What You Need to Know about FHA Mortgages

In March 2023, the Federal Housing Administration (FHA) instituted a 30 basis point reduction to the mortgage insurance premiums (MIP) charged to homebuyers who will obtain an FHA-insured mortgage with a 3.5% down payment. This could mean savings in the thousands to many first-time homebuyers. So what is an FHA loan and how do they work? Let’s take a look.

What is an FHA Mortgage?

FHA stands for Federal Housing Administration. An FHA loan is a mortgage that is backed by the government, specifically the Federal Housing Administration. They are especially popular among first-time homebuyers because they often require lower down payments and lower minimum credit scores to qualify. You do not, however, need to be buying your first home to qualify for this type of loan. Due to the greater convenience and availability for homeowners to obtain an FHA mortgage, interest rates may be a bit higher than conventional loans.

How Does an FHA Mortgage Work?

An FHA mortgage can be obtained for those interested in purchasing a multitude of properties including single family homes and multifamily properties. The government insures these loans, but they are underwritten by third-party lenders already approved by the FHA. The homebuyer has the choice of a 15 or 30-year term loan with a fixed or adjustable interest rate. 

One thing to keep in mind is that every borrower must also pay FHA mortgage insurance. This insurance protects the lender from loss if the borrower defaults on the loan. Most mortgage loans require mortgage insurance if the borrower’s down payment on the home is less than 20%. There are two premiums the borrower must pay:

  • Upfront Mortgage Insurance Premium. This is a small percentage of the loan amount that can be rolled out over the term of the loan.
  • Annual Mortgage Insurance Premiums. Factors to determine this amount are whether the loan is a 15 or 30 year term loan and the LTV (loan to value ratio). This premium is divided by 12 and paid monthly.

Borrowers who finance 90% or less of the property’s value will often see their mortgage insurance premiums cancelled after 11 years if they stay current on their monthly mortgage payments.

Closing costs are limited to 3-5% of the loan amount. The FHA does allow up to 6% of the home buyer’s closing costs to be covered by lenders, sellers, and builders. 

Benefits & Considerations

If you believe that an FHA mortgage might be a good fit for you, start now by saving for your down payment and researching potential lenders.

Benefits

  • As long as you meet FHA requirements, the FHA does permit you to get down payment assistance and financial gifts. There are many conventional loans that don’t allow for this.
  • It’s possible to obtain an FHA loan even with a down payment as low as 3.5%, as long as your credit score is 600 or so minimum.
  • On occasion, the FHA does permit individuals with credit scores as low as 500 to obtain a loan. This can be particularly helpful if your credit history is weak.
  • FHA allows sellers to pay up to 6% of the closing costs. Many conventional lenders put a cap of 3% on the seller’s contribution. 

 Considerations

  • The FHA has loan limits on how much you can borrow. This is established by the median home prices in the metro area and surrounding counties. Because home costs are always changing, these loan limits change as well. 
  • If you have good credit, there are other options to consider even if you don’t have a lot of money for a down payment on the home. FHA mortgage premiums may be higher in some instances than private mortgage insurance, which you will still be required to pay if you don’t put down 20%. 
  • Even though the mortgage insurance premiums can be rolled out into your loan, they can still be a bit costly.

Requirements and Qualifications

You must meet some requirements to qualify for an FHA loan including:

  • Minimum credit score. The lower your credit score the more you will need for a down payment. Generally, a 580 score will require a down payment of 3.5%. A score of 500 may require 10%.
  • Debt to income ratio. The total of your monthly debts cannot be more than 43% of your gross income. 
  • Your potential lender will look very closely at your income, credit and the value of the home you want to purchase.
  • You must plan to buy a home with between one and four units while also planning to use it as your primary residence.

Keep in mind that there are alternatives to FHA mortgages including a USDA loan, conventional loan and VA loan, each with their own set of standards and qualifications. Overall, FHA mortgages are a great way for many people to be able to purchase a home. The standards to qualify are not terribly high, and they are forgiving for people who might not have stellar credit histories. 

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10 Tips to Find Your Best Mortgage Rate

Whether you are moving to Montana and buying your first home or have gone through the process half a dozen times before, the journey toward buying a home is always different. A few years ago, it was relatively easy for most to secure a modest mortgage rate. Now, with rates changing and edging higher, there are still ways to secure the very best one you possibly can.

