3 Things to Know If You Want to Buy a Home in Montana—Sooner Rather Than Later

Since the pandemic, many people have struggled to break into homeownership, and with Montana being the 8th most expensive state in the U.S and it’s no secret that it’s tough out there, particularly in this market. But there are a few things not every future homebuyer knows, and learning them might just bring you one step closer to owning a home.

You don’t need 20% down to purchase a home

If you’ve been saving but a 20% down payment still feels out of reach, you’re not alone. The good news? You may be able to buy a home with as little as 3% down. Here’s what that could look like:

• 3% down — Available for qualifying first-time homebuyers (or those who haven’t owned in the past 3 years) through programs like Fannie Mae HomeReady or Freddie Mac Home Possible.
• 5% down — Standard minimum for many conventional loans if you don’t meet the first-time buyer program requirements.
• Less than 20% down means you’ll typically have to pay private mortgage insurance (PMI) until you reach 20% equity.

If you’ve been saving, you might be closer to buying a home than you think. When you’re ready to talk through the numbers, we’re here to help you figure out the next step.

You don’t have to make a mortgage payment until you’ve been in the home for a month

If the thought of juggling two mortgage payments has you stressing about moving from one home to the next, here’s some good news—you typically won’t make your first payment until you’ve been in your new home for a month.

Here’s the key:

• Mortgage payments are paid in arrears — meaning each payment covers the previous month’s interest, not the upcoming month.
• When you close on a home, you prepay the interest for the remainder of that month in your closing costs.
• Your first regular mortgage payment will be due on the first day of the second month after closing.

Example:

• You close on June 15.
• At closing, you pay interest for June 15–30 (that’s “prepaid interest”).
• Your first full mortgage payment is due August 1, and it will cover the interest and principal for July.

So it’s not that you’re skipping a payment — you’ve actually already paid for that initial partial month upfront, and then your billing cycle kicks in. But this sure makes it easier when you are trying to sort out how to cover all the costs of moving plus juggling either two mortgages or rent + a mortgage. 

Mortgage rates are higher than they were three years ago, but still well below the peaks seen in past decades.

While we may still be dreaming of those 3% mortgage rates that hit just after the pandemic, the reality is that the mortgage rates we are seeing now are not that high compared to what we’ve seen over the last 50 years or so. 

• 1970s (1971–1979)
  Mortgage rates in the ’70s averaged 8.89%, starting around 7.5% and climbing to about 11.2% by the end of the decade.
• 1980s
  The ’80s hold the record for the highest mortgage rates in history. The median rate was 12.82%, peaking at an eye-watering 18.63% in October 1981 (Freddie Mac data). Rates finally began to fall toward the end of the decade as the Fed got inflation under control.
• 1990s
  By the ’90s, mortgage rates had dropped back into single digits, with a median of 7.88% and a range of 6.49% to 10.67%.
• 2000s
  The median rate this decade was 6.18%, ranging from 4.71% to 8.64%. Rates were highest in 2000 at 8.05%, but the housing crash and Great Recession pulled them down to about 5.04% by 2009.
• 2010s
  The 2010s brought historically low mortgage rates, averaging 4.03% with a range from 3.31% to 5.21%. The Federal Reserve kept rates low to help the economy recover from the recession.
• 2020s (2020–Present)
  This decade started with record lows — 2.65% in January 2021 — thanks to the pandemic and the Fed’s economic stimulus measures. But since March 2022, inflation and tighter monetary policy have pushed rates higher. The median so far is 5.66%, with a range from 2.65% to 7.79%.

Experts expect mortgage rates to remain relatively stable in the near term, with only modest declines possible over the next 12–24 months. While today’s rates are higher than they were just a few years ago, they’re still well below the peaks seen in past decades, making historical context an important part of the conversation.

If you are dreaming the dream of homeownership, we hope that this gives you some hope. When you’re ready to start the conversation about buying a home, click here – if you’re not quite there, subscribe to our newsletter or follow us on Instagram to stay in the loop.

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