Whether you’re purchasing your first home or you’re looking to relocate from your current home into a new house in New York State, a USDA mortgage could be a great option.
With competitive rates, flexible requirements and no down payment required, NY USDA loans are a popular choice among the home buyers who qualify.
Curious about the benefits and advantages of USDA mortgages? We review 6 key ‘pros’ of New York USDA mortgages here.
There are a number of benefits that set USDA home loans apart from other mortgage options in New York State. These benefits include:
Home buyers who finance their home purchase with a New York USDA loan do not have to worry about saving up to put a large sum of money down at the time of purchase. USDA mortgages provide 100% financing, which makes this type of loan especially great for first time home buyers!
USDA loans do not have a minimum credit score requirement per se – though it’s important to note that your credit history does play a large role in determining whether or not you are able to qualify. Still, you do not need perfect credit to qualify for a USDA mortgage. This means that even those with imperfect (yet improving) credit may still be eligible. As a result, USDA mortgages are a favorable option for many individuals who might not otherwise qualify for a home loan.
When it comes to mortgage insurance, USDA home loans are a bit different from other types of mortgages. Insurance is paid in the form of a guarantee fee (paid up front at the closing) and an annual fee, which is typically paid monthly as part of a mortgage payment.
The funding fees associated with USDA loans are typically lower than the fees and insurances required by other types of home loans.
Seller’s concession is a percentage of a home’s purchase price that a seller agrees to contribute to the buyer to help cover closing costs. The amount of seller’s concession allowed varies depending on home loan type.
With USDA home loans, there is a 6% cap on seller’s concession. However, if the appraised value of the home is higher than the sales price, the loan amount can be increased as high as the appraised value to cover some of the closing costs above the 6%. As long as the appraised value supports it, closing costs can be completely covered. This can be hugely helpful when it comes to minimizing the expense of closing on a home.
While interest rates do vary by lender and based on the economic environment, USDA loans often have some of the lowest interest rates on the market. These competitive rates make home purchases more affordable.
With USDA loans, all prepaid closing costs can be refunded at the time of closing. Receipts must be provided. This is advantageous as it frees up funds for the home buyers.
Interested in taking advantage of these – and other – USDA loan benefits when you’re purchasing a home? We can help you make it happen!
Our experienced team of mortgage professionals can connect you with a USDA home loan lender. We can also help you explore other mortgage options and compare them to the USDA offerings so you can be sure you’re securing the mortgage that’s truly best for you.
Interested in learning more about how to apply for a USDA home loan? Learn more about the USDA loan application process.
Wondering how to find a USDA eligible property in New York? Get the details about USDA eligible areas of NY.