Those that know me know that I advocate fully understanding ones short and long term goals when buying a home and considering how much to put for a down payment, or whether to make one at all. Through proper analysis and understanding of ones fiscal goals and knowing how long one intends to inhabit the property they are purchasing as well as being on the same page with their co-borrower (if they have one) is key when deciding on the specifics of how their mortgage will be structured. This article is not meant to hype or pitch 100% financing. It is simply to notify readers that for qualified applicants 100% financing is very much alive, despite what the rumor mill has or how some people feel about the practice.

 Through USDA Rural Development guaranteed financing, approved buyers in areas other than cities and densely populated towns can still get mortgage financing with no down payment. This is a very strong resource particularly for first time buyers, but also for many others.

Here are some basic features of USDA Rural Development home financing:

- No down payment required AND no monthly mortgage insurance

- Flexible credit score guidelines (scores down to 620)

- Closing costs can come from any source including gifts and limitless seller contributions. Approved applicants can even get reimbursed at closing for their inspection, appraisal and hazard insurance costs

- Competitive fixed 30-year rates that are as good as or better than any program anywhere

- Minor property improvements up to $10,000 can be rolled in

- Again, no monthly mortgage insurance payments. This saves the buyer a lot of money! Mortgage insurance raises your monthly payment, which REDUCES the amount of a home loan you may qualify to purchase. USDA Rural Development mortgage loans may allow you to qualify for a newer or larger home to meet your needs! 

Applicants must be able to prove their ability to repay the mortgage by showing a 2 year history of employment and income. Applicants must not have excessive debt that constrains their affordability. Other simple, make-sense criteria and guidelines will apply.

Let's take a look at a $180,000.00 purchase in the suburbs or outward. Properties in cities and densely populated areas are ineligible. (You may be surprised however to learn that this program does not require that you live next to a haystack! Suburban areas just outside most city limits are eligible!) USDA Rural Development mortgages carry a "guarantee fee" of 2% and it must be paid up front (that's why there's no monthly mortgage insurance), and it can be rolled into the loan (borrowed), so the total amount borrowed would be $183,600.00. At an interest rate of 5% which is today's average for a loan of this type (averages as of May 2009*), the buyer's payment would be about $1360.00 and that's with taxes and hazard insurance. For those that it makes sense for and when properly structured, this type of financing is perfect!

Don't forget, though; if you would like to look at listings of this type and see if they are USDA Rural Financing eligible, you must have your affordability index and qualifications thoroughly examined and be fully pre- approved by an expert first, so have me do your full pre-approval and analysis and I then will put you in touch with one of the best Realtors in New Hampshire. They truly have the inside scoop on bank-owned and a number of other motivated deals in your area!

As always, I'm here to help!

To fill out a secure online mortgage application please visit:

http://www.saramortgage.com/apply.asp/Hollis/New%20Hampshire

Or if you wish, simply call me to do the application by phone or make an appointment to visit me!

Jamie Woods  ~ Senior Loan Officer ~ FHA/VA/USDA Specialist ~ SARA Mortgage & Financial, LLC ~

Office: (603)-816-0255            Cell: (603)-965-8241       email: jamie@saramortgage.com

web: http://www.mortgagemagician.blogspot.com

For the USDA Rural Development Rural Financing home page visit:

http://www.rurdev.usda.gov/rhs/sfh/GSFH_Information/individuals.htm#Eligibility_criteria

* This rate average is a statistical memo, not a quote! All applicants must fully apply and qualify. Interest rates are subject to change based on market activity and economic trends.

Licensed by the New Hampshire Banking Department. License #'s 11303-MBR & 11321-MHB.
State specific disclosures reflect only the states in which SARA Mortgage conducts or is licensed to do business.
Massachusetts License # MB4274-We arrange but do not make loans.
Maine License # CSO8825.