The biggest hindrance while planning for home buying is the down payments. Most first time buyers as well as those having limited income face problems while arranging the down payments and then there are high interest rates, PMI (private mortgage insurance), closing costs to be taken care of. As a resident of Amarillo looking for a new home, if you’re facing similar challenges, you can avail USDA home loans to get easy financing for your home buying needs
How can USDA home loans help you?
USDA home loans are the most affordable and convenient loan programs which support people belonging to the low to moderate income groups. It is also beneficial for people who want to relocate to rural areas or are already living in one. USDA loans are the home loan options that gives you the advantage of zero down payment, low interest rates and 100% financing.
The United States Department of Agriculture is responsible for setting up the guidelines for these home loans and this is the reason why these loans are also known as the USDA Rural Development (RD) Loans. Being one of the most cost-effective loan programs, it helps in reducing the costs of home buyers in the rural and suburban areas. Millions of people are residing in their own homes and if you want to join them, consider a USDA home loan.
Enjoy low monthly payments with USDA home loans
One of the biggest advantages of USDA loans is that the monthly payments are very affordable because of the fact that interest rates are low, there is no PMI and the guarantee fee is also minimal. Compared to other conventional loan programs, USDA is the most affordable.
The risks involved for the lenders are much lower in case of USDA loans since the government approves the loans and in case of defaults the government would be responsible to make up the loses. Even then there should be something that secures the lenders. People borrowing from USDA are required to pay a monthly mortgage insurance and a guarantee fee that can make up a little on the lender’s part in case you fail to repay the loan.
USDA does not require any down payments and so USDA mortgage insurance is mandatory for everyone obtaining financing from USDA. USDA mortgage insurance is combined of two charges – the funding fee or guarantee fee and the monthly mortgage insurance premium. The funding fee for a 30 year fixed mortgage is 2% of the total loan amount. This amount can be included within the loan so you don’t have to pay anything out of the pocket. The mortgage insurance for USDA loans currently stands at 0.5% of the total loan amount and this has to be paid monthly along with monthly loan payments.
The mortgage insurance or the guarantee fee that you have to pay for USDA loans is much less than any other conventional loan program. This also helps in keeping the monthly payments at bare minimum.
So now if you are considering USDA home loans, get pre-qualified by your lender soon to see whether you are eligible to get USDA home loans or not. Two most important things that needs to be taken care of are – you must meet the income eligibility for Amarillo and the property to be financed must be located in one of the USDA approved areas. Besides, even if you have no bank reserves, collaterals or bad credit, you can get an USDA loan approved. To learn more about low-insurance USDA loans, complete and submit our loan application form or give us a call.