Alabama Teachers have many great home financing options available that offer little to no down payment. One of the most popular Alabama teacher home buying programs remains the 100% USDA Rural home loan. USDA Rural Housing is one of the last mortgage programs that still allow Alabama teachers to purchase homes with no down payment. USDA mortgage qualifying is easy – no down payment assistance grants needed, no special first time buyers class or long application process. Let’s take a look at some details below and the things that teachers should know before starting the USDA pre approval process.
First, the USDA 502 Guarantee mortgage is backed by the Federal Government and offers secure 30 year fixed rate terms.
- The USDA housing program is 100% financing and does not require any down payment. This is great because most Teachers are first time home buyers. Home buyers can elect to put money down if they choose to reduce their loan amount / mortgage payment. Since the program is 100% financing, no down payment assistance or special grant is needed. No schooling or “first time buyers class” needed as well. You can get pre approved this morning and write an offer on a home this afternoon.
- The USDA RD mortgage also allows for the home seller to pay the home buyers closing costs. Teachers can purchase a home with little to no money out of pocket.
- USDA Rural Housing is perfect for any Alabama public service workers like Teachers, Police and Firefighters that want to live in more rural locations around Alabama.
Teachers want to remember a few things before applying for the USDA housing program:
- First and foremost, please read through all the USDA purchase FAQ’s here. This information in the link will help you understand all the aspect of the USDA loan. It’s everything you need to know about the USDA mortgage in one place
- If you have student loan debt, all the debt will be included in the qualifying process – even if the student loans are in currently in deferment. This is important as it can have an impact of how much housing expense you qualify for.
- USDA does have a two key components in regards to eligibility – where the home is located, and the income for the household. You can check the USDA housing map here, and check the USDA household income limits here. Even many popular locations in and around Birmingham, Montgomery, Mobile, Huntsville and Tuscaloosa are still eligible.
Being Prepared: The home buying process is a very important decision, so it’s not a bad idea to be prepared well in advance. Even if you are still three months or more away from purchasing, the USDA Rural Housing loan qualifying tips below should come in handy to insure you are ready when the time is right.
How is your credit?: Be sure to take a look at your credit report for any inaccuracies. Take care of any outstanding collections from the past, in many cases these creditors will settle out for a reduced amount. It’s also important to not be late on any credit accounts you have. Remember, most lenders and banks require a 620 credit score in order to get approved for financing.
Be careful with cash: Be sure you have no random cash deposits in your bank account, especially when you get within two months of your USDA loan application. If you do, be sure they are well documented – copy of check, receipt, bill of sale, etc, if available. Most cash deposits within the last few months in your account (excluding normal deposits like payroll, IRS, etc) will need to be documented.
Moving to from someplace else?: If you are a homebuyer that is relocating you will need some extra things. For employees that are relocating with the same employer (company) – you will likely need a transfer letter from your employer stating the new address and any changes in position and income. For buyers relocating and going to work for a new employer – you will likely need to be hired, working and have received one paystub before closing. Sometimes there can be exceptions to this if you have a commitment letter from the new employer, with salary, stating there are NO contingencies. Basically this will state you have passed any pre employment requirements like training, drug testing, etc
Bank Savings: Are you planning to put money down? If so, you need to plan your saving accordingly. Even if you plan on doing 100% financing USDA loan, there are still closing costs that need to be considered. All loans like USDA, FHA, etc, require closing costs in the range of 3-6% of the loan amount. The good news is these programs also permit the home seller to pay your closing costs! However, buyers still need to have a little savings to cover upfront deposit, appraisal and home inspection if needed.
How much is the cost?: It’s smart to get a “real world” understanding on what you can expect in regards to monthly housing payment based on your price point– with tax, home insurance, mortgage insurance included. Please see the USDA mortgage payment calculator on the right side of your screen.
Applicants that have questions or what to learn more about getting pre approved can submit the Quick Contact Form on the right side. You can also call ph: 800-743-7556 or visit www.UsdaMortgageHub.com. Mobile phone users can find the Quick Contact form at the top of their page.
Serving home buyers 7 days a week across the U.S including Alabama: Mobile, Huntsville, Tuscaloosa, Hoover, Dothan, Decatur, Auburn, Madison, Florence, Gadsden, Vestavia Hills, Phoenix City, Prattville, Alabaster Birmingham, Montgomery