Carol-Ann Palmieri & Al Mussi's Blog
The US government has been helping Americans achieve their goal of homeownership for decades. Through programs offered by the Federal Housing Authority, the USDA, and the Department of Veterans Affairs, millions of Americans have been able to afford a home who would have otherwise struggled.
The focus of today’s post is one such service: loans offered through the USDA Rural Development program.
If you’re hoping to buy a home in the near future but are worried about being able to save up enough for a down payment or build your credit score in time, USDA loans could be a viable option.
Let’s take a look at some of the common questions people have about USDA loans:
Do I have to live in the middle of nowhere to get a USDA loan?
The short answer is “no.” rural development loan eligibility for your area is laid out on a map provided by the USDA. Most of the suburbs outside of major cities, as well as nearly all rural areas, are covered by the rural development program.
Can I qualify for a USDA loan if I’ve previously owned a home?
Yes. You may be eligible for a loan as long as you’re not the current owner of a home that was purchased through the rural development program. So, for example, if you own a home financed through the USDA and wanted to buy a second home and rent out the first one, you wouldn’t be able to finance your second home through the USDA.
How does the USDA loan guarantee work?
When you buy a home, a lender asks you to make a down payment. If you don’t have a down payment, the government (USDA, VA, or FHA) insures the down payment on your home rather than you paying it up front.
Will I have to pay mortgage insurance?
Unlike other subsidized loans, rural development loans require a “guarantee fee” rather than PMI (private mortgage insurance). The guarantee fee is 1% the total mortgage amount and this can typically be financed into the loan (so you don’t have to pay up front). In addition to the guarantee fee, USDA loans also charge an annual premium for the lifetime of a loan.
What are the qualifications for a USDA loan?
To find full eligibility information, complete the survey on the USDA’s eligibility website to find out if you qualify. However, the general qualifications are:
Buying a home in a qualifying area
24 months of income history
A credit score of 640 or higher for streamlined processing
Income high enough so that your monthly payments do not exceed 29% of your monthly earnings
What is the direct loan program?
The USDA really offers multiple urban development loans. The guarantee program, for which most single families utilize, and the direct loan program. Direct loans are designed for families who have the greatest need. You can also find out if you’re eligible for a direct loan by filling out the questionnaire on their website.
If you decide that moving on your own isn’t for you, you need to find and hire good movers to get you from place to place. You can start with a simple internet search, but you need to find the right movers to be able to get dependable service. Below, you’ll find some tips to help making the process of finding a moving company that much easier.
Get Quotes From A Few Companies
Get quotes on prices from a few different moving companies. Don’t just go with the first company that you find. Do a bit of research and even see if you can get some type of a background check on each company that you get a quote from. This way, you’ll avoid any nightmare stories from your move.
Have A Mover Do An Assessment
Your movers should come and visit your home before you move. Will they be packing for you? Do They need a larger size truck? If the moving company comes to make an assessment of the home, they will know what needs to be done when moving day arrives. Make an inventory list of everything in your home so that you’ll know what you have to take with you. You’ll also know what you have in your new home once you get there. This can really help streamline the process.
Price Isn’t Everything
The most expensive mover may not provide much more services over the least expensive moving company. Sometimes, it’s better to pay a bit more if you get additional services like boxes or packing. If a quote is much lower than you think it should be, then you probably should be a bit cautious of hiring the company.
Look For Reputation
You need to be aware of the reputation that a moving company carries with them. If you’re moving locally, you can usually go with a local company that has some good reviews. If you’re moving across states, try and find a larger company that has a lot of experience and a reputation built up for those types of long-distance moves.
You’re paying a lot of money to hire a moving company and have a right to know exactly what you’re paying for. Make a list of questions to ask each company. Find out their protocols and understand how your things will be treated. You want to know that your items will be in good hands. Some things you’ll want to know about each moving company:
- What kind of insurance do you have?
- What types of fees do you have?
- What’s the timeline for my move?
- Have all your movers undergone background checks?
If the company tends to avoid certain questions, you should beware. With a little research, moving both near and far will be a breeze.
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