  1. Keep an Eye on Your Credit Score. One of the first documents your lender will look at is your credit score. Obtain a copy of your credit report and review it carefully so you can point out any errors (yes, it does happen) and also so you can know exactly what outstanding balances need to be reined in.
  2. Save for a Larger Down Payment. The rule of thumb for a down payment on a home is to have 20%. However, a 20% down payment is only necessary if you don’t want to take on the mortgage insurance requirement. Your down payment will depend on the type of loan you are getting, and for a conventional loan you will be required to put down 3%. VA loans and USDA loans require no down payment if you are eligible for them.
  3. Pay off Your Debt. One thing lenders look at is your debt-to-income ratio. If you are carrying a heavy load of debt in comparison to your income, you will be looked at as risky when it comes to financing a home. It might be difficult to determine if you should pay down debt or use that money to save for your down payment. Choosing to pay down high interest credit cards will help put you in a low DTI ratio which is more attractive to lenders.
  4. Decide Between Fixed & Adjusted. Choosing between a fixed rate mortgage and an adjustable rate mortgage has a big impact on how much you will pay over the life of the loan. A fixed rate offers the peace of mind of knowing exactly what your payment will be month to month. An adjustable rate allows for dips – but also peaks – in the market. ARM’s typically remain fixed for a number of years before they are subject to market fluctuations.
  5. Work to Actively Improve Your Credit Score. Since lenders use your credit score as a litmus test toward how well you will handle your future payments and debts, it’s important to work proactively and improve that number. By making timely payments on your credit cards, your home, your car, etc., your credit score should improve.
  6. Opt for a Shorter Term Loan. When all is said and done and that final mortgage payment has been paid, the borrower will have paid a considerable amount of money over the actual purchase price. Shortening the term of the loan will help you secure a lower interest rate and it will help to pay off your home in Montana more quickly, by more rapidly building equity.
  7. Raise Your Income. While you are whittling down your debts to improve your debt-to-income ratio, you can also attack the process from the other side. Focus on how you can maximize your income. Perhaps it’s asking for a raise at work, taking on a side gig or starting your search for a higher paying job. 
  8. Increase Your Down Payment. When you significantly lower your LTV (loan-to-value ratio) you are seen by lenders as a good risk and may then obtain a more favorable mortgage rate. The more you put down on your home, the less the lender will need to give you. Keep in mind that you don’t want to spend your last dime on your down payment; it’s wise to have a 3-month cushion to cover unforeseen expenses.
  9. Prepay Mortgage Points. Also called discount points, when you’re able to pay 1% of the loan amount, it is considered one point. You can also purchase these points in increments down to .125 points. When you pay these in advance, you lower your interest rate. If you plan to stay in your home long enough to break even, it’s a great way to save money.
  10. Bide Your Time. The idea of moving to Montana and into your dream home will require patience and planning. So, when you let yourself sit back and watch the market, you will be in a better position to find the lowest interest rates available and get the most bang for your buck.
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A Comprehensive Guide to 1031 Exchanges

Are you interested in reinvesting your capital gains tax instead of paying it out? A 1031 exchange may work for you.

Put simply, a 1031 tax exchange allows for the investor to defer capital gains tax, which then results in more capital to invest in a substitution property. Normally, when an investor sells a property they must pay a portion of the sale in capital gains – both federal and state taxes. A 1031 exchange allows the investor to waive capital gains (for now) and instead invest in a replacement property.

Not only does this let real estate investors defer capital gains tax while buying and selling property, it also gives them access to exciting new investment strategies.

The IRS code dictates that the exchange must be done with “like-kind” properties, there are strict timelines to adhere to, and there must be a qualified intermediary involved in the transaction.

Investors looking for homes in Montana to lease out will find a number of attractive, newly built homes in the Belgrade area that will qualify as replacement properties to take financial advantage of the 1031 exchange. 

Why is it Called a 1031 Exchange?

Within Section 1031 of the IRS Code, you’ll find the essentials necessary for a successful property exchange. This exchange is recognized by the IRS as a means of deferring capital gain taxes.

Properties Eligible for 1031 Exchange

Not every property is eligible for this type of exchange; however, a number of properties are which means investors have more purchasing power than they may realize.

  • Single-family rental homes
  • Multifamily rental homes
  • Motels & hotels
  • Raw land
  • Offices & commercial properties
  • Farms & Ranches
  • Leasehold interests of 30+ years
  • Rental ski condo for a 3-unit apartment building

There are other eligible properties and to get more information, contact your tax advisor if you are interested in this type of exchange.

What Exactly Is a “Like Kind” Property?

Although this term is not specifically defined in the IRS tax code, professionals do have a definition for it. Any kind of real property that is held for productive use as in an investment, business, or trade may be considered like-kind property.

The kinds of property that can be exchanged in a 1031 transaction are very broad. For example, a single-family rental property may be exchanged for a duplex (or more), a shopping center, raw land, or even an office for apartments.

Any property that’s been relinquished that was held in investment will be in like kind with property with the intent to be held in investment.

