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Utah USDA Home Loan
Residents of Utah have many options when it comes to new home financing. One of the more popular products in recent years is the USDA Home Loan. This is a mortgage that is backed by the United States Department of Agriculture. There several benefits that attract borrowers to this particular loan type.
The first and most obvious benefit is the no money down feature. When using a USDA loan to purchase a home in Utah borrowers can obtain 100% financing. Private lenders lend the money but since the government backs the loan it allows them to lend 100% of the purchase price.
Another major benefit for Utah residents is the low monthly mortgage insurance associated with the loan. The factor currently used for the monthly MI is much lower than the amount used on other loan types. This can save the borrower a lot of money over the life of the loan. The USDA loan does have a upfront fee but that is a little misleading because it is actually rolled into the loan so the monthly cost is very minimal.
The seller on a USDA home loan transaction is allowed to pay 6% of the sales price towards closing costs. In most if not all transactions this is more than enough to cover all the closing costs associated with the loan. This feature coupled with the no money down feature allows borrowers to purchase a home without having to bring any money to closing. While other loan types have minimal down payment requirement’s outside of the VA loan the USDA loan is the only loan where a person can get into a home literally with no out of pocket money.
Residents seeking a USDA home loan in Utah that have challenged credit are in luck. The USDA loan has flexible credit requirements. Borrowers usually only need a credit score of 640. Outside of the low score requirement there are other flexible credit related features. A borrower only has to be 2 years removed from a bankruptcy and 3 years from foreclosure. There are minimal trade line requirements as well and when those cannot be meet borrowers are allowed to use alternative trade lines such as cell phone and utility bills.
With no money out of pocket required along with low mortgage insurance and flexible credit it is very obvious why Utah home buyers are using the USDA Home Loan more and more. This is a product that is got many upsides and benefits to home buyers .