My last blog, renting vs. buying, deserves more attention. Losing money is always easier than saving it. Saving takes self-control, mental discipline and sound decision-making. Too often, we want to indulge in the goodies and end up with a fat debt and huge problem.
THE UNCONVENTIONAL ROUTE
One way to save money when buying is to choose an unconventional route. Traditional loan processes are sometimes difficult. A buyer can save much more if borrowing through government-backed mortgages such as the Rural Guaranteed Housing Loan, VA Mortgage and FHA loan.
These loans offer attractive deals for almost everyone. The VA loan, however caters only to Veterans and active duty service members. The VA loan and Rural Housing loan offer no money down options, low interest rates, low monthly payments and 100% financing. The FHA loan has a low down payment requirement, flexible mortgage plans and competitive rates.
People looking to move to an area such as Corvallis, Oregon, for low to middle income would best benefit from the rural housing loan, or USDA home loan.
THE USDA HOME LOAN
As I reported earlier on, Corvallis is less prone to natural disasters (funny after the recent flooding). That on top of the numerous benefits of the USDA loan will have a borrower’s bank account happier.
Benefits of the USDA loan include:
No money down
102% financing (includes the guarantee fee)
No cash reserves required
Lenient Credit standards
Use gifted funds toward the loan
Lower utility bills due to more sustainable housing
Repair and renovate a home with USDA funds
Borrow more money to turn house into an energy sustainable household
Covers all types of shelter not being used for money production including chicken coops, hobby garden sheds, detached garages and more
Fixed Interest Rates for 30 years
Detailed Appraisal to Ensure Safety and Soundness of the Home
Zip codes eligible in Corvallis, OR: 97330, 97333
Some areas within the 97331 and 97339 zip codes also eligible
HOW TO BEGIN THE PROCESS
First things first--review your credit score and history. Check the three credit bureaus. Keep in mind that a lender will want a score of 620 or more with a good history of paying on time. You must be able to afford the monthly mortgage.
Second, apply for loan through a USDA approved financing company or lender.
Third, make sure you meet income eligibility limits for your area. Applicants are allowed to have up to 115 percent median income for the area.
Last, but not least, choose a home in the eligible area! Remember, eligible homes will most likely be located in rural or suburban communities with a population of 25,000 or less.
If you’re interested in buying a home in the Corvallis OR area, start searching for your home in the above-mentioned zip codes. Myself and your lender can help with process. Jasmine Reese is a rural housing loan expert for USDA loans.com, a company devoted to rural and suburban development.
For the New Year, why not make a resolve to save money?