Mortgage in Montana
Known by its nickname "Big Sky Country," Montana offers a lifestyle that's unlike any other state. There's a significant amount of land in Montana, and the cities are friendly, family-oriented, and enjoyable. Montana also has a robust economy that tends to be more resistant to downturns than some other markets. Housing costs in Montana varies dramatically depending on the location. You can expect to pay between $300,000 and $400,000 for an average home in bigger cities. In smaller places, $200k might be enough. Regardless, you can use this Montana mortgage calculator to see your monthly payment on a home in this state.
Montana Mortgage Calculator: Your Options
Most Montanans, both current and prospective, will have one of three types of mortgages.
- Montana conventional mortgage: Since much of Montana's real estate is relatively inexpensive, most people can get a conforming loan backed by Freddie Mac or Fannie Mae. These loans require a minimum credit score of 620, a debt-to-income ratio below 50%, and a minimum down payment of 3% (but more is much better!).
- Montana FHA mortgage: FHA mortgages are loans backed by the Federal Housing Administration. These loans typically have a minimum down payment of 3.5% and require a minimum credit score of 580. However, if you have 10% down, you can get away with a credit score of just 500.
- Montana VA mortgage: If you have served in the military, you can get a loan backed by the Veterans Administration. These mortgages have no down payment requirement and have no private mortgage insurance. However, you will need a credit score of 660 to qualify!
If you're thinking of moving to Montana, the housing costs are relatively affordable, but you'll still likely need a down payment. Fortunately, there are state programs to help with that!
First-Time Homebuyers in Montana
Montana Housing offers four main programs for people looking to become homeowners in the state.
This program offers a 30-year, low-interest rate loan for most home types (single-family, condos, etc.).
Eligibility Criteria: Most recipients will need to complete an educational course. Purchase price and income limitations also apply.
80% Combined is an alternative to FHA loans. It involves two parts: a 30-year mortgage with an 80% loan-to-value and a second loan at 20% loan-to-value. Non-profit partners offer the second loan. Since the primary loan is at 80% LTV, there's no mortgage insurance required.
Eligibility Criteria: Income and purchase price limitations apply.
Down Payment Assistance Program
There are two programs offered to help with a down payment. The Bond Advantage program provides up to 5% of the sales price to a maximum of $10,000. This loan is for 15 years and has low monthly payments. By contrast, the MBOH Plus program offers a 0% second loan for 5% of the sales price up to a maximum of $6,500. The full amount comes due upon the termination of the first mortgage.
Eligibility Criteria: Income and purchase price limitations apply. Borrowers must have a debt-to-income ratio below 43%, and they must also have a minimum credit score of 620.
The mortgage credit certificate provides a non-refundable tax credit for 20% of the annual mortgage interest you paid, up to a maximum of $2,000.
Eligibility Criteria: Purchase price and income limitations apply for this program.
Montana Mortgage Calculator: See If a Move Will Fit in Your Budget
Big Sky Country is a beautiful place to live for many reasons. If you're thinking of buying a home within Montana, use the Montana mortgage calculator to ensure that it fits within your budget before you move!