How does a USDA loan work?
This is a government backed loan that allows 100% financing for home buyers! There are stipulations that include a limit on household income and property eligibility.
Household income limitations are determined by the location of the home. In our local areas of Onslow, Craven, and Carteret counties, the household income limit is $74,750 for a home of up to four people (limit increases when there are more people in the household).
To determine property eligibility, the address can be entered on their website which will tell you if the home is in an eligible area.
What are the USDA fees? USDA charges 2% of the loan amount up front – this fee can be financed into the loan – Ex. Home price of $100,000, charge of 2% ($2,000), total loan amount will be $102,000. There is also a small monthly fee included in the mortgage. This mortgage insurance is kept throughout the life of the loan – the amount will decrease with time as you gain equity in the property.
Before closing, the loan must be sent directly to USDA for approval. In North Carolina, we are currently seeing a turn-around time of about two weeks. This time needs to be considered when setting a closing date.
For more information, call today!
Danielle Hifko
New American Mortgage
910-581-6398
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