With most loan products offering 100% financing disappearing with the downturn in the housing market, many home buyers with little to no cash for a downpayment or closing costs have had a harder time finding loans that they can afford. For many people in this situation, a USDA Rural Development Loan may be the answer for them that will provide a pathway to home ownership.
The loan program is offered through the United States Department of Agriculture and is intended to foster home ownership in rural areas for families with low to moderate incomes. While both location and income limits exist, the areas covered and the maximum incomes allowed may surprise you.
The loans offered are for 100% financing with buyers being able to accept up to 6% from the seller towards closing costs and prepaid items such as taxes and insurance.
In addition, the program does not require the borrower to purchase PMI (private mortgage insurance) further saving on the costs to the buyer.
Many homes for sale are in eligible areas that are in close proximity to major urban metropolitan areas and corridors, the New Orleans area included. For instance, areas in both St. Bernard Parish and Kenner are eligible, as well as most of St. Tammany and surrounding Parishes.
Income limits are set generously at 115% of median income for the area. Income limits for the New Orleans area are for a family size of: (1)=$49,550; (2)=$56,600; (3)=$63,700; (4)=$70,750; (5)=$76,400; (6)=$82,050; (7)=$$87,750; and (8)=$93,400.
More information about rural development loans may be obtained by visiting the USDA website at: http://www.rurdev.usda.gov/
Friday, March 20, 2009
Saturday, March 14, 2009
Now is a Great Time to Buy a House!
With all of the negative news surrounding us these days, from the collapse of the housing market to the latest unemployment figures, many of us assume that now is not the best time to make an investment in real estate. In all actuality, just the opposite is true! Now is the time to buy! And for a variety of reasons.
Reason #1: Pricing is Fantastic! Prices are lowest they have been as New Orleans area housing inventory remains high and home buyers continue to be in the driver’s seat. This is true in many markets, and is especially seen in our St. Tammany/Northshore market where there continuues to be a surplus of subdivisions offering builder-developed new home stock. Considering these housing market trends, will prices go lower? Truth is, nobody's crystal ball works well enough to know, but this next statement you can take to the bank: by the time you know that the prices have bottomed out, they will have already risen significantly. In other words, if you wait, you may miss the boat.
Reason #2: Interest Rates Are Low! Can they get much lower than 4.265%? These 4+% interest rates won't last forever. In these uncertain times, the Federal Reserve can change course on a dime, costing you thousands in interest payments on a home loan!
Reason #3: Enjoy Benefits of Home Ownership! All the advantages of home ownership still exist. It is a forced savings plan as you build equity with each payment on the principal. You pay yourself, not someone else. It will more than likely be your biggest savings vehicle. Interest on your home is still tax deductable by the government, so rather than paying taxes, you are building wealth. It is an investment that increases in value even as you build equity while paying down the note and still increases in value (over time) even after the investment has finished being paid for.
This is called a buyer's market for a reason, not a waiter's market or a lookers market. With home prices down, inventory high and interest rates low, now is a great time to buy a house!
Reason #1: Pricing is Fantastic! Prices are lowest they have been as New Orleans area housing inventory remains high and home buyers continue to be in the driver’s seat. This is true in many markets, and is especially seen in our St. Tammany/Northshore market where there continuues to be a surplus of subdivisions offering builder-developed new home stock. Considering these housing market trends, will prices go lower? Truth is, nobody's crystal ball works well enough to know, but this next statement you can take to the bank: by the time you know that the prices have bottomed out, they will have already risen significantly. In other words, if you wait, you may miss the boat.
Reason #2: Interest Rates Are Low! Can they get much lower than 4.265%? These 4+% interest rates won't last forever. In these uncertain times, the Federal Reserve can change course on a dime, costing you thousands in interest payments on a home loan!
Reason #3: Enjoy Benefits of Home Ownership! All the advantages of home ownership still exist. It is a forced savings plan as you build equity with each payment on the principal. You pay yourself, not someone else. It will more than likely be your biggest savings vehicle. Interest on your home is still tax deductable by the government, so rather than paying taxes, you are building wealth. It is an investment that increases in value even as you build equity while paying down the note and still increases in value (over time) even after the investment has finished being paid for.
This is called a buyer's market for a reason, not a waiter's market or a lookers market. With home prices down, inventory high and interest rates low, now is a great time to buy a house!
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