Category: Property Finance & Mortgage

Buying a home is like putting down roots somewhere. Because this is where you will most likely live for many years, choosing the right location is critical. Lots of people are drawn to the urban areas for job opportunities, but there are also disadvantages to living in these cities.

Living in the city is not as ideal because of the cramped conditions and the lack of green areas, specifically in high-density urban locations. Other things make living in these locations undesirable, including higher levels of crime, cramped public schools, and poor infrastructure. This is the reason why suburban and rural areas are becoming a real solution for lots of people.

While jobs are plentiful in the city, companies are also moving out of the urban areas because of congestion and higher costs in the metropolitan areas. This makes it more attractive for people to live in suburban or even the rural areas. In these locations, people are also part of a community and enjoy many other programs. They can truly rely on a safe, affordable, and relaxed lifestyle in these parts.

Another huge benefit in buying in these loosely populated areas is the fact that they can rely on a USDA 100% loan to help finance their house purchase. These loans are specifically available for people who want to move to these areas instead of living in the congested cities. They can find homes with enough space, as well as a nice garden to enjoy some greenery as well. These can truly be homes where their kids grow up in.

Factors To Consider When Choosing Where To Invest

The first thing to consider is lifestyle. City-dwellers enjoy easy access to night entertainment, restaurants, and other events. However, if you are not into these things and instead, you prefer to relax in your chair in the garden, reading a book, or being close to nature, then you will not find living in urban areas suitable.

Your career also dictates where you should live. Some people who work in corporate jobs and have to be in the office for long hours will not find the commute from the suburbs good. However, there are many other jobs that are not restricted to the city and in fact, working conditions for teachers, for example, might be better in suburban or rural areas.

Lastly, if you have children or if you have some health conditions, living in suburban or rural areas is recommended.

The trend of people moving to the urban areas has created places where people cannot enjoy a good standard of living, which is why it is also a good idea to move into the suburbs or the rural areas.

One of the things people worry about when getting a home is bad credit. This is because lenders always look at a persons credit scores to determine their risks in lending money to them. If you have a low credit rating, odds are you wont get approved for any home loan…but that was yesterday. Nowadays, you can get a home loan even with a poor or low credit rating.

How Do You Get A Home Loan With Bad Credit?

The answer to your question is to apply for an FHA loan. An FHA loan or a Federal Housing Administration loan is a type of loan given by the FHA to increase home ownership in the country. This is recommended for those who have low credit because the FHA loan allows people who have at least a 500 credit score to get a loan.

Of course, theres a catch. An FHA loan may give people with low credit ratings a chance to get a loan with a low downpayment if that person fits the requirements theyve set. These requirements are called compensating factors that will assure the FHA that the person has gone through a reasonable financial problem which became the cause of the low credit. An example would be a major hardship that became the cause for bad credit. Another compensating factor could be high income, no other current debts, and a long time employed with their current employer.

All these compensating factors will help assure the FHA that their loan will be paid. And when you have a lot of compensating factors checked, your application becomes more acceptable.

What Are Subprime Mortgages?

Other than the FHA loans, there are what you call subprime mortgages that allow people with bad credit to still get a loan for their home. But you guessed it again, theres also a catch.

A subprime mortgage refers to a loan that has a higher interest rate than the rates you will get if you have a respectable credit rating. At the same time, a subprime mortgage can also require you to pay for other things that will just add to the cost of the loan. This might be a bad move if you dont have enough money to pay.

Most subprime mortgages are in the form of ARMs or adjustable-rate mortgages which mean that you have a fixed interest rate for a portion of your loans life and after that time has elapsed, the interest rates will start to vary.

So, as you decide to take a home loan weigh-in these catches so that you are sure you are still getting a good deal in spite of a bad credit rating.