Have you been planning to own a property that you could transform into home? Then what stops you? Is it the money? Then it’s high time you introduce yourself to USDA Mortgage, a lesser known loan service for the greater good of the Rural population. And, guess what you can ascertain your budget too by simply using the USDA Loan Calculator.
What is USDA Mortgage?
The Mortgages that are guaranteed by the U.S. Department of Agriculture (USDA) are called the USDA Mortgages. There are one of the fewer loans that are still available at no down payment applicable on home purchases. For every rural area that comes under the eligible areas, USDA Mortgage is the best option available for them to buy houses of their own. They have certain limits as far as the income is concerned and eligibility criteria for the rural residents to qualify.
USDA Mortgage Eligibility
- USDA Loan Credit Requirements: A person who wants to get USDA loan should show a stable income, a good credit history and ability to repay the loan. Even though there is no minimum credit requirement but a credit score of 640 or above are granted the loan without any doubt. The lender needs to check your credit score, patterns of loan repayment, credit utilization and length of credit history before they apply for a USDA loan.
- USDA Loan Income Requirements: Someone who has a stable income is preferred for USDA Mortgage. A lender checks for two years of consistent employment along with income tax returns for verification purpose.
- Location Requirements: To know whether your area is eligible for a USDA Home loan, you must check the eligibility map. And, the best part would be if you ask your lender to check whether your preferred location is eligible or not. This loan has been introduced to help rural areas through development so any other area that doesn’t fall under the Rural category is not eligible for the loan. There are some Suburban areas that qualify though. Also, there are population factors to determine the same.
- Property Requirements: The purpose of the USDA Mortgage is to provide people having low and moderate income with a safe and sanitary household. So, the basic requirements that you must include are, the house must be the buyer’s primary residence; the house must be having adequate facilities and access to transport, road, water as well as water disposal system.
- Citizenship: It is one of the primary needs as the residents of the rural areas must be permanent U.S. citizens.
Employment: A person must have at least 2 years of continuous employment or stable work to qualify himself/herself for USDA Mortgage.
What is a USDA Loan Calculator?
A USDA Loan Calculator is basically a payment calculator used by the USDA to calculate an accurate USDA Mortgage. It is done by accounting monthly USDA Mortgage insurance, homeowner’s insurance, USDA guarantee fee and property taxes. It helps people ascertain their monthly payments that they have to make against the loan they are planning to take. With the help of this, people can draw a budget and then search for a property or home that fits their budget.
Every lender has his way of calculating the mortgage, there are websites on the internet that can give you a snapshot of your monthly payments using the USDA Loan Calculator . The total amount calculated by the calculator is equals to Purchase Price plus USDA's Funding Fee less Down Payment (which is zero in case of USDA Mortgage ). As each borrower has his unique way so you should consult your lender to do the same for you.