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Written by: Rebecca Smith
Are you considering buying property in or around Fort Worth but are skeptical about the mortgage options with high down payments? Maybe a modest credit score is holding you back from contacting the lenders. Many property buyers feel the same way. However, you can still opt for a mortgage with lower interest rates and no down payment.
USDA loans are government-backed mortgages targeted at rural and suburban homebuyers with low to average incomes. Many areas around Fort Worth qualify for this program.
The basics of USDA loans
The U.S. Department of Agriculture supports USDA loans to encourage more people to buy properties in rural and suburban areas. Top mortgage lenders Fort Worth will offer you such loans with zero down payment and lower interest rates, provided you meet the criteria. The mortgage insurance cost is not high.
Unlike regular mortgages, USDA loans seem bliss for applicants who do not have significant savings to clear the down payment. This fits the bill for first-time buyers, too. There are three variants:
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A USDA-guaranteed loan is issued by private lenders but with the support of the USDA. It fits the bill for moderate-income borrowers.
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The USDA issues direct loans to people with low-income levels.
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USDA home improvement loan is meant for homeowners who want to repair their properties.
What are the primary loan eligibility parameters?
To be considered for USDA loans, you have to meet the below-listed criteria:
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The property location should be in a USDA-eligible area.
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It has to be your primary residence, not meant for investment.
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Your credit score should be 620 or more.
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Your debt-to-income ratio should be below 41%.
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Your income has to be within predefined USDA Income Limits.
Many people think that USDA loans are only available in faraway rural areas, but the reality is different. With a little effort, you can buy properties in several suburban areas with USDA funding.
How to apply for a USDA Loan?
The application process for a USDA loan is quite simple.
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At first, you have to check your income and property eligibility. You can use the USDA eligibility map to learn about areas approved. Besides, your household income should be within the USDA limits.
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Next, you will have to look for a suitable lender. Not every bank offers USDA loans, so you may need some time to locate one. An online directory like Allmortgagedetail.com can be useful in this regard.
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For a pre-approval letter, you will need documents such as bank statements, job proof, a Credit report, Tax returns, and W-2s.
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Apply for the mortgage after choosing a real estate agent expert in USDA loans.
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Wait for the application to be processed and for the closing to be completed. USDA performs a final loan guarantee check.
Summing it up
The advantages of USDA loans for people seeking affordable properties outside the urban areas are undeniable. You should do your research carefully and gather all required documents. Improving your credit score will give you some negotiation power. While dealing with the lenders, ensure you get your queries resolved for the best experience.