Buying a home can be stressful, especially if it’s your first time purchasing. Preparing yourself ahead of time with the correct questions will help you know what to expect and ease concerns. Asking the right questions will also help you find the lender that works best for you and your needs. Lenders at SmartMortgage are […]
How a Home’s Location Affects Your Standing with Federal Loan Services
Before you decide on the location for your new home, you need to ensure that it won’t affect your ability to obtain a home loan in Kansas City. Federal services or loan providers both offer home financing, but there are a few restrictions on whether or not you can obtain it:
- Loan limit
- Flood zones
- Property is below minimum standards
Ask your loan officer to give you detailed requirements and stipulations for using a government backed loan to purchase a home.
Monetary limits for different home loans in Kansas City vary depending on the location of your chosen property. Depending on where your desired property is located, the loan amount may be outside of the conforming range. If so, the price of the home is too high and you aren’t eligible for traditional financing.
If the home is too expensive, you may have to opt for a jumbo loan which are typically for properties and loans over $417,000. You will also need a larger down payment in order to be approved for this type of home loan in Kansas City.
Since buying a home in a flood zone is a huge risk, the cost of financing and insuring your home is higher than a property that is not in a flood area. Some federal loan programs will not allow borrowers to purchase a home in flood zones or will require additional insurance and agreements.
If you choose to challenge the location on a flood map, you will have to send a letter to FEMA and hire a surveyor. They will to assess and determine the risk to the property.
Properties Below Minimum Standards
For many first-time homebuyers looking for home loans in Kansas City, FHA mortgages are a good choice. FHA loans make it easier for borrowers to qualify for a mortgage, but they don’t necessarily make it easier to buy a property.
While these neighborhoods are more likely to have affordable homes, properties in underdeveloped or low income neighborhoods may not meet FHA minimum standards. If a home fails to meet the minimum property standards, your loan may be declined for that particular property.