Complicated mortgage terms and changing dynamics of the real estate market makes it hard to buy a home. If you don’t have a big paycheck that can afford a home in the city, you can opt for a USDA loan and get your home in the rural region. USDA loans are basically meant to promote local economy and help low-income groups in owning a home. It also comes in handy for seniors, who can get approvals for loan and grants that help in upgrading and renewing older homes in these areas. If you are considering USDA loans, you can check websites like https://onqfinancial.com/ for details.
Here are five things you need to know as a borrower
- It’s not just for farmers. Yes, you read that right. Since the loans come from US Department of Agriculture, it is believed that people involved in farming or agriculture can avail the loan, which isn’t true. All USDA loans are designed to help buyers in getting residential properties in rural areas. This is also why the house needs to be your primary residence. You cannot make money from the investment.
- You still need to pay for mortgage insurance. Unlike traditional loans which have a big down payment, you don’t need to pay that for USDA loans, but mortgage insurance is still required. However, in this case, mortgage insurance is still affordable.
- You can buy a wide range of properties. USDA loans can be available for buying all sorts of properties in the recognized rural areas. The list includes manufactured homes, existing properties, condos, and new homes. You can also choose to invest in Planned Unit Developments.
- Your income is a big factor. The whole purpose of USDA loans is to make housing options available to one and all, and therefore, if you have a good salary, you cannot just go and seek a home in the region with such a loan. The income limit is largely decided by the size of household. For a family of one to four members, the income limit is $74, 750, while for bigger homes with up to eight family members, it is $98, 650.
- There are different types of USDA loans. There’s the choice of USDA guaranteed loan, which is offered for applicants with a dependable income, while USDA direct loans are for extreme low-income groups and don’t involve a lender. There is also the additional choice of getting a USDA home improvement loan.
Check online for details now.