Properties Not Eligible for 1031 Exchange

The main idea behind what might be eligible for a 1031 exchange and what isn’t, is the intent to which you purchased the property, and your intent for the exchanged property. Both sides of the equation must be that they are held in investment, so personal residences and partnership interests do not apply.

  • Real estate investment trusts (REITs)
  • Stocks, notes, or bonds
  • Personal residences
  • Flips for resale (though there is a possible way around this – if you flip and then rent for a period of time, it may be eligible after a certain time period, likely a year, for the 1031 exchange, check with your tax advisor).
  • New Construction

Tax Benefits with a 1031 Exchange

Reset Depreciation

The IRS allows owners of real estate to depreciate their assets. After 27.5 years, investments may be depreciated due to deteriorating conditions over time. After reinvestment is made into a new property, the depreciation schedule is reset.

Fewer Taxes

Investors can reduce the taxes they pay by exchanging property in a state that imposes income taxes with an investment opportunity in a state that does not have an income tax. Some states that do not have income tax include Nevada, Texas, Florida, Wyoming, and Alaska.

Deferred Capital Gains

This benefit is one of the primary reasons investors make a 1031 exchange. It allows the deferring of the capital gains tax upon the selling of a property until they cash out. There are no limits on how often this can be done, and for many investors, it’s a lucrative way to continually leverage their financial position.

Important 1031 Exchange Vocabulary

Relinquished Property refers to the property that the investor will be selling. It must be an investment or business property and not a vacation home or primary residence.

Replacement Property refers to the property that is to replace the relinquished property. It must be of equal or greater value and “like kind” to the relinquished property.

A qualified Intermediary refers to the person or the company that holds the real estate sale proceeds and subsequently facilitates the exchange. This person or company holds the exchange funds because IRS tax law dictates the seller of the property cannot or the funds will be subject to tax liability. The qualified intermediary can’t have any other formal relationship with the seller and must be a licensed professional. Overall, a 1031 exchange lets the investor reinvest the money that would normally be paid out to capital gains tax and put it into a replacement property.

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How to Buy a House in Bozeman Montana

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The Festival of Lights & Annual Christmas Convoy in Belgrade, MT

If you ever thought to yourself that Christmas should be celebrated all month long, guess what, you are not alone. The folks in Belgrade, Montana keep December near and dear to their hearts not only for the revered holidays but also to kick off their Annual Christmas Convoy/Festival of Lights. Here, family, tradition, and the warm and joyous essence of illumination are fully embraced and highly anticipated.

In past years, there have been a number of fun family activities surrounding the festival of lights that have garnered much enthusiasm. It has become a festive occasion that draws the attention of all of Montana. In fact, living at the gorgeous Prescott Ranch in Belgrade gives you access to this wondrous festival of lights and is merely one aspect of the incredible sense of community that is fostered all year round.

Stroll through the Holiday Light Park

The Festival of Lights kicks off with a breathtaking winter wonderland situated by the walking path at the Belgrade Senior Center. Sparkling lights twinkle every evening in December from the time the sun goes down to about 11 pm. The Memorial Light Tunnels are also decked out in glittering lights and you’re likely to run into some inflatable characters from everyone’s favorite Christmas movies including the Misfit Toys, Rudolf and Clarice, and Frosty the Snowman. It’s a dazzling display for the young and the young-at-heart alike!

Sit Back, Relax & Get Captivated by the Christmas Convoy

Whoever said trucks can’t be beautiful, never caught a glimpse of the Belgrade, Montana Christmas Convoy! What can you expect to see? Logging trucks, semis, dump trucks, garbage trucks, and other types of trucks – over 75, in fact – all lit up and parading over a 7-mile long route. There is a convoy map so those watching the convoy can make sure they get to see it up close and personal. The Christmas Convoy takes place in December, and professional drivers are welcome to join in on the fun.

There may even be an opportunity to get to meet the drivers, grab a quick bite to eat at one of the many food trucks, and purchase a holiday gift at Truck Village at the Gallatin Speedway. Get prepared to be thrilled by fireworks, too.

Join in on the Belgrade Jingle Jog 5K

The Belgrade Jingle Jog 5K is open to everyone whether you would like to run, walk, skip or stroll along the route. Festive holiday attire isn’t required but it is highly encouraged! Entrants into the 5K are automatically signed up for the GET UGLY Christmas Outfit contest which takes place directly after the race.

So, grab your winter gear, and your ugly holiday sweater, and get ready to have fun with friends, family, and neighbors this holiday season. With several events taking place during the month of December, the Belgrade Annual Christmas Convoy / Festival of Lights is proudly sponsored by the Belgrade Community Coalition and intended for all residents and visitors to enjoy.

