To help the home buyers with a meagre income, the United States Department of Agriculture came up with a loan named USDA home loans
The vision behind this loan is to support people to buy a home who have a low or moderate income. With its attractive benefits and features, this loan is gaining popularity amongst the public. The most exceptional aspects of this home loan are that you can proceed towards buying your home with zero down payments and you can get this loan quite effortlessly. No matter if you are living in Montana or Nebraska, you can avail USDA Home Loans Montana and Home Loans Nebraska, as long as you meet all the criteria and requirement. Let us acknowledge the advantages of USDA home loans.
Zero Down Payment
You can consider this feature to be the most significant feature of this loan. It delivers the 100% financing to the purchase price of an eligible home loan. On the other hand, you have to pay a minimum of 3.5% down payment if you are availing the loan from the Federal Housing Administration, which will add up to almost thousand to the upfront expenses. Due to the no-money-down feature, many people are tending towards availing the USDA home loans. It is allowing people to buy home effortlessly or else they would have been locked out from the homeownership.
The guarantee of USDA
The USDA Mortgage Insurance Premium partially funds the guarantee of the lender. They will fund the 1.00% of the amount of the loan. Previously, in the year of 2016, the percentage rate was 2.75%. There is also an annual fee for the loan, which is 0.35%. Earlier, the annual fee was 0.50% till 1st October 2016. Well, you have to pay the yearly fee in monthly instalments. It will be twelve equal instalments. The upfront fee is $1000 for each $100000 you have borrowed. And the monthly premium that you have to pay is $29. The borrower can either include the upfront fee in the loan amount or pay it, out-of-the-pocket. The cost of USDA loan is quite low compared to FHA loan.
Fee charges for USDA got lower from 2016
Another advantage of USDA loans is that, from 1st October 2016, the monthly fee dropped down to 0.35% from 0.50%. Also, you can easily calculate your monthly cost. All you have to do is to multiply your loan amount to 0.35% and then divide the result with 12. The final result that you will get will be your monthly cost. In addition to that, the upfront fee also witnessed a cut-down. Previously, it was 2.75%, but now, it is 1.00%. So, you can clearly understand that it is a delightful opportunity for the buyers to pay a lower amount of monthly income.
Millions of people are eligible for this loan
A massive number of people in the United States fall under the eligibility of this loan that is living in rural areas.
So, these are the most vibrant advantages of availing USDA home loan. You don’t have to worry if you are living in Montana or Nebraska, you will be considered eligible for the loan.