If you are considering obtaining a rural development mortgage, then you should compare your options, because there are a few types from which to choose. Though most have roughly the same advantages to homebuyers, you should first find out what they are to ensure they would benefit you. Another important step is to find out the qualifications you must have, such as income requirements. The house itself also needs to qualify for the rural development mortgage that you want, so you will need to be sure it is in the right area and has a price you can afford.
You should first make sure the particular mortgage's terms appeal to you, because you may find that other loan options suit you better. In most cases, a rural development mortgage does not require a down payment, so you can avoid spending years saving up to buy a house. In addition, the typical loan of this type does not require mortgage insurance, which means you can save a bit on your monthly payment when compared to other home loans. You can usually count on a 30-year fixed-rate mortgage; if you prefer a shorter term, then you may need to choose a different kind of loan. Additionally, interest rates on rural development mortgages are usually quite low, so a loan with an interest rate that seems higher than average may be an indication that you should look elsewhere.
Though rural development mortgages are usually more lenient than other types when it comes to buyer requirements, you should make sure you qualify before you choose one. For example, one type of rural development mortgage is primarily for those with low income, so you need to be below the median income for your area to qualify. There is, however, another type of rural housing loan that is best for those who make about the median income, or even slightly more. You also typically have to meet credit requirements and have enough income to pay all your other bills, though the minimum numbers for both of these conditions are somewhat low compared to other loans. You should check with your lender to find out the type of rural development mortgage for which you qualify.
Additionally, you should make sure the house you want is eligible for a rural development mortgage. Though your house does not necessarily need to be far away from major cities, it does need to qualify as an eligible location, which you can ask your lender or real estate agent about. In addition, there may be other requirements in place, such as the condition that you need to keep the house as your primary residence rather than a rental property. The loan amount also often matters when determining the rural development mortgage that is best for you. Though there is not necessarily a maximum loan amount, you do need to have a decent debt-to-income ratio, which means you likely cannot get a loan for an expensive house if you do not make much money.
