If you are interested in investing for a home in the rural or suburban area, with minimal investment and down payment, then you need the USDA Loans PA uses most. USDA Loans are supported by the U.S Department of Agriculture and are designed to cater to people living in low to moderate-income households.
USDA loans offer competitive interest rates, affordable payment solutions, and 100% financing on your property. For many homebuyers, this is an ideal option.
Who is Eligible for USDA Loans?
The USDA loans program is designed for potential homeowners who can either buy or build a home. It also caters to the needs of existing homeowners who need to rebuild or renovate their homes in rural or suburban areas. Although many programs serve the same purpose, this loan option is specially designed for those people with low or moderate-income.
USDA borrowers must be citizens of the U.S. or can be non-citizens who are legally permitted to borrow loans.
A borrower is eligible based on the following criteria:
● Has a minimum FICO score of 640
● U.S Citizen or permanent resident
● Seeking eligible property in a rural or suburban area
● Meets applicable household income limits for the area. You can check income eligibility with a USDA Loans Philadelphia broker.
● Seeking to refinance the loan
● Monthly payment is 29% or less of monthly income.
Types of USDA Loan Programs
The USDA home loan programs are divided into three categories: Loan Guarantees, Direct Loans, and Home Improvement loans and grants.
These loans offer many benefits.
● No down payment
USDA loans give you the option of buying a home at 100 percent finance. This applies to both first-time and repeat homebuyers, and is great for first-time buyers. By contrast, borrowers are mandatorily required to supply a minimum of 3.5 percent for an FHA Loan and 5% for conventional loans.
● Competitive interest rates
When you search “USDA Loans Near Me,” you will notice that many conventional financing options have higher interest rates. USDA loans are different. Also, the interest rates do not vary as per the credit score or down payment.
● Flexible credit guidelines
Most lenders look for a 660-credit score as a minimum. However, you will need something closer to 720 for a reduced interest rate in conventional programs. With USDA loans, you need to have a score of 640 or higher to be qualified. Borrowers who have minimal credit scores can be eligible for USDA loans using their manual underwriting.
● Low monthly mortgage insurance
With a conventional loan, you need to pay private mortgage insurance if you do not possess 20% of down payment. USDA loans do not have private mortgage insurance. Instead, they have two fees - upfront guarantees and annual fees. The upfront fee is 1 percent of your total financed amount, while the annual fee is 0.35 percent.
● Can own another property
It is applicable in certain circumstances. A customer can apply for a USDA loan and own additional property. A previous USDA loan cannot finance this additional property.
● Favorable loan terms
The USDA loan is available for fixed durations like 30 years and 15 years.
● No pre-payment penalty
While working with a bank, you may get penalized for paying too early. With USDA loans, you have the flexibility to pay it earlier without any issue of penalty.
So don't worry about your dream house. The process is simplified with USDA loans. Do your research and see if you are eligible for USDA loans. Remember: applying for a mortgage requires extensive documentation. Get in touch with mortgage experts at Latitude Financial today.
550 State Road, Suite 103, Bensalem, PA 19020
Contact Us: 215-600-1810
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