10 Tips for First-Time Rural Homebuyers
Taking the plunge into homeownership is both exciting and overwhelming. 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. Buy your first country home with confidence with these 10 tips for first-time rural homebuyers.
1. Build Up Your Savings
You want to make sure you have a healthy balance in your savings account to cover expenses such as closing costs, a moving truck and a down payment. However, with Compeer Financial’s First-Time Homebuyer Program, eligible buyers can receive a zero percent down payment option and save thousands of dollars upfront to purchase their dream rural property.
2. Review Your Credit Health
A good credit score can help you save money on a rural mortgage, so it’s an important factor in your homebuying journey. To boost your credit score, make on-time loan payments and pay down any recurring debts, such as car loans, student loans and credit cards.
Not sure what your credit score is? Use Annual Credit Report to check it for free and see your full credit report.
3. Know What You Can Afford
Buying a country home is about more than just the purchase price, especially if you plan to farm or use your rural 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 rural homeowner, you’ll have ongoing expenses with the upkeep of your house and any outbuildings, property taxes, utility bills, insurance and more.
4. 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 in the country 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 rural properties.
5. Gather Your Loan Paperwork
A great way to prepare for the rural mortgage process is to get your paperwork in order ahead of time. To qualify for rural home financing, you will likely need W-2s and tax returns to show proof of income, 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 country home.
6. Familiarize Yourself with Utilities
When considering a rural property, take a moment to check the condition of its utilities. This includes the well and drinking water system, septic system and heating system. By knowing the state of a property’s utilities, you can make a smarter decision for your budget and lifestyle.
7. 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 for references and how long they’ve worked in the area.
8. Explore Rural Home Mortgage Options
When it comes to rural home loans, you’ve got options. There’s 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.
9. Understanding Fees and Features
Compare mortgage fees and additional expenses when shopping for rural mortgages to avoid 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. Compeer’s First-Time Homebuyer Program does not require PMI or a 20% down payment, making it a great choice for first-time buyers.
10. 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. We at Compeer Financial understand the complexities of rural home financing and rural life. Whether you’re buying a large and fully operational farm or a small and undeveloped plot of land, we help rural buyers find their forever homes.
Chasing your dream of living in the country can feel overwhelming as a first-time rural homebuyer, but with these tips you can start to feel excited again. Begin your homebuying journey with Compeer Financial. Check out our mortgage services today!
Ready to settle down with no money down? Join us On Demand for our First-Time Homebuyer Webinar!
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