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Today's Mortgage Rates in Montana

Today’s mortgage and refinance rates plus current home buying and refinance advice for Montana residents

Buying a home in Montana

When purchasing a home in Montana, buyers should always make sure that the language in the contract precisely mirrors their understanding of the transaction. Identify vague and ambiguous contract wording so it may be clarified in the final contract — any assumptions or implied meanings will not be enforced by the Montana courts. Always get written documentation to give proof of what has been agreed prior to purchase. Oral contracts that convey interests in property are invalid in Montana and will not typically be enforced by the courts (M.C.A. § 70-20-101). The state of Montana is what is known as a "Buyer Beware" state, and the courts will usually uphold caveat emptor clauses in property sales contracts. This means they will not normally award any damages to buyers who have discovered faults or defects in the home after the contract is signed. There are of course a few exceptions to this rule:
  • The seller of a property actively prevented a prospective buyer from carrying out an inspection on the home. This is known as fraud or misrepresentation
  • In 1982 the Montana Supreme Court applied the “warranty of habitability” clause which means that when a buyer purchases a new build home, there is a guarantee that the home was “constructed in a workmanlike manner and is suitable for habitation”

Refinancing a home in Montana

Montana is another of the many states that see little reason to interfere with mortgage refinancing. Of course, it regulates lenders. And federal rules still apply. But Montanans should find few if any state-level barriers to their refinance plans. You’re likely to want to refinance for one of three reasons. To:
  1. Get a lower rate or monthly payment or both
  2. Extract some of the value of your home in the form of a check with a cash-out refinance
  3. Shorten the length of time before you’re mortgage-free
Here’s a bit more detail on those.

Lower rate or monthly payment

By historical standards, mortgage rates were ridiculously low for more than a decade after the Great Recession. Chances are, they still will be when you read this. If they are, you’ll likely benefit by getting a lower rate. That should cut your monthly payment, too. But it will also reduce that payment in another way. And that’s not 100% good. Because every time you refinance, you’re resetting the clock on your mortgage. Suppose you got your original 30-year mortgage a decade ago, when you were 25 years old. You thought you’d be free of your mortgage by the time you were 55. If you refinance to a new 30-year loan now, 10 years later, you won’t be mortgage-free until you’re 65. And you’ll have been paying interest on your home for 40 years instead of 30. That could wipe out some or all the gains your lower mortgage rate will bring. But there’s an alternative. See "Shorten the length of time before you’re mortgage-free," below.

Cash-out refinancing

This deservedly got a bad rep after many abused the process, contributing to the credit crunch. But there’s nothing inherently wrong with taking some of your equity (the amount by which the market value of your home exceeds your mortgage balance). And there are plenty of reasons for cash-out refinances that few would quibble with. Maybe you want to improve your home, start a business, pay medical bills, consolidate your debts or help your kids. Nothing wrong with those.

Shorten the length of time before you’re mortgage-free

This is something for those who have — or who are about to — enter that phase in life where money isn’t a day-to-day problem. You have cash left over at the end of each month and want to use it wisely. Refinancing to a shorter term (10, 15, 20 years, maybe) will almost certainly raise your monthly payment. But it will free you of your mortgage years earlier. And, because you’re borrowing for a shorter period, you’re likely to save a pile in interest charges.

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