Living in St. Peters
St. Peters, Missouri is the ideal place to live for anyone looking to move to the greater St. Louis area. In 2008, Money Magazine listed St. Peters as the 60th best place to live in the U.S. and the absolute best place in Missouri. Since 2008, this community has continued to grow and improve even more. The median household income of a resident in St. Peters, according to a census in 2016, was $77,000, which is 33% higher than the Missouri average of just $51,000. The unemployment rate is only 3.4%, as compared to the 4.5% in the rest of Missouri. In addition, the crime rate index in St. Peters is strikingly low, only half that of the rest of the country. This low rate of crime is probably due, in part, to its high rates of education and marriage. About 95% of residents in St. Peters have a high school diploma or greater, and only 24% of the population has never been married.
St. Peters is the ideal place to raise a family. It offers every variety of schools and school options, from well-respected public schools like the Fort Zumwalt school district, to private religious schools like Lutheran High School of St. Charles County and Living Word Christian School. A quick glance at a local map will reveal a school just a mile or two from almost every neighborhood.
PMI
Any prospective homeowner, even one looking to buy a home in St. Peters, needs to be aware of PMI, which stands for Private Mortgage Insurance. PMI is insurance for the lender (usually either a bank or broker) against a potentially risky home buyer. A home buyer is considered risky if they intend to buy a house with a down payment of less than 20% the appraised value of the home. The clear implication here is that potential home buyers who can’t afford a big down payment are less financially secure and hence more likely to default on their home loans, which would ultimately be a liability for the lender. To protect against this, the lender has PMI, but unfortunately the cost of that PMI is passed onto the prospective home buyer with a low down payment. “Typical rates are $55/mo. per $100,000 financed, or as high as $150/mo. for a typical $200,000 loan.” (“Cost of Private Mortgage Insurance”). The prospective home buyer in St. Peters needs to keep PMI in mind when purchasing a home, especially considering that the median value for a home in St. Peters is $185,000. Considering the advantages of living St. Peters, this is a bargain, but the home buyer should be aware of it.
Prospective home buyers in St. Peters, especially first-time home buyers, should consider many different options when looking for a home loan. The following are just a few options.
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Check out this video where Ryan Bazzell explains PMI in more detail.
FHA loans for first time home buyers
For first-time home buyers in St. Peters with significant debt and bad credit, a mortgage from the Housing Administration might be a good option. Because an FHA loan comes with a government-backed insurance policy, lenders are able to offer these loans at a more attractive and flexible rate. The minimum credit score for a conventional home loan is around 620, whereas the minimum for an FHA loan is usually 500. Along these same lines, the down payment required for a conventional home loan is between 5% and 20%, but for an FHA loan it could be as little as 3.5% for those with a credit score of 580 or more. Of course, a 3.5% down payment on a house in the beautiful St. Peters area could be a daunting amount, particularly for those who already have bad credit, but this amount could possibly be reduced to zero by acquiring it through a gift fund or through a state or local government assistance program.
“The minimum credit score for a conventional home loan is around 620, whereas the minimum for an FHA loan is usually 500.”
VA Home Loans
Most military veterans and active military members in St. Peters qualify for a VA home loan. A VA loan is often made through a mortgage banker and is backed by the Department of Veteran affairs. Amazingly, a VA home loan often doesn’t require a down payment at all, and only the VA funding fee and the closing costs must be paid upfront. Even better, this VA funding fee can often be rolled into the loan amount, and in some cases even the closing costs will be waived entirely. For former and current military members looking to move to St. Peters, a VA home loan program is definitely worth investigation, and one way to determine loan rates is by using the VA home loan calculator.
USDA Home Loan
For some prospective home owners in the St. Peters, the U.S. Department of Agriculture is offering a program through private lenders with as much as 100% financing, which means no money down on a new house. This program is especially aimed at low-to-moderate income families in rural and suburban areas, but sometimes this definition can be broadened to include those in developing areas, even like those in St. Peters. Prospective home buyers should be aware that the USDA requires certain income limits to qualify, depending on location and house size. To determine eligibility, it’s best to check the USDA map and table.
Conventional Home Loan
Another option for potential home buyers in St. Peters is a conventional home loan. Unlike some of the programs discussed above, a conventional home loan often requires a higher down payment and better credit rating. The rules and regulations regarding a conventional home loan in St. Peters is overseen by the US Department of Housing and Urban Development (HUD) and underwritten by Freddie Mac and Fannie Mae. A down payment of at least five percent is required for a conventional home loans. In addition, a Credit Score of 620 and above is usually mandatory, but not always. Finally, a low debt-to-income ratio, usually less than 30%, is preferred by most mortgage bankers. To determine eligibility, using a home loan calculator or contacting your local mortgage banker is advisable.
Next Steps
For those looking to buy a home in the St. Peters area either now or in the near future, a variety of home loan options are available to them. The most important step is carefully deciding which home loan is right for you. Whatever your financial situation, there is a probably a loan to fit your needs. Ryan Bazzell offers the best rates on home loans and refinancing, as well as special incentives to first responders through our LOCAL HERO PROGRAM.
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