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Determine Price Range

Determining the right price range for your Utah home purchase depends on how much you can reasonably afford.

Generally a Utah mortgage lender will loan you between 2.5 to 3 times your yearly income. So, if you make $40,000 a year, you can probably borrow $100,000 to $120,000. Lenders also expect you to pay between 5 percent and 20 percent of the price of the home as a down payment.

It is highly recommended that you apply for "mortgage pre-approval" as opposed to a "pre-qualification."

Mortgage Pre-Qualification

"Mortgage Pre-qualification" does not mean you are guaranteed to receive a loan. The lender will not do any background checks. Generally, you provide a picture of your financial situation over the phone. However, if your account is not so accurate, the bank may not give final approval for your mortgage. Pre-qualification is a free service and you are under no obligation to get the mortgage from that lender if you find a better deal.

Mortgage Pre-Approval

"Mortgage Pre-approval" is no kidding around. The bank will check your credit history, employment information, your investments and your assets and liabilities - everything they check when you apply for a mortgage. Everything except for the property you're going to buy. Once you find the property you want to buy, you will then need an appraisal and a title search. Because some banks charge for pre-approval, make sure you're really going to buy a house in the relatively near future.

Your potential lender will want to know four basic things about you and the home:

  • Do you make enough money to pay the loan mortgage back?

  • How much money can the bank expect you to make in the next 15-30 years? The lender also wants to know your employment history. Have you been in the same field for the past 2 years or have moved around from industry to industry?

  • Are you trustworthy? What is your credit history? Do you pay your bills on time?

  • Does the house you want to buy justify the loan? If for some reason you are unable to pay the loan back, the lender will be forced to sell your house in order to get back the money originally loaned to you. If you borrowed more than the house is worth, the lender will lose money. To prevent such circumstances, the lender requires that you pay to have the house appraised. Usually an appraisal will cost between $200-$400. Appraisals assure the lender that you are paying a fair price for the home.

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