USDA Rural Housing Loan

Georgia Mortgage Rates for December 4th, 2009.  

Since November 9th, mortgage rates have continued to drop.  November 25th mortgage rates hit an all time low at 4.375%.  For the past 6 days straight, mortgage bonds have worsened and worsened causing mortgage rates to climb every single day.  Did we see this coming?  YES!  Will rates continue to tick higher?  YES!  Will we see 4.375% again?  Most likely not.  Although, wouldn't it be nice to refinance your 5.5% (extremely high rate loan, HAHA) into another low 4.5% loan?  YESSSS!  Contact your local mortgage lender and check to see if refinancing is a good option for you.  If the rates have ticked too high to benefit you, then go ahead and apply and if rates drop once again, then you will be ready to attack!

Rate Lock Advice and Mortgage Market Update.

USDA Rural Development is a fantastic avenue for to obtaining a mortgage in the United States.  Guaranteed Rural Housing Loans allow a home buyer to finance up to 102% of the appraised value, pay NO Private Mortgage Insurance (PMI), and have the lowest possible payment for a 30 year fixed rate mortgage!

USDA Rural Development Benefits:      

• Loan-to-Value:  Can finance up to 102% of appraised value.
• Guarantee Fee:  One time fee of 2% of the loan amount.  It is usually financed.
• Cash to Close:  Very little or zero cash needed to close in most cases, no minimum contributions.
• Mortgage Insurance:  NONE what so ever!
• Term:  30 Year Fixed Rates only
• Interest Rates:  Rates are typically in line with conventional and FHA rates. 
• Property Location:  Must be located in eligible "rural" areas.  Go to USDA Property Eligibility to see if an address qualifies.  If the site cannot find the location, then I can do a manual search for you.  New construction usually do not show up, but they do qualify.
  
• Household Income:  Must verify all income of all household members.  The adjusted total cannot exceed USDA Rural Development's Income Limits.  You will be surprised by how much the limits are for your county.  Generally, the income limits for USDA Rural Development range from $70,000 to $105,000! 
• Credit Scores:  USDA Rural Development requires a borrower to have a middle credit score of 620.  Credit qualifying is very linient and similar to that of FHA (Federal Housing Administration). 
• Derogatory Credit Items:  Cannot not have any federal tax liens or judgments.  Cannot have a foreclosure within 3 years, a Chapter 7 Bankruptcy with 3 years or a Chapter 13 Bankruptcy within 1 year.  Also, applicant must not have any 30 day or more late payments on a mortgage within the most recent 12 months.

USDA Rural Development is a division of the US Government that was established to help families achieve home ownership.  USDA home loans are fully backed and insured by the government and are the absolute best way to obtain a no down payment loan.  These Guaranteed Rural Development loans are cut and dry.  They are fixed rate loan programs with no fine print or deceiving terms.

APPLY NOW for a USDA Rural Development Home loan.

You may also visit USDA Loans for more information!

USDA Rural Housing Loans are the best way for an individual or family to build wealth, earn the first-home buyer tax credit, and have affordable payments!  Obviously, the real estate market has many great deals.  For those that have the money, there are so many opportunities.  So, are the wealthy the only ones that can afford to take advantage of all the fantastic deals out there. NO!  Typically, for an investor to purchase a property at a foreclosure sale, or at the court house steps, they must have cash on hand to purchase the foreclosed property.  Or, if an investor plans to purchase a home to flip or to create cash-flow as a rental, then they typically need 20-25% down to get a loan.  For the general public that is interested in real estate investing but does not have the cash on hand to pursue it, then what can you do?

For those that are looking to get their feet wet in real estate, then now is the time.  There are tons and tons of reasons to buy today.  Add up all of those reasons and add one more thing to it.  USDA rural housing loans in Georgia, Alabama, Florida, South Carolina and North Carolina are taking off.

With a USDA Rural Housing Loan, a buyer of a primary residence can buy a new home or foreclosure with zero investment.  So, buyers and Realtors need to search for properties that have lots of equity in them.  Believe me, they are everywhere.  Once you find this particular property, I, Justin Messer, can help the buyer obtain mortgage financing for a 100% loan.  With this type of loan, the buyer can finance 102% of the "appraised" value.  They are not limited to the sales price.  They can also finance all of the closing costs, all of the pre-paid items, and any necessary repairs. 

EXAMPLE:

You and your real estate agent find a home that is for sale at $100,000.  Well, this property has been for sale for over a year and has been marked down 4 times.  The appraised value is currently $150,000.  I can give you a loan for the full $100,000 to buy the house.  USDA charges a 2% funding fee.  This is 99% of the time financed.  So, now you are up to $102,000.  Say closing costs are $3500 and pre-paids are $1000.  Lets also say that you would like to add a few touch-ups.  The touch-up costs are $5,000.  So, you are going to finance the full sales price, the 2% funding fee($2000), the closing costs ($3500), the pre-paid items ($1000), and the repairs ($5000).  You, the buyer, are financing $111,500.  Once you close on the home, you have instantly picked up $38,500 in equity for absolutely NOTHING.  You have merely found a house you would like to live in, signed your name, and receive tons of equity.

This is only the beginning.  For this loan, the current USDA mortgage rates are at 5%.  The monthly payment via the mortgage calculators from www.JustinMesser.com are $565.  If taxes are $150 and home owner's insurance is $35, then the total monthly payment is $750.  It is extremely hard to rent a home for as cheap as $750.  Also, there is ZERO MORTGAGE INSURANCE!  In this market, sellers are usually willing to contribute something.  The seller can buy your rate down for the first two years.  So, the first year, your rate could be 2.5% with a payment of $625.  The second year, your rate would be 3.5% with a payment of $685.  The 3rd year through 30 would come back to the original $750.

Last, the real estate market is on the verge of bouncing back.  History will prove that immediately after any downturn in housing, it always explodes higher.  So, to make your ZERO investment even better, I would suggest keeping the home for a couple years.  Now, you will be able to take advantage of yearly real estate appreciation and TAX FREE profits.

This is a fantastic way for a person that is looking to buy their first home or their primary residence to enter the real estate investment market and contribute nothing.  My advice would be to follow this scenario, build wealth, and save your money and invest it somewhere.  Live in the home for at least two years.  Sell the home and collect your TAX FREE profits.  Do it again.  If you did this every 2 years, with the same numbers in the example, then you would earn around $115,500 in 6 years.  This is approximately $19,250 a year.  These profits would actually be much greater because I am not including any appreciation, any principle reduction from making your mortgage payments, or any tax write-offs. 

I almost forgot, if you purchase a home as a first time home buyer by November 30, 2009, then you will get a $8,000 tax credit next tax season.

For more information on the USDA Rural Housing Loan, please contact me at www.JustinMesser.com/contactus.  You may also contact me to see about refinance mortgage rates.  Email me at JustinMesser@Northstarmg.com.  This post may be viewed on www.Wordpress.com, or www.JustinMesser.com/myblog.