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What Is It Like To Live In Belgrade Montana?

To live in Belgrade Montana is to live with intention. From fly fishing along the many miles of scenic waterways to skiing the slopes, Belgrade, Montana truly has it all. It provides a more affordable and less populated alternative to the county seat, Bozeman which is a mere 15-minute drive away.

What Makes Belgrade A Nice Place to Live?

At the foothill of the Rocky Mountains, visitors, and residents of Belgrade are greeted every day by spectacular scenery. Those who adore nature and wildlife have much in store for them here. With a variety of outdoor activities, cultural events, and an abundance of conveniences, Belgrade spoils residents with its ‘hidden gem’ status.

Community-oriented neighborhoods such as Prescott Ranch in Belgrade make it easy to live a life of luxury, stability, and security, smack dab in a landscape that never fails to awe and inspire.

What is Belgrade, Montana Named After?

Thomas B. Quaw, an entrepreneur, located the land that is now Belgrade in 1882 and took a great liking to the area. He named it after the capital of Serbia in part to show his appreciation for the Serbian investors who financed part of the Northern Pacific Railroad.

Downtown Belgrade

This charming city prides itself in being home to a multitude of locally owned shops and businesses. A lively town of 10,000 people, downtown Belgrade offers many opportunities for antiquing, dining, and shopping. There’s a quaint, rustic atmosphere that runs through the city via a welcoming community who are loyal to their small town and to preserving its delightful character.

Eateries


Don’t let the small-town vibe fool you, though! There are restaurants to cater to every taste with a variety of cuisine from burgers and pizza to the more exotic, you’ll find culinary experiences like Cugino’s Pizzeria, The Local American Saloon, and The Wok. Stop in at the Madison River Brewery for a refreshing beverage and a chat with the locals.

Shopping

You might expect a town like Belgrade, Montana to have a few stores dedicated to outdoor adventure and you would be right. There are also shops to be explored that concentrate on art, gifts, and rustic furniture to help you bring the feel of the Big Sky indoors, leather shops such as RO Brooks Custom Leather, and places to discover antiques like Brass Monkey the Sandman. The shopper in you will never be disappointed.

Outdoor Activities

Celebrating every season, there are a number of outdoor activities to be enjoyed including picnicking at the Lewis and Clark Park, catching the parade at the Belgrade Fall Festival, or simply strolling through downtown to people-watch.

Prescott Ranch in Belgrade is also home to five neighborhood parks. Residents love having these amazing outdoor features where the kids can run and play. Whether it’s a soccer game or building snowmen, the parks are a place where neighbors can congregate for fun and community. 

For those who enjoy celebrating the December holidays, a month-long community celebration brings you the Festival of Lights which includes the exciting Christmas Convoy and the Truck Village at the Gallatin Speedway.

A Cheerful Community

Belgrade, Montana is fully committed to fostering a sense of well-being and togetherness among its residents to create a cheerful community. The Belgrade Community Library is home to a number of family-oriented events, clubs, and presentations designed for both entertainment and education.

With one high school, three middle schools, seven elementary schools, and ten preschools, the Belgrade School District ranks among the highest-rated public schools in Montana.  The high school boasts the largest sporting facility in the state, making it a popular host for various state, regional, and district sporting events.

What is Belgrade, Montana Best Known For?

A family watching the sunset and laying in the snow on a vacation in Belgrade, Montana.

A mere 10 miles away from Bozeman, Belgrade Montana has seen interest and growth increase over the past couple of years, but it is still a small western town. The tight-knit community atmosphere appeals to people who are looking for a delightful blend of gorgeous vistas, outdoor adventure, and community pride.

International Airport

Belgrade is home to the Bozeman Yellowstone International Airport, one of the most beautifully crafted airport terminals in the country featuring a view of the snowcapped mountains, while inside visitors are treated to a prominent wood and stone aesthetic that accurately reflects the beauty and prominence of the surrounding landscape. The airport underwent an expansion in 2021 to add 31 new routes and destinations.

Exciting Speedway

The Gallatin Speedway is a popular destination for those looking for some good old-fashioned, dirt track fun. A variety of events are planned every year featuring different classes that are guaranteed to keep the entire family enthralled and rooting for their favorite racer.

Unprecedented Mountain Skiing

If you’re into skiing or boarding, there’s simply no overlooking the trails at Big Sky Ski Resort. Spanning over 5,800 acres of terrain, half of them are dedicated to those who are aiming at improving their skills and techniques. The other half presents experts with some of the most vigorous runs in the country. Big Sky Ski Resort is just one of many ski resorts to explore in the Gallatin Valley, there is also Bridger Bowl Ski Area, Discovery Ski Area, and Great Divide Ski Area, to name just a few.

