USDA loans are quite beneficial to anyone who does not have a lot of money to make a down payment for a house. This is mainly due to the fact that USDA loans are government insured and will offer the borrower 100% financing.
The associated closing costs will be usually included into the loan or paid by the person selling. He USDA will in fact have the lowest percentages available when it comes to home loans, as well as fixed interest rates.
Who is Eligible for a USDA Home Loan?
One of the major factors that will be associated with any loan from the USDA will be your credit score. Underwriters will look into your credit score as a way of seeing your history in paying bills. Keep in mind that having a blemish on your credit record will not be the ultimate deciding factor in your eligibility for a USDA loan. The majority of times a person can be approved with bad credit if they have reestablished their credit within the past year. If you have any delinquencies with any credit or collection agencies you will have to make sure to pay them all before applying for a USDA loan.
Knowing Your Monthly Income
Before applying for a USDA loan be sure that you are able to provide a proof of income. Hat the USDA will be looking for is to just see if you have at least a history of employment that has lasted two years or any source of ongoing income. In some special cases, the USDA will make exceptions for breaks in being unemployed such as, a person going back to school. You will not need to have assets when you apply for a loan with the USDA, but it may be beneficial if your credit is not perfect.
Benefits of USDA Loans
You do not have to make any type of down payment.
The guidelines that are set in motion for the USDA are flexible.
There is no worry about changes to interest rates.
No set limit on how much a person can apply for when seeking a USDA loan.
If you want to purchase a brand new home it may be eligible.
It is always good to keep in mind that if you want to qualify for a USDA loan you will need to find a home that is located in a designated USDA area. It is best to conduct research online to see the areas of the country that are eligible for USDA loans. You cannot own adequate property and try to apply for a USDA home loan for another property.
USDA loans are meant only for individuals who do not have any adequate housing and have no qualifications for other financing types. There are cases in which you can own another home and get a USDA loan. If you are the owner of a mobile home the USDA will not consider it to be adequate property and will allow you to keep the mobile home.