Posted on: 02nd Mar, 2010 03:31 pm
are there any pro's and con's to using a USDA Home Loan
thanks
clay
thanks
clay
I can think of a ton of pro's...
but let's start with the cons.
the loan is 102% of the sales price...typically. This isn't so bad if the house appraises higher. If not, you are maxed out on value, so you better be sure that rate is one you are willing to stick with for a while. Typically the rates on these loans are pretty good.
Processing time. You better allow a 45 day turn around.
Appraisal, have your realtor check about the lot, if the lot can be subdivided, you will find out all too late in the end that the property does not meet their guide line of a 'modest' dwelling.
Pools....pools cannot be given a value in the appraisal, nor the sales price...back to the modest dwelling guideline for that.
there is an income guideline....wo you better not be rich.
There is a property map...the property can only be in designated areas.
Pros...
WOW>>> 102% financing...
No Monthly mortgage insurance...double plus for this one.
Low rates ..typically
The appraisal is done FHA...which protects the buyer
You don't have to be rich to buy a house.
You don't have to have 3 tradelines.(lines of open credit)
you don't have to have 3 credit scores...one will do just fine
you don't need reserves in the bank
you can still get a seller credit for closing costs...
it's an easy clean cut no mess file..really.
I love rural housing loans. Sure, not every client fits in one, but they are great deals. If you have an experienced loan officer, that does them. You should be in good hands.
They have gotten alot more lenient and less scary.
I don't think you would have much to worry about with an RHS loan.
but let's start with the cons.
the loan is 102% of the sales price...typically. This isn't so bad if the house appraises higher. If not, you are maxed out on value, so you better be sure that rate is one you are willing to stick with for a while. Typically the rates on these loans are pretty good.
Processing time. You better allow a 45 day turn around.
Appraisal, have your realtor check about the lot, if the lot can be subdivided, you will find out all too late in the end that the property does not meet their guide line of a 'modest' dwelling.
Pools....pools cannot be given a value in the appraisal, nor the sales price...back to the modest dwelling guideline for that.
there is an income guideline....wo you better not be rich.
There is a property map...the property can only be in designated areas.
Pros...
WOW>>> 102% financing...
No Monthly mortgage insurance...double plus for this one.
Low rates ..typically
The appraisal is done FHA...which protects the buyer
You don't have to be rich to buy a house.
You don't have to have 3 tradelines.(lines of open credit)
you don't have to have 3 credit scores...one will do just fine
you don't need reserves in the bank
you can still get a seller credit for closing costs...
it's an easy clean cut no mess file..really.
I love rural housing loans. Sure, not every client fits in one, but they are great deals. If you have an experienced loan officer, that does them. You should be in good hands.
They have gotten alot more lenient and less scary.
I don't think you would have much to worry about with an RHS loan.