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Now that the housing market is finally calming down after the pandemic, buyers are facing a new challenge: Soaring mortgage rates.
In Nebraska, the average 30-year fixed mortgage rate is 5.56% — up from 2021's historic lows. This raises the average monthly mortgage payment to $1,137 (assuming a 20% down payment at the median home value).
But buying a home in Nebraska is still possible, even for first-time home buyers. Many markets are seeing frequent price drops and fewer offers, giving motivated buyers the upper hand in negotiating for the best price.
In this guide, you’ll learn how to buy a house in Nebraska with confidence no matter what the market brings. Learn why you can trust our advice.
Whether you're actively house hunting or just starting to browse homes on Zillow, it's never too early to find a great local realtor to guide you on your search. An experienced agent can help you navigate a tricky housing market, explore your financial options, and negotiate the best deal possible.
Best of all, hiring a real estate agent comes at no extra cost to you — since the seller typically pays both their listing agent and your buyer's agent.
Ready to find a great local realtor, but not sure where to start? The best (and easiest!) option is to try a free agent matching service like Clever Real Estate. Answer a few simple questions about your home buying goals, and Clever will match you with hand-picked agents from Keller Williams, RE/MAX, and other top brokerages in your area. Find a top local agent and make your home buying dreams a reality today!
Step 1: Save for a down payment
🔑 Key takeaway:
Your down payment can be less than 20% of the purchase price — $49,725 for the typical home in Nebraska — but you'll have to purchase mortgage insurance and pay more interest over the life of your loan.
Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.
Typically, mortgage lenders in Nebraska want you to contribute 20% of the purchase price as a down payment. That would be $49,725 for a $248,627 home — the typical home value in Nebraska.
However, you have options to lower your down payment amount.
Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).
Minimum down payment (%)
Down payment ($)
Based on typical home values from Zillow (August 2022)
But making a down payment of less than 20% comes with some risks.
First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.
Based on home values from Zillow (August 2022) and a 5.56% interest rate for a 30-year loan.
Second, you may have to purchase mortgage insurance.
Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.
Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.
VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.
» READ MORE: Everything you need to know about low-income home loans
Nebraska down payment assistance programs
Nebraska has a number of down payment assistance (DPA) programs to assist low-income and first-time homebuyers afford a house. These programs can provide eligible participants with a government grant or loan that can help cover a down payment or closing costs.
Here are a few DPA programs in Nebraska that you might be eligible for:
NIFA Homebuyer Assistance Program
The Nebraska Investment Finance Authority (NIFA) offers its Homebuyer Assistance Program to first-time buyers and those who haven't owned a home in the past three years. The program includes both a first and second mortgage in order to assist people without the means to afford closing costs or a down payment.
The maximum amount of the loan cannot exceed 5% of the home’s purchase price or $10,000. Household income limits apply depending on the size of the property and the county the home is located in. Some participants may be required to contribute $1,000 towards the home to qualify for the program.
U.S. Department of Housing and Urban Development
Montana's additional programs can be found on the state HUD page here.
Step 2: Find a great real estate agent in Nebraska
🔑 Key takeaway:
Interview multiple agents to find one who knows your target neighborhoods, has experience in your price range, and communicates well.
Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Nebraska.
Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:
- Years of experience
- Number of transactions in the last year (the more the better!)
- Experience in your price range
- Overall review score
- Individual reviews and complaints
Step 3: Get preapproved for a mortgage
🔑 Key takeaway:
Once you're preapproved for a mortgage, it's imperative that your financial situation doesn't change. If your credit drops, it can derail the process and keep you from closing on your house.
Here are some easy ways to ensure your credit doesn't change after you receive your preapproval letter:
- Avoid opening new credit accounts
- Don't close any accounts that have been open for a long time
- Make all of your credit card payments on time
» LEARN MORE: What factors do mortgage lenders consider?
A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.
Most sellers in Nebraska will require preapproval before showing you their home.
You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Nebraska home.
Step 4: Choose the right location
🔑 Key takeaway:
Search for neighborhoods where:
- Home prices are within your price range
- Home values are on the rise
- The local amenities support your lifestyle
Currently, the typical home value in Nebraska is $248,627, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!
Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.
To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Lincoln:
Home value appreciation in Lincoln
Step 5: Start house hunting in Nebraska
🔑 Key takeaway:
Listing prices in Nebraska have gone up in the past year, so even if there are quite a lot of homes that fit your budget, they might not fulfill all your expectations. For the best outcome, communicate with your real estate agent and review your priorities — that way, you can keep a realistic mindset of what kind of house you’re looking for. They can show you listings that cover all the bases while still keeping within your budget.
Searching for homes in Nebraska is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.
Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."
Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.
Look at current housing inventory
The timing of your house hunt in Nebraska can have a big impact on your number of options. For example, in Nebraska, June has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.
On the other hand, December gives you the fewest choices in Nebraska. Historically, there are 49.0% fewer homes for sale than during Nebraska's peak season.
