10 Tips for First-Time Rural Homebuyers
Taking the plunge into homeownership is both exciting and overwhelming. And it can be even more exciting (and overwhelming!) when you’re a first-time buyer of a rural property. With so many details involved and big decisions to make, it’s important to understand the process and prepare yourself ahead of time – so you can buy your first rural home with confidence.
Here are some top tips for first-time rural buyers:
Build up your savings
Compeer Financial has a fantastic first-time home buyer program that features 0% down payment, meaning you won’t have to fork over thousands of dollars upfront to purchase your property. However, you’ll still want to make sure you have a healthy balance in your savings account to cover other expenses, such as closing costs and a moving truck.
Review your credit health
An important factor in your homebuying journey is your credit score, since a good score can help you save money on a mortgage.
Not sure what your credit score is? Check it for free and see your full credit report at AnnualCreditReport.com. Give your credit score a boost by making on-time loan payments and paying down any recurring debts, such as car loans, student loans and credit cards.
Know how much you can afford
Buying a home is about more than just the purchase price, especially if you plan to farm or use your land for recreational pursuits. Take a close look at your income, debts and goals to truly understand what you can afford. Keep in mind that as a homeowner, you’ll have ongoing expenses with the upkeep of your house and any outbuildings, property taxes, utility bills, insurance and more.
Decide on size and location
As you determine your budget, you’ll also want to have a good idea of how much land you hope to buy and where you want to live. Are you dreaming of owning a couple of acres just outside of town? Or maybe living on a larger and more remote tract? These decisions will impact your budget and vice versa, so it’s helpful to think through your needs and wants before viewing properties.
Gather your loan paperwork
A great way to prepare for the mortgage process is to get your paperwork in order ahead of time. To qualify for financing, you will likely need to show proof of income (such as W-2s and tax returns), as well as recent bank statements and records of any current loans. Gathering these documents will help you stay organized and can also help you confirm your budget for buying a home.
Familiarize yourself with utilities
When considering a property, take a moment to check the condition of its utilities, including the well and drinking water system, septic system, and heating system. You can make a smarter decision for your budget and lifestyle by knowing the state of a property’s utilities and any upkeep or repairs that may be required.
Find a trusted real estate agent
A good local real estate agent is worth their weight in gold, especially for rural property searches. They know the land like the back of their hand and can help you make connections with potential sellers and unlisted properties. Be sure to ask any real estate agent how long they’ve worked in the area and if they have references.
Explore your mortgage options
When it comes to home loans, you’ve got options! See what you like by taking a look at variable rates and fixed rates, longer terms and shorter terms, traditional mortgages, construction loans, and more. If you’re not sure what it all means, you may want to chat with a Compeer mortgage specialist. They can answer all your questions and help decide what’s right for you.
Understand the various fees and features
When comparing mortgages, you’ll also want to compare fees and additional expenses to avoid any surprises down the road. For example, if your down payment is less than 20%, you may have to pay a monthly fee called private mortgage insurance (PMI) for several years. (Keep in mind, Compeer’s first-time home buyer program does not require PMI or a 20% down payment – making it a great choice for many buyers!)
Talk to your local rural lender
When you’re ready to buy your dream country home, you’ll want to talk to a lender who specializes in rural properties. Compeer Financial helps rural buyers across Illinois, Minnesota and Wisconsin – whether you’re buying a large and fully operational farm or a small and undeveloped plot of land, we understand the complexities of rural financing and rural life.
Get in touch with a Compeer mortgage specialist to start your homebuying journey today.
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To qualify for Compeer Financial’s First-Time Homebuyer Loan Program, the property and applicant(s) must meet eligibility and underwriting requirements as determined by Compeer Financial. Borrower(s) will be responsible for certain loan and closing costs at signing. This is not a commitment to lend or extend credit. Program terms, requirements and conditions are subject to change without notice. Compeer Financial is an Equal Credit Opportunity Lender and Equal Opportunity Provider and Employer. Mortgage Account Errors, Requests for Information, and Credit Reporting Disputes: If you would like to request information concerning your mortgage account, or if you believe there is an error on your mortgage account or that Compeer Financial has furnished information to a credit reporting agency on any of your account(s) that is not accurate, you will need to send a written statement to us describing in detail the information you are requesting or the information you believe is in error or inaccurate along with your name, address, and account number to Compeer Financial, Attn: RLS Servicing, PO Box 4459, Mankato, MN 56002-4459. NMLS #619731