While most people in US continue to relocate to urban areas, there is a vast majority that lives in rural areas. In fact, to encourage and help people secure a home in rural areas, the United States Department of Agriculture (USDA) offers loans to individuals from low and medium income groups. The USDA partners with local lenders to meet the objective of providing affordable housing to people residing in rural areas. USDA loans aim for rural development in Texas and offer multiple benefits as compared to other private and government funded loan programs. Continuing the discussion further, in this post we list five reasons for choosing a USDA loan in Texas. Take a look. 1. No Down Payment While home loans such as the FHA and conventional loans require the borrower to supply a 3.5 to 5 percent down payment, Texas homebuyers can get up to 100 percent financing without spending a penny as down payment. On top of that, you also save a significant amount on the upfront fee required for financing. No matter whether you are a first time or repeat home buyer in Texas with little or no amount to pay a down payment, simply apply for a USDA loan in Texas and save yourself from the burden of paying large down payments. 2. Competitive Interest Rates Most borrowers think about monthly mortgage payments going over the roof when it comes to securing conventional home loans. USDA home loans, on the other hand, are federally backed by the US Department of Agriculture, which is why lenders feel comfortable in lending to people who fulfil the eligibility guidelines. Due to federal backing, borrowers can also expect to get competitive interest rates than conventional loans that doesn’t fluctuate according to credit score, income, and other factors. 3. Flexible Credit Score Requirements Many home buyers fail to qualify for conventional loans due to stringent credit score guidelines. USDA loans don’t require you to have a phenomenal credit score and in most cases, even a 640 credit score would also suffice. Remember that USDA loans in Texas are federally backed and therefore, lenders consider applicants with a blemished credit score provided they meet other eligibility criteria for securing the loan. Even if your credit score is not at par, lenders also accept rent slips, utility bills and cell phone bills to assess suitability. 4. Zero Private Mortgage Insurance Home loans that have a high loan-to-value ratio or low down payments require the borrower to pay an upfront PMI fee, which isn’t applicable to USDA loans. Borrowers only need to pay an upfront premium that insures the lender against borrower defaults, should any situation arises. Nonetheless, the upfront premium is much lesser than PMI costs and can be rolled with the financing and can be closed without putting any money down. That said, the borrower can notice a visible reduction in their monthly mortgage payments. 5. Exclusively for Low and Medium Income Group Individuals The USDA aims for rural development in Texas by providing loans to qualified homebuyers at competitive rates. The USDA hasn’t kept a limit on the maximum amount of the loan, however, there are certain limits on the income requirements of an individual. The rule says that the borrower’s income can’t exceed 115 percent of the area’s median income. You are eligible for any given amount, provided you fulfill the income guidelines and other required criteria. The Bottom Line The USDA home loan program is ideal for those living in rural or suburban areas and wish to purchase their a home in that area. Though funding is available all year around, the USDA processes applications on a first come first serve basis. The approval of loan is based on furnishing of required documents and meeting the eligibility criteria. The best way to increase your odds of getting a loan approved is to consult a mortgage professional to guide you from start to finish.
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Getting home loan approval could be a long and exhausting process. Many factors including your income stability, existing loans and monthly outflows, and even your educational qualification affect your eligibility of getting a home loan. Besides these, credit score is one of the determining factors when it comes to your loan approval. Although banks and lenders may not factor in your credit score in case of a VA loan and other special types of loan, if they do, it might delay the loan approval process and make it more difficult. If you have a bad credit score, this post will give you four ways to get a home loan with a bad credit score. Read on. 1. Negotiate the Rate Individuals with a bad credit score tend get loan approval at a high interest rate. Your need for a loan determines whether you will accept the interest rate or not. You can either convince the lender to grant you a loan at a higher interest rate or for a shorter tenure or leverage a healthy credit history to negotiate the interest rate and the tenure. 2. Add a Guarantor One way to get approval for a home loan is by introducing a personal guarantor. If you have a guarantor who has a healthy credit score, a lender may be inclined to approve your home loan, despite your bad credit score. A guarantor can be anyone from your friends or family to a financing firm. 3. Leverage a Clean Track of Repayment A clean track record of repayment of other existing loans can help a great deal in getting the home loan. Many banks offer pre-approved loans if you have a clean track loan repayment history. In the same way, if you have been repaying your other loans or dues on time and can display a clean track record, you can use this as a leverage to request for a higher home loan amount. 4. Offer Interim Security A bank or lender approves your home loan based on the type of property you buy and that property acts as a primary security. If you have a bad credit score, yet want to increase the loan amount, you can offer another asset as an additional interim security. Loan and Mortgage Experts in Texas Getting home loan on a bad credit score can be a difficult task for anyone. The four ways mentioned in this blog post may help you get an approval on your home loan sooner, and with lesser hassles. If you are looking for a home loan in Texas or nearby areas, you will find trusted loan and mortgage experts and firms such as Service First Mortgage - The Davidson Group, who will help you get any type of loans from simple home loans to VA home loans, even with a bad credit score. VA appraisal is an important part of the VA home loan approval process. When you sign up for a VA home loan, a VA-approved lender requires a VA appraiser to assess the property’s value and ensure that the home qualifies the Minimum Property Requirements (MPRs). The Department of Veterans Affairs established MPRs to ensure that the service members buy homes that are structurally safe, sanitary, and fit on various other similar parameters. If you plan to purchase a home through a VA home loan, it is important for your property to qualify the MRPs to ensure your health and safety. Continuing the discussion further, there are some major problems that may cause hindrance in getting you a VA appraisal. Let’s have a look at a few of them. 1. Inefficient Heating System A home to pass the VA appraisal must include a safe, acceptable, and efficient heating system. It should provide sufficient amount of heat to maintain a home’s temperature above 50 degrees Fahrenheit. Homes that have wood-burning stoves as the primary heating source must have another heating system to maintain an adequate temperature inside home. 2. Dilapidated Roof A roof is the first line of defense that protects the residents from harsh weather conditions and therefore must always be in a good shape. During the VA home loan process, the VA appraisers, sent by the VA approved lenders, inspect the condition of the roof. If there are holes, cracks, or any other defect in the roof, your property will not qualify for the VA appraisal. 3. Inadequate Mechanical Systems An inadequate mechanical system is another reason that can create an obstacle in getting approval for VA appraisal. VA appraisers inspect whether the home has electric and plumbing systems in safe and good working condition or not. The mechanical systems must have considerable future life and should not pose major issues for the residents. 4. Pest Problems To get VA approval, a termite and pest inspection is run on the property. Properties with prior fungus growth, termites, and other pest control issues must get them treated and then re-evaluated to get clearance from VA appraisers. In most states of the US, VA home buyers are not allowed to pay for the cost of a termite inspection. 5. Health or Safety Hazards Any type of health or safety hazard found can fail your property for VA appraisal. The appraisers will inspect the property as well the nearby area to look for health hazards such as polluted water, nuclear waste, waste disposal from the nearby factories or areas. The Bottom LineThe Department of Veterans Affairs has established some strict rules and high standards to appraise a veteran’s prospective home. Home loans from VA-approved lenders isn’t going to pass until the property qualifies all the given requirements. Property agents may look at it as a small and arbitrary process, but these precautionary measures ensure the health and safety of the veteran members and their families. |
AuthorDarrick encourages readers to post issues that need immediate attention in terms of home buying; such interactions will enhance reader engagement and provide a road-map for others Archives
November 2017
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