A Deeper Insight Into The USDA Loan And Its Benefits
Taking out a mortgage is certainly not an easy thing: this is a long-term decision that requires you to have a good credit and a stable source of income, in order to repay your mortgage. Fortunately, this is where the USDA home loan steps in and changes the rules of the game, thus allowing you to take out a loan quickly, effortlessly and without the hassles. Here you will find out more about it.
“Never let the odds keep you from doing what you know in your heart you were meant to do.” — H. Jackson Brown, Jr.
A Brief Overview Of The Loan
The first question on everybody’s lips is: what is the USDA loan? In a nutshell, the USDA loan, also known as the Rural Housing Loan or the Section 502 loan is a special type of loan that is insured by the Department of Agriculture of the United States of America.
One of the many aspects that make this loan stand out from the rest is the fact that it offers a “no money down” financing option. The USDA loan allows you to finance the entire price of your home, while getting full access to mortgage rates that are better than the average. This type of loan is suitable both for repeat home buyers and for first-time buyers, and no counseling is required prior to applying for the USDA program.
A Closer Look At The Benefits
What are the advantages of using a USDA mortgage? In addition to the great mortgage rates and the lack of a down payment, the USDA mortgage also features highly competitive, 30-year long fixed interest rates. These fixed rates allow you to repay the mortgage regardless of the fluctuations that are so common in the real estate industry. At the same time, the USDA loan also features flexible credit guidelines: although you still need to provide a credit history report, you are eligible for a mortgage regardless of whether it is good or bad. Also, the USDA loan income limits vary based on the size of the household. For 2014/2015, the limit for a 1-4 member household is of $74,750 while the limit for a 5-8 member household is of$98,650
Last, but not least, there is no maximum purchase price to worry about. The USDA Rural Development Program has not set any maximum price, although the lender itself will determine the amount of loan you are allowed to take out, as it is important for the lender to make sure that you are able to repay it within the established time frame.
Additional Information About The USDA Loans
USDA loans: information and FAQ. Who Can Use The USDA Loan Program?
Everybody can use the USDA loan, as long as they are employed (self-employed applicants are eligible as well). You will need to provide a 24-month federal tax return proof in order to verify your income.
Is The USDA Loan Program For Residential Property Only?
Yes, not for commercial or industrial properties of any kind.
Are There Any Adjustable Rate Mortgages?
No, the Rural Housing loan is available in the form of a 30-year fixed rate mortgage or as a 15-year fixed rate mortgage, as of September 2014.