Home Sweet Home!
Living in the city can be exciting and vibrant, but if you’re the kind of person who prefers the great outdoors, take a look at a USDA loan for your home purchase. Offered by the Department of Agriculture, USDA loans helps people like you buy a home in a rural area. Not only can you get the home of your dreams, but your purchase can also improve the quality of life and local economy in those areas. Of course, there are certain requirements for USDA loans – continue reading to get an overview of what they are.
Location, Location, Location
When you hear the word rural, you may think of pastures and fields. But according to the USDA, your rural property doesn’t have to be that rural. Eligible properties can be located in:
- Areas with a population less than 20,000 people, or
- The property cannot be close to a city or town that has more than 50,000 people
You also have to plan to live in your property; rentals don’t fit the bill for USDA loans. Also, because people move and towns expand, the USDA regularly reviews eligible areas and adjusts when needed. Take a look at their website to see if your dream property is within an approved location for a USDA loan.
The location isn’t the only deciding factor in getting a USDA loan; so is your income. But instead of having a minimum income, there are actually income limits, which are based on location and the size of your household. Again, you can check out the USDA web site to see the income limit for the region you have in mind.
You also need to have had your job for at least 24 months.
The Fine Print
In addition to location and income, there are a few other details to keep in mind:
- You need to be an American citizen, or at least be a permanent resident.
- Generally, your monthly mortgage payment, which includes the principal, interest, taxes, and insurance, has to be less than 29% or less of your monthly income. Throw in any other debt you have, and your total debt cannot be more than 41% of your pay.
The beauty of a USDA loan is in its terms. Believe or not, you don’t need a minimum down payment or have to have higher-than-normal interest rate. Just the opposite, in fact a USDA loan lets you get a mortgage with no down payment whatsoever! In today’s market, that is a rare jewel. But there’s more. You can still get a competitive interest rate, and if your family wants to gift you cash towards your home, they can do so without limits.
Do You Qualify?
If you dream about living surrounded by green trees and fresh air, why not ask about a USDA loan? Our Loan Officers at Shamrock Financial can fill you in on what you need to do to enjoy wide open sky on your front porch every day of the year.