Of the many loan programs and options available nowadays, the USDA is the most economical and budget-friendly for families who are searching for properties in the rural and suburban areas. This loan, guaranteed by the United States Department of Agriculture, aims to provide decent and safe homes to the majority of households who cannot acquire mortgage loans through the traditional means because of credit and income restrictions.
The program allows mortgage finance companies to issue loans with lighter qualification standards, which is made possible by the government’s protection against default payments. Qualified applicants can take advantage of economically beneficial features such as no-down payment, closing cost concessions, low interest and insurance rates, flexible terms, and more convenient financial requirements.
Eligibility and Loan Application
Despite its more attainable prerequisites, the USDA Guaranteed Rural Development Home Loan is not for everyone. It is restricted to those who fall within the income limit threshold, which is 115% of the area median income. Families who make beyond that may try other affordable mortgage programs like the FHA loan.
To avail of the loan, the first thing you have to do is look for a USDA-authorized lender. You can search for them online or by contacting your local USDA office. When you have done so, prequalify for the loan to find out your chances for approval and how much you can borrow. While not all mortgage companies finance USDA home loans, many of them do, and you can surely find plenty near your area.
To make sure that you end up with the best lender for the job, here are a few useful tips:
Come prepared. Despite the overwhelming number of mortgage companies advertising their USDA loan offers, it is imperative that you find out as much as you can about the program. If you can, try to find out what rates other borrower are getting, so you know what to expect.
It’s always a wise idea to shop around when getting a mortgage loan. Don’t settle with the first USDA lender that offers you an acceptable deal. Talk to several mortgage company agents. Although the USDA backs the loans, different lenders set different rates according to specific factors. There is a good chance that you’ll end up with a much better deal if you maximize your options.
There may be plenty of USDA-approved lenders around, but not all of them are experienced in handling this type of loan. Make sure that the lender you choose has dealt with USDA loans before. Their knowledge and expertise are instrumental in the smooth and successful processing of your mortgage.
Top USDA mortgage lenders are considered the best for a reason. They received the recommendation from their clients because they delivered quality service and assistance. Ask around. Visit their website and see for yourself what people are saying. Going for the best USDA-approved company in your state will ensure you that you’re working with people who know the program inside out.
The USDA RD loan is an excellent option for people who have limited incomes but with decent credit records. With the right lender, applying for the program will not only be affordable but a lot more convenient as well.