There is no doubt that that one ultimate American dream is to acquire a house that you can proudly call your own. But not everyone has enough money to buy a house. The good news is that since there are many home loan options available, you can now buy your house more easily at a more affordable rate.
When it comes to mortgages, most will require a down payment. You must have a good credit history and, of course, a stable source of income. When you fail to meet the minimum criteria, then you will have to work harder to get approved for a mortgage in the future. But that does not mean that you no longer have the chance to buy a house now. You can always consider looking for other mortgage options such as USDA loans in Orem, Utah.
The following are just some reasons considering a United States Department of Agriculture (USDA) loan can be a good idea:
An affordable home in a rural area
Do you have plans to buy a nice house in Utah? Then you can buy it in many in-demand rural areas, including Orem. The best part is that you can qualify for the loan despite you not being a farmer. Of course, the home you are trying to buy should not be marked as a town or city. Otherwise, you’ll need to consider another home loan type.
USDA loans favor families who cannot afford to get approved for a mortgage due to their low family income. If your total household income is below 115% of your area’s median income, then you can apply for the mortgage. Of course, you will need to provide proof that you have a stable employment history. This will give your lender peace of mind, knowing that you have the ability to pay for your monthly mortgage.
No down payment needed
Most home loans require a specific percentage of the total purchase price amount to qualify. FHA loans need you to pay at least a 3.5% down payment, while conventional loans require a 3% down payment. With a USDA loan, you can enjoy a zero percent down payment. This means that you can use whatever down payment money you have saved to buy things for your home.
Lower upfront and monthly costs
When buying a house, the costs can quickly add up and break the bank. With a USDA loan, you can enjoy lower loan costs. They call upfront mortgage costs and monthly mortgage costs as guarantee loans. When you compare the guarantee costs from the usual loan costs of other mortgages, you can save a considerable amount each month. The bottom line is that you can enjoy lower upfront fees and monthly payments with a USDA loan.
No prepayment penalties
Prepayment penalties refer to the fees you need to pay in case you decide to pay off your loan earlier than the loan term. Some lenders will require you to pay such fees, but when it comes to USDA loans, there is no need to worry about the prepayment penalty. This gives you peace of mind, as you don’t need to pay extra just to finish your mortgage early.
There are tons of mortgage options that allow you to buy your first home. If you plan on buying one in a rural area, then a USDA loan is a good option. Weigh in your options and know what best suits your situation, and you can finally make your dream home purchase a reality.