage are lower, they tend to have higher interest rates.

Choose a mortgage that is the best fit for your monthly budget as well as your long-term goals. Paying off your mortgage sooner might sound attractive, but not if the higher payments put a strain on your finances.

Look for a house

Once you’re pre-qualified for a loan, you can take your carefully planned budget and start searching for your dream home.

Pick your city or neighborhood

Utah has a wide range of things to offer, so find an area that best suits your lifestyle and interests.

If you’re an outdoor enthusiast, Utah has everything from mountains for skiing and deserts for stargazing. Northern Utah offers places like American Fork Canyon, Thanksgiving Point, and

Salt Lake City

while Southern Utah boasts Bryce Canyon and Zion National Park.

Utah is also a great place for families, with some of the safest-ranked cities in the U.S. and plenty of top-ranked K-12 schools and colleges. For example,

Provo

, the third-largest city in Utah, is the home of Brigham Young University. The city has lots of ongoing community events and is ranked one of the safest cities in the entire nation.

An important thing to remember about Utah is that its population isn’t as diverse as other states. At least 60% of the state population identifies as Mormon, with that number increasing to 80% in the southern part of the state. If you’d prefer more diverse areas, stick to the northern part of the state.

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Utah car insurance

Buyer’s market vs. seller’s market

Typically the housing market fluctuates between a buyer’s market or a seller’s market. It’s important to know which type of market you’re dealing with when you’re buying a house.

In a buyer’s market, there is a large supply of houses looking for potential buyers. If you’re buying in this kind of market, prices should be lower and you have more power to bargain.

A seller’s market is the opposite. Property is scarce and prices are higher as a result. Bidding for property can get pretty competitive and houses can sell quickly.

Check recent home sales in the area you’re looking to move to. If houses are selling for much more than the listing price, chances are it’s currently a seller’s market.

If houses are selling after only a few months (or sometimes weeks) on the market, that’s another indication of a seller’s market.

The Utah housing market is currently a seller’s market. Utah is second in the nation for housing price increases, with prices jumping over 28%. Current buyers are competing over rapidly disappearing property and cash-buyers moving in from more expensive states like California.

Housing markets change frequently, so keep an eye on prices and interest rates when you start your search. You can always wait for the market to shift before buying a home.

Find a real estate agent

Since the market in Utah is so competitive, it might be smart to hire a real estate agent to help you through the process.

If you’ve already chosen an area of Utah you’d like to move to, try finding an agent based in that area. They’ll likely know the surrounding communities and the trends in the market. Make sure you pick an agent that will listen to your housing wants and needs and is prompt to communicate with you.

Make an offer

Once you’ve found a house you like, your agent can make the seller an offer on your behalf. They can also help you fill out any necessary paperwork. Once an offer has been accepted, you’re almost ready to move!

MORE:

Utah car insurance laws

How to save on homeowners insurance

Once you’ve purchased your new Utah home, make sure you’ve got the best homeowners insurance to protect your investment.

Finding coverage that’s right for you (and at a price you can afford) doesn’t have to be a drawn-out process. With licensed broker

Jerry

, you can compare policies from over 50 top insurance companies to get the best rate on car insurance. Once you’ve saved money on your car insurance, you can bundle your home and auto policies for extra savings.

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FAQs

How much money do I need to buy a house in Utah?

The average cost of a house in Nevada is $370,000. With a 20% down payment and 5% of the home’s value for closing costs, you’ll need to pay around $92,500 out of pocket.

What credit score is needed to buy a house in Utah?

Most lenders in Utah will look for a credit score of at least 620 to offer a loan for a house. If your credit score is lower than 620, you might qualify for an FHA or VA loan.

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