USDA Home Loan versus Traditional Home Mortgage
About USDA Home Loans
With the current economic market heading towards at an all time low the low income families find it extremely difficult to realize their dream of becoming homeowners. This is why USDA loans are proving to be quite a boon for these people. The USDA loans are specifically designed for low income families, so that they can become homeowners in the most of affordable and uncomplicated manner possible. USDA loans allow the borrower to either by a used property or built a new one. However, borrowers usually use these loans to buy existing property.
About Traditional Home Mortgages
Traditional home loans as the name suggest are the conventional home mortgage programs that in today’s world are extremely expensive as well as quite out if reach for low income families. Moreover, these loan programs come with a hefty interest rate and their qualifying criteria is also very stringent and time consuming.
The USDA home loans hold a lot of advantages over the traditional home mortgages. Let us take a look at the differences as well as the advantages of these two loan programs.
USDA Home Loan versus Traditional Home Mortgages
- The USDA home loan programs are available to borrowers at 100% financing which means that these loans require no down payment while in a traditional loan program a hefty down payment is required
- Most of the time traditional loan programs require collateral as well as reserves or assets to qualify while USDA require no such thing
- USDA loans also provided finds for some or all the closing costs of the borrower in a lot of cases whereas traditional loans usually not meet any of these costs
It is true that USDA loans have a lot of advantages over traditional loans, however it is necessary the borrower meets the low income eligibility criteria of USDA in order to qualify for these loans.