Property buyers who want to live in rural areas have great opportunities by choosing a USDA mortgage. The program caters to low-income families that need a helping hand in buying a home. The stipulations of the mortgage program start with the location of the property. It cannot be located in a metro area of the city or town, and it must be priced affordably for these home buyers. By reviewing how to qualify for the mortgages, buyers can determine if they can buy a home with the mortgage product.
Having the Right Income Level
When evaluating the applicant, the lender must determine that the buyer is within a specific percentage of the poverty line. The USDA program is for lower-income families, and an applicant that makes over $100,000 a year will not qualify for the loan program. The applicant must provide income tax returns or pay stubs for the last six months to show define their monthly and annual income. The loan must be affordable, and they cannot get a mortgage if they have a debt-to-income ratio of over 43%.
A Complete Review of Credit Scores and Credit History
The lender reviews their credit scores, and the borrower must have a credit score of at least 580 to qualify for a USDA mortgage. The assessment of their credit report cannot reveal any negative listings such as charge-offs or accounts that were closed before the balance was paid off. If they have any collection accounts, the borrower must have a payment plan set up with the creditor, and they must show evidence of the plan when applying for the mortgage.
Steady Employment and the Verification Process
All applicants who are attempting to get a USDA mortgage will need to provide evidence of steady employment. Lenders prefer a borrower who has at least six months to one year on the job with their current employer. They will contact the employer to get verification of the employment and the applicant’s wages. Borrowers who are interested in the program can contact Dustin Dimisa for more information about applying for a mortgage.
Finding A Property That Qualifies
A real estate agent can help the buyer find a home that meets the restrictions of the mortgage program. They will review rural areas where properties are listed on the market. For example, the mortgage program restricts properties to a rural town or smaller city that doesn’t have a metro area. The lender must approve the property before approving financing for it.
What to Expect During the Closing?
The property closing is pretty straightforward. The buyer must have homeowner’s insurance for the property and flood coverage if it is in a designated flood zone. They need to give copies of their policies before the lender schedules the closing. An attorney reviews all the documents and explains the rights of each party.
Home buyers who want to live in a rural area could qualify for a USDA loan if they meet the income restrictions. The loan program caters to low-income families and gives them a chance to buy a home. Home buyers can learn more about USDA loans by contacting a lender now.