I have written about this before, but in a mortgage environment with guidelines continuing to tighten, folks looking to purchase their home in outlying areas, somewhat rural areas, owe it to themselves to consider and USDA Rural Housing mortgage loan.
You see, these loans have two distinct advantages that no other loan product can compare with:
- 100% Financing for the home. That’s right, no down payment is needed. So, for a Georgia first time home buyer who has amassed a small savings – a few thousand dollars – may be better served to count that as their reserve funds, and finance 100% of the purchase price, at extremely low interest rates.
- No Monthly MI Payments: Right. That dreaded PMI that protects the lender against default, but the buyer has to pay for, is not there on a USDA loan. Too good to be true? You got me. There is what would correspond to MI, and it is equal to 2% of the loan amount, but much like an FHA mortgage, that 2% is added to the loan amount and financed. So, on a monthly payment basis, it is nearly painless.