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A Resource For Home Buyers

We want to be a one-stop home buying resource for you, and one way we’re doing this, is by providing helpful tips and information about the mortgage industry, buying and selling your home – and many other useful topics that you’ll likely encounter on your path to home ownership. We’re confident that you’ll learn something new every time you visit this page.

3 reasons why a USDA loan is probably right for you

3 reasons why a USDA loan is probably right for you

The USDA loan is often overlooked by homebuyers, to the disadvantage of homebuyers in much of the U.S.

Backed by the U.S. Department of Agriculture, this mortgage encourages homebuyers to seek out locales outside of city centers. But before you begin envisioning acres of horse pastures and pole barns full of equipment, take some time to explore this option. It might be better suited to your needs than you thought. Consider these three facts before you dismiss this excellent opportunity:

1. They apply to more locales than you think.
You don't need to be a farmer to qualify for a USDA loan. In fact, you don't even need to be in the market for a big plot of land.

Unless you're looking for a home in the heart of a major city, chances are you can find one that's eligible for a USDA mortgage. Just 3 percent of the U.S. is ineligible, according to The Mortgage Reports.

2. There's no down payment required.
For many homebuyers, the down payment is the biggest hurdle. Most people primarily use their savings for their down payment. But it's not uncommon in today's world for a bank account to be somewhat lacking in terms of the funds needed to secure a home.

Luckily, a USDA loan doesn't require you to stress about this aspect of the homebuying process. The USDA mortgage allows for 100 percent financing, meaning you don't need any cash upfront.

Many mortgage products require buyers to purchase mortgage insurance if they make less than a 20 percent down payment. The USDA loan program is no different. However, USDA mortgage insurance fees are among the lowest around, My Mortgage Insider pointed out.

3. You can find discounted rates.
Finding a low mortgage rate should be top of mind for homebuyers. A difference of just one-tenth of a percentage point can cost you thousands over the course of your loan. When you opt for a USDA loan, though, you know you're on the right track. Rates for these mortgages are typically lower than conventional loans, The Mortgage Reports explained.

Does this all sound too good to be true? Don't worry: It's not! Reach out to a mortgage expert at The Federal Savings Bank to learn about how to get a USDA loan for your next home purchase.