Lewis and Clark Caverns State Park

The caverns at Lewis and Clark State Park were discovered back in 1892. The Park is home to caves filled with stalagmites, stalactites, and other beautiful natural formations; they are open year-round for safe and well-lit guided tours. Just 45 minutes from Belgrade, visitors are treated to limestone formations that rival the most magnificent cave sites in the world.

Madison River

A beautiful tributary of the Missouri River, the Madison River runs 183 miles long through the states of Montana and Wyoming. A quick 30-minute drive from Belgrade, the river is fly fishing only and is also a great place for a refreshing swim. It boasts a hot spring to sit in and banks to explore.

Yellowstone National Park

Belgrade is a mere 1 ½ hour drive away from one of the most majestic national parks in the world. At over 3,500 square miles, Yellowstone spreads through three different states – Montana, Wyoming, and Idaho. It features a variety of must-see features including jaw-dropping canyons, lush and fragrant pine forests, rivers flanked by endless evergreens, and of course, geysers such as the world-famous Old Faithful. Wildlife abounds in this raw, untouched country including wolves, elk, bison, antelope, and bears. Established in 1872, Yellowstone National Park is just one of the many reasons why living in Montana, Belgrade is so spectacular.

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Explore the Lusitano Plan 1: Now You’re Home

This single-family home offers couples and families the opportunity to live among the Bridger Mountains to the north and the humble yet exquisite Gallatin Range to the south. With so many activities available to those who live in Belgrade homes in Montana due to the proximity of these inviting mountains, the location is made even sweeter when you’re able to come home to the Lusitano.

With well over 2,500 square feet of living space, the home provides a sense of open concept while still allowing for those cozy moments. One story means easy and fluid maneuverability inside the home, with no stairs to navigate and a floor plan that maximizes square footage. Depending on your family’s needs, it is easy to add various options to accommodate your lifestyle.

A walk through the Lusitano reveals a sophistication and grandeur rivaled only by the extraordinary scenery. The stage is set for stylish entertaining with an abundance of available living space such as a great room and ample dining room. It is easy to envision friends and family gatherings for the holidays or just because spilling out onto the generous covered patio to breathe in the mountain air. 

Tremendous Curb Appeal

What is striking about the Lusitano is its understated elegance. A one-story home that is both dignified and inviting with front pillars spanning a covered front porch, an ideal location for potted plants or a sip of iced tea. A 3-car attached garage incorporates style with functionality and blends seamlessly into the main living space of the home.

Spacious Bedrooms

The Lusitano Plan 1 includes three bedrooms with an option for. a fourth. Each is distinct on its own, with the owner’s bedroom boasting a spacious bathroom with the option for a tub. At over 240 square feet of space, the owner’s bedroom overlooks the full backyard from a wide set of windows that allow in the natural Montana sunlight. The walk-in closet is more than accommodating for a couple’s wardrobes, with extra room to breathe. 

The Great Room

Directly off the streamlined kitchen, the Great Room offers its own unique appeal. The gas fireplace anchors the charming built-ins while a wall of windows provides a private view of the backyard. Ample room for multiple seating areas means the Great Room can serve multiple purposes for everything from children quietly doing their homework to larger dinner parties easily breaking off into smaller groups.  With the heart of the home and the kitchen in direct view, you’ll always be a part of the fun while preparing those savory home-cooked meals.

A Cook’s Kitchen

Whether you eat to live or live to eat, this elegant and streamlined kitchen has plenty of space to move around while you whip up your culinary creations. A large island with an inset sink is ideal for a quick meal or spontaneous family gatherings. There’s enough room for kids to spread out their books and for the adults to organize their briefcases. Pendant and recessed lighting shine soft, crisp illumination to highlight the understated cupboards and expansive counter space. 

A walk-in pantry comes complete with shelving to stock your goods separately, cleanly, and out of sight.

Dining Rooms are for Traditions

In keeping with the style of the rest of the home, the dining room flows unencumbered from the kitchen while still being a space that is clearly dedicated to more formal gatherings. Sunday dinners, Thanksgiving, and holiday meals are within easy reach for the cook. Expansive window banks maximize natural light and offer a relaxing view of the backyard.

Three Car Garage  

With new homes in Montana, you can always use more space for recreational toys. Plan 1 has a full three-car attached garage with space for storage and working. There is plenty of room for workbenches, cabinets, tools, and bins along with the family cars, ATVs, a boat, and more. Fully lit, the garage is an extension of the home and provides the perfect area for family car enthusiasts to explore their interests.

