What to know about Nebraska mortgage rates

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Nebraska’s low unemployment rate, golf courses, state parks and historic sites are just a few reasons it’s a great place to call home.

If you’re searching for a home in Nebraska, remember to shop around and compare mortgage rates. What may seem like a small difference could add up to thousands over the course of a 15-year or 30-year mortgage.

Mortgage debt in Nebraska

Credit Karma members with mortgages in Nebraska had average mortgage debt of $148,399 in 2020, with average monthly mortgage payments of $1,190.

That puts Nebraska below average for both mortgage debt and average monthly mortgage payments compared to Credit Karma members across the U.S. in 2020.

Types of home loans

If you choose to finance your dream home, you might be overwhelmed with the number of mortgage loan options out there. Here are some of the more common mortgage types Nebraska homeowners may consider.

Conventional loans in Nebraska

Conventional loans are mortgages that aren’t part of government programs. These loans tend to be good for people with solid credit and a down payment of at least 3% to 5%.

Nebraska FHA loans

FHA loans are a good option for first-time homebuyers to explore — particularly if your credit is less than perfect. That’s because you may be able to qualify with credit scores as low as 580 with a 3.5% down payment or 500 with a down payment of 10%. This FICO® score requirement is the FHA minimum standard. In general, additional lender credit score requirements may apply.

The FHA loan limit in 2021 is generally $356,352 for a one-unit property, but it can reach as high as $822,375 depending on where you live.

Every area in Nebraska conforms to the FHA loan limit of $356,362 in 2021. 

You can find the exact limit by county on the U.S. Department of Housing and Urban Development website.

VA loans in Nebraska

If you’re an eligible veteran or service member comparing mortgage rates in Nebraska, a VA loan can be attractive since down payments and mortgage insurance typically aren’t required by the VA, and you may be able to qualify even if your credit isn’t great. 

Similar to FHA loans, VA loans are insured by the federal government but issued by private lenders.

Conforming loan limits in Nebraska

Conforming loans are a type of home loan that meets certain loan limits set by the Federal Housing Finance Agency. This means they can be bought by Fannie Mae and Freddie Mac, federal-government-sponsored enterprises that guarantee mortgages.

Loans that exceed conforming loan limits are known as jumbo loans. Lenders often consider these loans riskier than conforming loans. 

All of Nebraska’s counties have a conforming loan limit of $548,250 in 2021.

First-time homebuyer programs in Nebraska

If you’re hoping to buy your first home, there may be some assistance programs available to you in Nebraska.

  • Homebuyer Assistance Program: Offered by the Nebraska Investment Finance Authority, this program offers a conventional or government-backed mortgage with down payment assistance for first-time homebuyers. You may be eligible if you can put at least $1,000 toward your home. In some cases, you may need more than $1,000, depending on closing costs and loan type. Income and purchase price limits apply.
  • First Home Program: The NIFA First Home Program is designed for first-time homebuyers who don’t need help with their down payment. You can receive a conventional or government-backed mortgage with a competitive interest rate. To qualify, you must meet certain income and purchase limits. You’ll also need to complete a homebuyer education course.
  • First Home Grant Program: If you qualify for the NIFA First Home Grant Program, you may apply for a $5,000 grant to cover down payment and closing costs. You won’t need to repay the grant. To take advantage of this program, your income can’t exceed more than 50% of the area median income in the county you’re buying a home. Note that funding is limited and grants are given on a first come, first served basis.

Mortgage refinancing rates in Nebraska

If you’re thinking about refinancing your mortgage, keep a few things in mind:

  • Break-even cost — Once you know the closing costs for your refinance, you can use any savings on your monthly mortgage payment to calculate how long it will take you to recoup that investment and “break even.”
  • Cash-out refinance — Have you accumulated equity in your home that you’d like to convert to cash? A cash-out refinance lets you refinance your home for more than what you owe and get cash in return. But you’ll owe the full amount plus interest and you’ll end up owning less equity in your home, which means less cash in your pocket if you sell in the future. 
  • Loan term — You also may want to either shorten or extend your loan term. For instance, if you have a 30-year mortgage, you may want to convert it to a 15-year loan. Keep in mind that reducing your term likely means you’re paying more each month — but less in interest over time. Lengthening your loan term may mean you pay less each month, but more interest over the course of the mortgage. 

About the author: Anna Baluch is a freelance personal finance writer from Cleveland, Ohio. You can find her work on sites like The Balance, Freedom Debt Relief, LendingTree and RateGenius. Anna has an MBA in marketing from Roosevelt Un… Read more.