Five Reasons Why a USDA Loan is Best for You

One of the hardest things that a potential homebuyer has to take care of when getting a mortgage is the down payment. That's why a lot of people are trying to find alternative ways on how to get a mortgage with the smallest down payment. The federal government together with the Department of Agriculture has developed a program that aims to assist very low to moderate income borrowers to get a loan. Although it's made to assist eligible homebuyers, it's a great option for everyone to consider when getting a home loan.

The USDA Rural Development guarantees mortgages that are made through private mortgage providers with 100 percent financing. This means that the Department of Agriculture will pay the private lender if the borrower defaults on the mortgage. Although you still need cash to settle other charges like the closing costs, not having to worry about the down payment is a great help for those who are financially in need of assistance.

So why is the USDA Rural Development a great choice for you? Here are some of the reasons:

1. USDA Rural Developments eases the worry of making a down payment. The USDA guaranteed mortgages offer 100 percent financing options to eligible borrowers. This means that people who are eligible for a USDA guaranteed loans don't have to worry about making any down payment. Although buyers will still need cash to pay for the closing costs like insurance and inspections.
2. You'll get a chance to get a house with a big yard. Although "rural" doesn't necessarily mean "out in the countryside," it does often come with a house that has some kind of a big yard. There are a lot of villages and even smaller towns that are considered to be in the rural category.
3. Restriction on property types is more lenient. It's a challenge to finance a newly manufactured or modular homes. With the Rural Development, it's possible to finance these types of houses.
4. Financing minor repairs is allowed. The Rural Development allows more than 100 percent of financing and in some cases, even allows the loan borrower to make some minor renovations to the property.
5. No penalty for prepayment. Since you're not required to put any down payment, you'll have extra cash to help you with other payments. You may even have enough cash to pay off your loan much earlier. Unlike other loan programs, you won't be penalized for making early payments.
6. Applying for a USDA loan is a great option for borrowers looking to finance their dream home. As always It would be best to work with a real estate agent who knows a lot of things about the USDA loan application process.

Applying for a USDA loan is a great option for borrowers looking to finance their dream home. As always It would be best to work with a real estate agent who knows a lot of things about the USDA loan application process.