… And all of the Luxurious Extras

  • Immerse yourself in the gorgeous Montana weather out on the spacious covered patio. A relaxing place for a bit of conversation and a cocktail, it’s easy to fall in love with the big Montana sky.
  • Depending on your selection, your home in Montana will have 2.5-3 bathrooms with an optional tub in the owner’s bath. Generous in size with a modern, luxurious feel these bathrooms allow for utmost privacy. Clean modern lines and a blend of pleasing neutrals elevate the space to your own personal spa.
  • The centralized laundry room makes completing tasks easy and convenient without disturbing the rest of the household. Situated off of the entryway, a cloakroom leads directly into the laundry room where you’ll find a sink and plenty of space for essentials.
  • Choose between a den and an optional 4th bedroom to best suit your lifestyle.

The Lusitano Plan 1 has everything a growing or established family or couple needs with plenty of perks and exciting features to call it your own. The Lusitano is a space you’ll love coming home to.

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How to Choose the Right Loan for You

When moving to Montana and finding a new residence, there are so many options to consider based on your lifestyle; the size of the home, the options to select – everything from tile color to extra bedrooms-, and of course, your mortgage financing. When you are secure and confident in your new home-buying decision, it’s time to choose the right loan that fits your needs. It can be difficult to figure out which loan is the right one for you. Use this guide to help you with the differences between the various loan types.  

Long-Term Mortgages

The terms of a long-term mortgage are usually 15 or 30 years, however, they can be as long as 50 years. Mortgages are secured by land, a home, or other types of real estate. The individual (borrower) agrees to pay the lender a certain amount over a period of time. The individual agrees to pay the price of the home plus the interest over the course of the mortgage terms, generally paying most of the interest off first. 

The longer the terms of the mortgage, the lower the monthly payments will be, however, more interest will be paid out over the lifetime of the loan. 

Conventional Loans

Also referred to as a ‘conforming loan’ that can be purchased by Freddie Mac or Fannie Mae. These entities are designed to give more purchasing power to individuals who meet certain criteria, such as higher credit scores and little debt. As government-sponsored enterprises, Freddie Mac and Fannie Mae purchase mortgages from lenders and sell them to investors. The home buyer will enjoy lower interest rates and lower monthly payments if they meet certain criteria.

Rate Locks

Interest rates are always changing, which can be stressful for homeowners and what they must budget every month for their mortgage. A rate lock guarantees the borrower that the interest rate on the loan won’t increase or decrease over the period of time that is specified in the locked-in agreement. A separate fee or charge may be applied but the borrower can rest assured that even as interest rates rise, their monthly payments will stay the same.

Adjustable-Rate Mortgages

Also known as ARM, an adjustable-rate mortgage is a loan that offers the borrower a variable interest rate. At the beginning of the loan, the interest rate may be fixed and then after a certain amount of time, it will adjust based on market conditions. This means that the borrower will see fluctuations in their monthly payments, they may go up but they also may go down. 

ARMs are a great option for those who plan on selling their home before the initial interest rate re-adjusts. They are also a good option for those borrowers who are comfortable with the uncertainty of fluctuating monthly payments that are reflected by changing interest rates.

2-1 Buydown

A 2-1 Buydown is a great option for borrowers who might not otherwise qualify for a loan. This type of financing offers a lower interest rate for the first two years, creating a lower (and more affordable) monthly payment. The agreement is that the borrower will pay for points at the time of closing. Keep in mind that after the first two years of lower interest rates, a higher rate will likely be put into place, raising monthly payments.

Government-Backed Loans

Government-backed loans refer to USDA, VA, and FHA loans. These types of loans pose less of a risk to lenders because if you default on your loan, the government pays the remainder of what you owe. If you don’t qualify for a conventional loan, you may qualify for a government-backed loan. Each type of loan has its own set of criteria that the borrower must meet.

  • USDA Loan. Offered through the Single Family Housing Guaranteed Loan Program these are backed by the U.S. Department of Agriculture, lenders are able to offer borrowers lower interest rates to make housing more affordable for low-income families.
  • FHA Loan. Backed by the Federal Housing Administration, this type of loan is available to families with lower credit scores and lower down payments. Mortgage insurance will also be a priority.
  • VA Loan. A VA Home Loan is a government loan backed by the US. Department of Veteran Affairs and is available to eligible veterans, qualifying surviving spouses, and service members.

For Purchase Loans and Cash-Out Refinance, eligibility extends to those with satisfactory credit, sufficient income to meet monthly obligations, and possession of a valid Certificate of Eligibility (COE). The Interest Rate Reduction Refinance Loan (IRRRL) is exclusively available for properties with an existing VA guaranteed loan. This option aims to lower interest rates and reduce monthly payments on the current VA loan, providing financial flexibility for eligible individuals.

