If you want to buy a house and do not have a lot of money to put down on it, you may want to consider looking into a USDA home loan guarantee. This is a loan option that is great for certain situations, and it offers a lot of benefits to borrowers. Here are several important things to understand about USDA loans.
What is a USDA loan?
USDA loans are issued by the U.S. Department of Agriculture. These loans are backed by this department and offer a lot of benefits to people who want to buy a house. In exchange for the benefits of these loans, there are fees you will have to pay, and this typically involves two different fees.
The first is a one-time fee charged by a percentage of the cost of the house, and this is something you must pay upfront. The other fee is a percentage you pay each year on the principle balance you owe. To get the specifics of this, you will need to talk to a mortgage lender.
What are the benefits of it?
There are several key benefits of USDA loans, and the main one is that they do not require down payments. If you qualify for a USDA loan, you will have the ability to borrow 100% of the purchase price of the house. You will not have to put money down on it, but you can if you have some you would like to use. The other benefit is that they offer competitive interest rates to borrowers.
What does it take to get approved for a USDA loan?
There are several different conditions that must be met for a person to qualify for a USDA loan, and one of the main ones is that the house purchased must be located within a rural area. In fact, you will need to get the house approved before you can find out if you can get a loan to buy it. You will also need to have a decent credit score. This loan option is not available to people with low credit scores, and this typically means your score will need to be 620 or higher to qualify.
Getting a USDA loan is a great option for some people. If you would like to find out if you can get approved for this type of loan or another type, contact a mortgage lender today to begin the application process.