The Pros And Cons Of USDA Mortgage Loans
When first hearing about the United States Department of Agriculture (USDA) loans, one might think about agribusiness loans rather than home loans. A quick look up online on USDA Home Loans near me proves this. With a wide list of advantages of USDA Mortgage Loans, it’s still a surprise how the majority of the nation’s population still doesn’t know about it. Which makes it often referred to as the best-kept secret of the mortgage market.
Thinking about what these advantages are? Now that I’ve piqued your interest, let us go over the advantages and disadvantages of USDA Mortgage Loans.
What are the benefits of USDA Mortgage Loans?
1. Generous definition of rural – Firstly, the program is only available to houses in the rural area. The USDA has set the definition of what makes an area rural as generous as possible. The USDA’s definition made some suburbs qualify. According to them rural areas are open country areas which are not part of an urban area.
2. No down payment – The biggest advantage of USDA Mortgage Loans is its zero down payment scheme. This makes the program much more beneficial to the low to medium income portion of the population since most aspiring home-owners would have their house purchase plans hampered by the required down payment.
3. Lower interest rates – Compared to conventional loans, the USDA’s interest rates are very competitive, one of the most competitive in the market!
4. No minimum credit requirements – USDA home loans do not require minimum credit score to qualify. Although the applicants with higher credit score would have much better terms, applicants with lower credit scores are still eligible for the program. They only need to ensure that you have no problems paying for your rent and utility bills.
5. Assumable – USDA allows for assuming of the property to an eligible buyer.
What are the downsides of the USDA Home Loans?
Though the program has a lot of advantages, there still are restrictions made by the USDA to avoid exploitation and abuse of the program. Here are some of them:
1. Primary residence only – Vacation homes, second homes, or investment properties are not allowed by the USDA. The house to be bought must be used as the buyer’s primary home.
2. Geographic restrictions – As stated earlier, this program is only available to houses in the rural community, in areas accepted by the USDA.
3. Income limits – Buyer’s incomes should not exceed the 115% of the median income for the area.
Should I consider getting USDA Home Loans San Antonio near me?
If you want to wish to live in the peaceful city of San Antonio, Texas, now would be the perfect time to apply for a loan. There is an abundance of USDA lenders online to inquire on. To get the best out of your “USDA Home Loans San Antonio near me” search, be sure to ask the right questions to your lenders and get a sense of trust for them and their offered services.
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