Housing inventory in Nebraska by season
New listings per month
Based on data from Realtor.com (October 2022)
Step 6: Make an offer
🔑 Key takeaway:
While there is a fair amount of inventory in Nebraska, there is a strong demand in the state, and very few houses are left on the market at the end of each month. You should be ready to make a strong offer when you find a house you like, as you may face a lot of competition. Listen to your agent’s advice when coming up with your offer — they can help you find a realistic figure that’s competitive enough to catch the seller’s eye.
Once you find a Nebraska house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.
Currently, in Nebraska, homes stay on the market for 54 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.
Historically, Nebraska homes sell fastest in July, where the average property is only on the market for 45 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.
On the other hand, if you buy in January, you have a bit more time to search. Homes typically stay on the market 18 days longer than Nebraska's annual average.
Average time homes spend on market in Nebraska
Based on data from Realtor.com (October 2022)
» LEARN MORE: What should an offer include?
Step 7: Inspections and appraisals
Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.
🔑 Key takeaway:
- Inspections: A licensed professional checks the house for any unseen, unexpected, or potential issues.
- Appraisals: An appraiser hired by your lender examines the house to determine how much it's worth.
Home inspections in Nebraska
Having your Nebraska home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.
Your inspector should check out the following parts of the property:
- Electrical system
- HVAC system
If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.
Sellers in Nebraska are required to disclose all known issues with a property to interested buyers. However, the disclosure form only reveals problems the seller is already aware of.
To prevent having to pay for expensive repairs later on, it's highly recommended for buyers to have more extensive tests prior to closing on a home.
In addition to a general home inspection, consider having these specialized inspections completed as well:
- Radon testing: Nebraska tends to have higher levels of radon compared to most other U.S. states. Since radon can cause long-lasting damage to your health, it's recommended to complete a radon test annually. If a seller hasn't done a radon test recently, you can find a free or discounted test kit from Nebraska's Department of Health and Human Services.
- Termite inspection: Some loans may require you to get a termite and pest inspection, but it’s a good idea to have one done regardless. Unwelcome pests can cause structural damage and potential health issues, so it's best to catch and treat infestations early.
Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.
» LEARN: 3 options for buyers after a low appraisal
Step 8: Close on your new home!
🔑 Key takeaway:
Before you close on your new home, you and your agent will do a final walkthrough of the property to ensure that it's still in the expected condition.
To close on your home in Nebraska, you'll need to meet at the title company to complete some paperwork and pay your closing costs.
On the closing date, expect to spend about an hour reviewing and signing documents to finalize the title transfer. Take your time to make sure all of the information is correct, especially on the following forms:
- Your final loan application
- The deed
- The mortgage promissory note
- The disclosure statements
Once the paperwork is finished, you'll have to settle your closing costs. The title company will collect the total sum you owe, and then they'll handle the disbursement of the funds.
Closing costs for homebuyers can usually be split into four distinct categories:
- Lender fees: Fees paid to your mortgage lender for originating and underwriting your loan. Your lender fees may also cover other expenses related to your loan, such as appraisal or survey fees.
- Title and escrow charges: Charges you owe the title company for their services, such as facilitating the closing process and conducting the title search.
- Prepaid costs: Ongoing costs of homeownership that need to be paid up front. Some lenders require borrowers to pay certain expenses in advance, such as property taxes or homeowners insurance.
- Other closing costs: Miscellaneous expenses that are unique to each buyer. Some common costs that fall into this category include pest inspection fees, real estate attorney fees, and natural disaster certification fees.
Buyers in Nebraska typically pay 3–5% of the purchase price in closing costs. For a $248,600 home — the typical home value in Nebraska — that's between $7,458 and $12,430!
Frequently asked questions
Nebraska does not require you to hire a real estate attorney to buy a home. However, depending on your circumstances, you might consider hiring one anyways. If you do, treat the process similarly to hiring an agent. Interview multiple attorneys and proceed with the one that best meets your needs.
- Save for down payment
- Get pre-approved for a mortgage
- Choose your preferred Nebraska neighborhoods
- Partner with the right real estate agent in Nebraska
- Go house hunting
- Make a strong offer
- Inspections and appraisals
- Do a final walkthrough and close
Yes, Nebraska offers the Homebuyer Assistance Program and the First Home Program for first-time buyers, veterans, and buyers located in target areas. To qualify for either program, you cannot exceed the household income limit or purchase price threshold for your county.
The Homebuyer Assistance Program provides a 30-year conventional, FHA, VA, or USDA loan, along with down payment assistance of up to $10,000. You will have to contribute at least $1,000 to be eligible.
Buyers who don't need down payment assistance can opt for the First Home Program. This option offers a lower interest rate for the first mortgage.
Why trust us?
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Our team of industry-leading researchers are committed to making homeownership more accessible by educating buyers through guides like this one. We've spent thousands of hours analyzing publicly available data, surveying consumers, and interviewing industry experts. Our research has been featured in The New York Times, Business Insider, Inman, Housing Wire, and many more.
Federal Reserve. "Housing Market Tightness During COVID-19: Increased Demand or Reduced Supply?." Accessed October 11, 2022. Updated July 08, 2021.
Consumer Protection Financial Bureau. "The Fed is raising interest rates. What does that mean for borrowers and savers?." Accessed October 11, 2022. Updated March 17, 2022.