Many homebuyers are looking to escape to a rural property and avoid the hustle and bustle of the city. It may seem like a dream to live a quiet country life, but there are a few things to consider before taking the plunge.
1. Check the Zoning
It is vital to check how the rural property is zoned. The zoning will dictate how you can use the land, what types of buildings are allowed and the location. The property might be zoned as residential, agricultural or country residential, among other titles.
How the property is zoned can affect lenders, the amount you qualify for, and what you can do with the property. Some lenders are hesitant to finance agricultural/country residential zones due to differences in lending and foreclosure processes.
2. Property Boundaries
Once the property has been zoned correctly, the next step is to book a survey. A survey will mark the property boundaries and avoid any future controversy. Now would also be a great time to appraise the land and its value.
3. Considering the Land and your Mortgage
In most cases, lenders follow the basic mortgage formula: one house, one outbuilding and up to ten acres of land. What purchasers don’t realize is that the amount of land can drastically affect the mortgage qualification and what you can borrow. If there is extra land or additional buildings on the property that is being purchased, consider that you will need over 5% of the typical down payment.
4. Water and Sewage
Rural living can have various water and sewage options, from city water and sewage to private wells and septic tanks. Plan to get an inspection done to ensure everything is safe and working correctly and make it a condition of the purchase offer, including testing the water quality and getting the septic tank inspected. Inspections outside the city will cost more than inside the city, but having a piece of mind will be worth it. The inspection will be an essential step as lenders will sometimes request potability and flow tests.
5. Coverage Matters
Coverage becomes very important when living outside of the city limits. Here are the top two rural property coverages you should consider:
- Home insurance: It’s no secret that home insurance costs more for rural properties due to the distance from the city’s fire stations and hydrants, but it is vital to purchase.
- Title insurance: This is the other essential insurance to purchase. It will protect you from unforeseen disturbances with the deed or transfer. It will also make you aware of any improper use of the property (i.e., dumping waste).
Here are a few guidelines if you are considering purchasing a home or land in a rural area. However, there are many more things to ponder. Seek a mortgage professional specializing in rural properties and locations to make buying one easy.
Contact your local REALTOR® who is familiar with the countryside properties to aid in your search today!