Benefits of USDA Rural Development Loans

Friday, January 29, 2016
Posted by admin under Mortgage Loans 

Buying a home can be stressful, but getting a home loan doesn’t have to be. There are several mortgage options available to homebuyers. One of the most powerful loan options available, the USDA Rural Development Loan, can help rural and suburban homebuyers realize the American dream. The program, also known as section 502 home loans, offers zero money down, 100% financing, and competitive mortgage rates to homebuyers seeking to live in areas deemed rural.

There are several advantages to securing a rural development loan.



No Down Payment



A USDA Rural Development loan is one of the only mortgages available that doesn’t require a down payment. This program doesn’t actually fund the loans, but it offers a federal guarantee of a portion of repayment to select lenders. This allows selected lenders to take on more risk at terms that are advantageous to borrowers. These loans offer 100% financing to qualified borrowers. This means a home is within your reach without saving thousands of dollars upfront. Even lending fees, closing costs, and renovation and repair costs can be rolled into the cost of the loan.

30-Year Fixed Rates



Many mortgages, especially for first time borrowers, require either a hefty down payment or use an adjustable interest rate. Adjustable rates can increase over time, making what was once an affordable house payment out of reach. With a fixed mortgage, a borrower always knows how much they will pay each month for interest and loan repayments. That cost is fixed for up to 30 years with a USDA Rural Development loan. The loans also offer competitive interest rates. Lenders can also offer 15-year fixed rate loans with competitive interest rates.

No Maximum Purchase Price



Many loans set a maximum purchase price. These purchase price ceilings can make it difficult for homebuyers to purchase even modest homes in the most expensive parts of the country. Under the USDA Rural Development loan program, there is no maximum purchase price. Selected lenders, however, can set a maximum loan amount for applicants based on each potential borrower’s ability to repay. An individual’s maximum loan amount is determined based on their debt-to-income ratio.

Flexible Credit Guidelines



The primary requirement for using this federally-guaranteed loan program is the property location--not a borrower’s credit history, though credit history matters. Spotty or bad credit won’t automatically disqualify a buyer from this program. Loan applicants must show that they have sufficient income to make mortgage payments. Lenders can also set some of their own requirements for granting a USDA Rural Development loan. Also, potential homeowners must plan to occupy a home if purchased under this mortgage program and the home must be located in a qualifying area.

Catlin Bank - New Home

Many Property Types Eligible



Section 502 home loans are available for several different types of properties, including existing homes, modular homes, condos and manufactured homes.
 

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5 Consideratons in Looking for a Rural Home

Monday, January 18, 2016
Posted by admin under Mortgage Loans 

Are you thinking about buying or building a home in a rural area? A rural location offers the peace and benefits of living in the country and taking life at a slower pace. You’re more self-reliant and free to make your own decisions, and you can raise your family the way you want. Before you go seeking rural loans in Vermillion County for your future plans, be sure to consider these issues about your new home.
Rural Home Buying

Location


Take a look at the property that interests you and decide if it’s close enough to your job (if you work away from home), local schools, shopping, and other conveniences. Many people like to get away from these things and don’t mind driving to reach them, but keep in mind how your kids will get to school on a snowy day before deciding.

Services and Utilities


You may find that services and utilities are more of a hassle in rural areas. Find out what you’ll need to do to obtain TV, Internet, and other daily amenities in your life. Basics such as water and electricity should also be researched. Don’t forget to figure out how to dispose of waste; you’ll likely need to have a septic system installed if you’re building a new home.

Zoning


This will only be a concern if you’re building a new home or plan on adding to an existing structure. Find out what the rules and requirements are for your property. You should also research any future plans for the surrounding area. It won’t be a dream home for long if you soon find your rural paradise is slated to have a new housing development or office park go up next door.

Boundaries and Roads


Check out the boundary lines of your new property. A professional surveyor will be able to give you the best information about this, which will be necessary before adding any structures or roads. For that matter, examine the current roads and make sure you will have easy access to your home in all conditions.

Mother Nature


Many people are attracted to the tranquility of nature found in rural areas and don’t realize that the peace and quiet can sometimes come with surprising and exciting natural events. Examine your future property by checking for nearby bodies of water that might flood. Consider buying flood insurance if you’ll be living in a high-risk area. In hilly or rocky areas, find out how stable the land is over time. Be sure to research that your property is not part of any wildlife habitat areas that are protected and may cause you to change any future building plans you may have.
Mother Nature and Selecting a New Home
With these considerations in mind, you’ll be able to find the perfect spot to create your dream home and enjoy the many benefits of rural living. When it comes time to seal the deal, contact Catlin Bank Mortgage Loans to help finance your future plans.

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