With No Money Down
With no money down, you can still buy a home in Indiana! USDA rural home loans are perfect….
There are several types of home loans available in today’s mortgage market. USDA home loans are just one option available to consumers. They are also among the most popular, especially due to their 100% LTV financing and the fact that they can be done with no money down! This is a perfect match for consumers who CAN afford a monthly house payment but do not have 20% down sitting in the bank. USDA stands for United states Department of Agriculture, but USDA loans can be used for purposes other than just farming. This is an option to consider for home buyers who want to purchase with no money down.
Types of the USDA home loans
Following are some of the more common types available for the home buyer. They include:
- USDA Guaranteed Loan Program: This is the most popular type of USDA home loan, since it enables the borrower to purchase their homes with up to a 100% LTV mortgage.
- USDA direct Loan Program: These types of USDA home loans they are issued in a more limited foundation than the USDA Guaranteed Mortgage Loans. They are aimed for the low and the very low income households that want to buy a new house. What are meant as the very low income are those that are less than 50% of the area median income. The low income is those that are between 50% and 80% of the area median income, the moderate income is those that are form 80% to 100% of the AMI.
USDA Financing is the only 100% of appraised value financing available. A buyer can finance closing costs, pre-paids, needed repairs and the purchase price of the home as long as the house appraises for the needed amount. Also, one of the most important factors, it is available with no money down!
The USDA 100% mortgage loan is guaranteed by the U.S. Government.. The Guarantee fee is 2% of the total loan amount. This amount can automatically be “rolled into” the loan. There is also a montly component of the mortgage insurance cost. The factor is .30. This compares well to the 1.15 factor used for FHA loans. (ex. loan amount $100,000.00 monthly mortgage insurance would be 100,000 x .30% /12=25/month as a part of your payment.)
2 Things To Keep In Mind With USDA Mortgages:
- The home must be in an eligible area. To find out if the property that you want to purchase is eligible, you can visit the USDA website at byclicking here to see if the property you’re interested in qualifies.
- A borrower must income qualify. The USDA guidelines require that all income in a household is accounted for whether a person is on the mortgage loan or not. You can also reduce the household income by actual expenses for child care, medical expenses (see rules on webpage), and for every child at home under the age of 18. The income is based on a 1-4 person household or 5-8 person household. Due to this change, a person who makes under $74,000.00 in most counties can qualify. Click here to find out more about income qualifications.
These types of loans are a great way of funding the first time home buyer as they don’t require any down payment and have lower interest ratescompared to the private loans. One thing to keep in mind is that these loans are targeted for the people who are living in under developed areas or in rural settings. The loans are taken for the full payment of the projects and the payback is very easy as its spread over 30 years.
When you have officially qualified for a mortgage amount, it’s now time to find a home or property based on what you can afford. A Realtor will be happy to help you sort through what’s currently available on the market. Here is an informative article on why you should use a Realtor on your quest to find your next home.
Many people don’t even pursue buying a home because they don’t have 20% down sitting in the bank. We want to encourage you to explore the option of a USDA mortgage with no money down before you put your dream of home ownership on a shelf.