For years, the USDA home loan has been successful at putting people in homes who thought they would only be able to afford to rent an apartment or home. To them, a mortgage or a home loan was completely out of reach because they were seen as bad risks by almost every conventional or even unconventional mortgage lender. Through this program, 100 percent financing is made possible with reduced mortgage insurance premiums and below market value mortgage rates. No down payment is required, and you are required to take a fixed rate loan.
The USDA home loan does require upfront mortgage insurance; however, it is not paid as cash. It is added to the loan balance for you, making these types of loans extremely affordable. Should you run into stressful financial situations or if you are just looking to decrease the amount of debt you have taken on, this type of loan can be refinanced. The USDA Streamline Refinance Program waives income and credit verification, and the closing can happen quickly. Unlike other loan programs, home appraisals are not required. This can speed up the approval or the refinancing process.
Whether you are a first-time or repeat home buyer, the USDA home loan is available to all home buyers in the rural areas of Cedar Rapids, Iowa City, Waterloo or other surrounding areas in Iowa. Potential home buyers may not be aware that these loans are available in about 97 percent of the geographic United States. Most mortgage lenders do not have these types of loans on their service schedule as they cost just a fraction of what you would typically pay if you sought out a conventional loan or mortgage. The repayment schedule does not feature anything non-standard. There are no surprise, inflated balloon payments. The closing costs involved are ordinary, and repayment penalties never apply.
Being approved for a USDA home loan does not mean you have to build a farmhouse in a rural area in Cedar Rapids, Iowa City, Waterloo or other surrounding areas in Iowa. Yes, you are accepting a loan through the USDA, but you do not have to worry about anything except being happy in your new home. These types of loans come with a fixed rate that you are required to take. This means there will be no hidden rate increase, and you should not have to worry about your payments going up for any reason.
Compared to other typical mortgages or home loans, with the USDA home loan, you will pay a fraction of the cost and the rates are low. Like some other loans out there, it will help people who never thought they would own a home suddenly become a homeowner. Potential homeowners should also keep in mind that if the term rural is mentioned anywhere in the loan agreement, it does not necessarily mean a sparsely populated area that requires driving miles and miles to find a grocery store or other daily life amenities. It could be referring to towns and suburbs outside larger cities, like Cedar Rapids, Iowa City and Waterloo. Affordable loans like this make it easy for small towns and suburbs that were once thought to be dying out to rebuild, rehab and find new life. More residents in the area means greater supply and demand for goods and services in surrounding areas. This could attract large and small businesses to expand to such areas. The economy will grow, and before you know it, property and home values will increase.
A USDA home loan is a part of the key to helping small towns prosper or survive. Opportunity is available to both the borrower and the towns and suburbs that are attracting the new homeowners. Affordable living within suburban neighborhoods was once thought of as a dream by renters with low to average incomes. First-time homeownership can become a reality by simply filling out an application and being able to prove your source of income and the amount. Officially, there is no required minimum credit score, but most banks and other lenders will not approve anyone with a credit score below 640. Yes, lenders do check your credit report, so you will want to make sure there are no errors on it. If you have outstanding debts that are lowering your credit score, you are better off handling them right away. Creating an account on a website that will check your credit score for free can help you keep your credit score in check.