The Native American Direct Loan (NADL) Program targets Native American Veterans seeking to purchase, construct, improve, or refinance homes on Native American trust lands. Participation in the VA direct loan program by your tribal organization is a prerequisite, and possession of a valid COE is mandatory.

Additionally, Adapted Housing Grants cater to Veterans with specific total and permanent disabilities related to military service. Through Specially Adapted Housing (SAH) or Special Housing Adaptation (SHA) grants, eligible Veterans can obtain suitable housing tailored to their unique needs.

Exploring all of your home loan options is the first best step to take. Based on your preferences and situation, certain loans may work better for you than others. Calculate the estimated cost of your home purchase, taxes, and closing costs to determine how much you need to borrow. Your current debt, past bankruptcies, income, and credit score will all be reviewed to help you determine which type of home loan works best for you.

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Why the New Homes in Bozeman Reflect Your Coveted Lifestyle

Montana might be known for its rustic charm, big sky, and wide-open spaces, but that doesn’t mean you have to sacrifice your comfortable and luxurious lifestyle when you move to the area.

Bates Homes at Prescott Ranch are new homes near Bozeman, Montana. These homes offer elevated living with a luxe look and multiple new home options crafted with top-of-the-line materials. 

Every home has been designed with a meticulous approach and Bates Homes signature features to help create ample amounts of natural light, sleek storage solutions, limitless room possibilities, and an unmatched level of comfortability.

View the Prescott Ranch floor plans and photo galleries and imagine your life in one of these beautiful homes. If the pictures don’t convince you, let us explain how these stunning new homes in the Bozeman area can help you live the lifestyle you’ve always dreamed of.

Luxurious Single-Family Homes near Bozeman, MT

Bates Homes designed Prescott Ranch with the vision of a sophisticated and comfortable lifestyle that comes to life in the heart of every home built.

You don’t have to worry about antiquated floorplans or styles. The colors, materials, and bonus features you choose will coexist to become the home of your dreams.  Offering twelve-floor plans and flexible design options, Prescott Ranch allows you to build the perfect home for your family and lifestyle. No more worrying about outdated floor plans or unappealing styles. The customization of unique colors, quality materials, and bonus features you choose will coexist to become the home of your dreams.

Every home has modern touches like energy efficiency, open floor plans, and thoughtful details that make living life easier than ever before.

Much thought has gone into choosing every design component of Prescott Ranch homes. When selecting the elements of your home, you can expect to see crafty finishes and top-of-the-line materials. No corners are cut in the craftsmanship or home-buying process either You can rest assured that no corners will be cut in the design quality or home-buying process as well.

As you learn more about our company and vision, We will walk you through every step of the building and purchasing process, and streamline the experience from our first meeting to us handing you your keys. As a family-owned business, these homes and the families who choose them are a labor of love and our legacy.

That is why we are so focused on creating elegant, innovative, high-quality homes that people will love.

Thoughtfully Designed New Home Communities

The homes at Prescott Ranch are more than just beautiful houses on a homesite. Every Bates Homes neighborhood is carefully chosen with the future families in mind. The neighborhood in Belgrade, MT is near excellent schools, delicious restaurants, and amazing shops. 

But this close proximity to modern amenities isn’t all the location has to offer. There are plenty of places that are just a short drive where you can enjoy the best views and activities nature has to offer. Popular activities during the summer include swimming, biking, and hiking, while the winter months provide a world-class experience for skiers and snowboarders alike. 

It’s also worth mentioning that you and your family can have the benefit of enjoying the great outdoors without even having to leave the neighborhood. . Multiple parks have been included in the neighborhood design to make getting outside safe and simple. These parks are the perfect spot for the community and your family to gather for special events or weekend fun.

Live the Fun, Bozeman, MT Lifestyle

The Bozeman area is growing rapidly in all of the best ways. Downtown Bozeman has many trendy places to shop, award-winning restaurants,  and charming coffee shops. . 

In the nighttime, watch downtown come alive with locals catching up over dinner, trying craft beer and cocktails, or dancing the night away. If there’s one thing you can count on it’s that There is a scene for everyone in downtown Bozeman.

In addition to a bustling downtown area, the Bozeman community has been sure to accommodate the young families moving to the area. There is always something on the community calendar for families to do and spend time together. 

There are many parks, events with live music, a farmer’s market, and holiday-themed gatherings where you and your family can create lifelong memories together.

The town of Bozeman isn’t all, though. When you live in Montana, the great outdoors are always calling! Whether you enjoy fast-paced or relaxed activities or prefer the land or the water, there is an outdoor hobby for everyone. 

You can always appreciate the scenic views right outside your doorstep or visit some of the State and National Parks nearby. When you choose a new home in Bozeman, you get the best of everything around.

