The majority of homes across the States are financed by some type of mortgage arrangement. There are, of course, different schemes for different areas and it all varies state by state to some degree. Government-backed schemes tend to focus on deprived or less-dense areas where there is a focus on stabilization and regeneration. Rural property has definitely seen a rise in interest over recent years, and there are certain things to know before you begin the mortgage process if you are hoping to secure property away from the hustle and bustle.
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Is a Rural Property Mortgage Different from an Urban One?
The biggest, most noticeable difference between rural and urban properties is that the rates may be higher. Mortgage lenders tend to put higher restrictions and conditions on rural properties. There are lots of factors that influence the underwriting process and decision strategy. For example, rural homesteads may have less chance of being financed in the context of a mortgage if there is no reliable water main nearby for emergency vehicles to tap into. This obviously increases the risk of a fire raging out of control and so on. There are lots of factors like this that influence the process, and rural property tends to just be a bit more expensive than urban property in a lot of areas as well which initiates a natural interest rate and price increase on the mortgage side of things.
Finding a Mortgage Lender
Whether you are looking for mortgage lenders in Ohio for a farm or just to have a bit of land outside of the main cities, or a rural haven in a different state, a mortgage lender is going to be necessary. When exploring the different mortgage lender avenues, you must consider all the options before settling on a contract. Where one company offers a certain rate, a different company may assess differently and offer a more affordable one, for instance with lower interest. What are the main things to look for when deciding on your lender?
Interest Rates and Repayment Schedules
The first thing to look at is what kind of interest rates you are eligible for. Depending on your credit profile, repayment history, and employment status there will be varying stipulations that are always down to individual circumstances.
Early Payment Options
If you did want to pay a chunk of your mortgage off outside of your standard payment schedule, some mortgage lenders enforce a fee or similar to process. Generally, it’s good to have the option of a fee-free, penalty-free early repayment just in case.
Spotlight: USDA Rural Development Guaranteed Housing Loan Program
The USDA (United States of America Department of Agriculture) is a really good option for first-time buyers looking for rural property. This government-backed scheme has certain regulations attached but is actually a viable option for a mortgage on agricultural or other forms of rural land with lower rates.
Finding a mortgage on a rural property is a little different to find one for the inner city. Navigating these risks is simple enough, as long as the official channels and processes are observed.