Learn the Pros and Cons of USDA Home Loans
Is a USDA Loan appropriate for you?
The USDA Loan is an excellent loan program that allows you to purchase a home with no money down. If you wish to buy a home in an eligible location but aren’t a member of the military, apply for a USDA Rural Development Loan. Consider an FHA or conventional loan if you have a down payment and do not want to reside in the suburbs.
FAQs on USDA Loan Pros and Cons
What are the disadvantages of a USDA loan?
A USDA Loan cannot be used to buy a home anyplace. You must purchase a property in a qualified location and meet their severe income requirements, which consider your entire household’s income.
Is it worthwhile to get a USDA loan?
Over 48% of respondents believe saving for a down payment is the most difficult obstacle they face when purchasing a property. So, a USDA loan is well worth it for someone who cannot afford a down payment. It also features competitive interest rates and monthly payments that are lower than the national average.
What is the advantage of a USDA Loan?
The most significant advantage of USDA loans is that no down payment is required. Because USDA Rural Development offers 100% financing, you can save thousands of dollars when purchasing a property.
Does the USDA annual fee ever go away?
The USDA yearly fee will remain with the loan as long as you have a USDA loan. Unlike conventional loans, you’ll have to pay the fee even if you have 20% equity in your house. Once you have enough equity, you can refinance into a conventional loan to avoid the cost.
How long does it take to get accepted for a USDA Loan?
The application process for a USDA loan is similar to those of other lending programs. It is feasible to receive complete approval within 30 days of signing a contract. The loan must be approved by USDA, which can take some time, especially if they go back up. You should plan on the loan closing taking between 30 and 45 days.