New Homes in Bozeman at Prescott Ranch

The new homes for sale at Prescott Ranch are the perfect place for your family to lay down some roots. The comfortable and elevated homes we offer are a space you can gladly call home for years to come.

These innovative and stunning homes, the neighborhoods we select, and the community-driven local area combine to create a lifestyle you’ve always dreamed about.

Choose a home in beautiful Big Sky Country and love the life you live every single day, in a home made just for you.

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Why Moving to Montana Can Improve Quality of Life

Montana has earned the nickname the Treasure state mainly due to the large gold and silver deposits found there. However, considering everything it offers, the state truly is a treasure in itself.

Montana is a state with incredible natural beauty and a special way of life. If you’re considering moving to Montana, here are a few examples of how calling this state home can improve your quality of life.

And if you’re looking into moving to Montana and buying a home there, take some time to view the Prescott Ranch residences by Bates Homes. These breathtaking homes are designed to fit a modern lifestyle that integrates seamlessly into the natural beauty of the state.

These neighborhoods have been planned and designed with care to improve the quality of life for families that live there and are considered the best of the best that Montana has to offer.

Breathtaking Natural Beauty

Compared to the majority of the United States, Montana is relatively untouched. The nickname “Big Sky Country” was bestowed upon Montana for a reason. The amount of gorgeous and open land is unlike any other state.

Glacier National Park has some of the best views in the nation like Logan Pass and Lake McDonald. There is also the ever-famous Yellowstone National Park. The Midway Geyser Basin and Artist Point are both exceptional scenic views. Montana also includes the world-renowned Glacier National Park, which offers some of the best scenery in the nation such as Logan Pass and Lake McDonald. Not to mention that the ever-famous Yellowstone and Grand Teton National Parks are just a few hours away, which offer mesmerizing geysers and a considerable amount of wildlife. 

These Gorgeous landscape views are not limited to just the National Parks, however. There is an abundance of nature to take in across the state, and potentially,  right outside your front door!

Montana is the 48th most populated state, and because of this low population density, her natural beauty has been preserved and is integrated into the way of life there. 

You won’t believe how being surrounded by natural wonders after moving to Montana can improve your quality of life until you experienced it firsthand.

More Than Just a Few Outdoor Activities

Due to Montana’s landscape being so well preserved, there are plenty of outdoor recreation opportunities where you can spend your free time. 

According to the US Forest Service, spending time outdoors can improve physical, mental, and community wellness. Essentially, the amount of time someone spends outdoors is a key factor when determining their quality of life.

Montana has four, beautiful seasons, and each one is nothing short of spectacular.

During the warmer seasons, you can :

  • Hike
  • Paddleboard
  • Canoe and kayak
  • Swim
  • Pick berries
  • Horseback ride
  • Fish 
  • Bike 

In the winter season, you can:

  • Cross-country and downhill ski
  • Snowboard
  • Dogsled
  • Ice fish
  • Ice climb
  • Snowshoe

These lists barely scratch the surface of everything you can experience in Montana’s great outdoors!

Potential for Higher Education

It’s no secret that, on average, people with bachelor’s degrees earn more than high school graduates. Living in Montana, there are many opportunities to further your education for less money. 

According to CollegeCalc, Montana is the 49th most expensive state to attend college in the nation. The University of Montana in Missoula and Montana State University in Bozeman are both popular choices for MT state residents and out-of-state students alike.

There are also plenty of other options for higher education with 12 two-year schools and other private colleges that are accessible. 

If you are not personally looking to further your education, consider how incredible it would be for your children to get a degree in the same state that you live in. Not only that, but they could attend college affordably all while getting a top-notch education. 

The Tax Factor

Montana is one of only five states in the nation to impose no state-wide sales taxes. This elimination of sales tax allows you to regularly save some money on the purchases you make.

Additionally, in comparison to the rest of the country, Montana has a relatively low residential property tax. This lower tax rate means owning a home here is more accessible than in some other states.

Low property taxes might be the push you need to finally become a homeowner. Being a homeowner is a dream of so many, and Montana offers homes that fit every kind of lifestyle. 

Building equity, qualifying for tax breaks, and stabilizing your housing costs are all ways owning a home in Montana can improve your quality of life. Not to mention, the feel-good you get from the pride of ownership.

With gorgeous new builds like the ones at Prescott Ranch, it’s hard to not picture yourself moving to Montana!

Life’s Next Big Adventure: Moving to Montana

Now that you’re convinced moving to Montana is your next step in life, consider the new homes at Prescott Ranch. These beautiful homes in the Gallatin Valley are designed to fit into the Montana way of life.

Get away from the big city life and take it slow in the great outdoors of Montana in a brand new home at Prescott Ranch.

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