How do I get a USDA zero down-payment mortgage?
A USDA home loan is a zero down payment mortgage for eligible rural and suburban homebuyers. USDA loans are issued through the USDA loan program, also known as the USDA Rural Development Guaranteed Housing Loan Program, by the United States Department of Agriculture.
There are three USDA home loan programs:
Loan guarantees: The USDA guarantees a mortgage issued by a participating local lender — similar to an FHA loan and VA-backed loans — allowing you to get low mortgage interest rates, even without a down payment. If you put little or no money down, you will have to pay a mortgage insurance premium, though.
Direct loans: Issued by the USDA, these mortgages are for low- and very low-income applicants. Income thresholds vary by region. With subsidies, interest rates can be as low as 1%.
Home improvement loans and grants: These loans or outright financial awards permit homeowners to repair or upgrade their homes. Packages can also combine a loan and a grant, providing up to $27,500 in assistance.
What is mortgage insurance?
Mortgage insurance protects the lender. You’ll have to pay for it if you get an FHA or USDA mortgage or put down less than 20% on a conventional loan.
Who buys a home warranty and when?
There are many people who can buy a home warranty. Here are some of them and when they generally purchase a home warranty:
The seller. Buying a home warranty for the buyer is used as a selling point for the property. This gives buyers confidence in the real estate transaction.
The buyer. A new homeowner will purchase a home warranty as an added layer of protection when buying a home. They can purchase it through a real estate transaction where they will get a discount if they purchase the home warranty within 30 days of closing.
A current homeowner. They can purchase a home warranty at any time on a house of any age, no matter how long they have lived in it. Homeowners purchased a home warranty as a protection plan for their appliances and systems that will inevitably fail.
The real estate agent. An agent can buy a home warranty as a gift to the new buyers. They can also purchase it as the sellers agent to provide protection during the sale of the property, something known as listing coverage.
The title company. They use the funds included in the home’s sale contract to purchase the home warranty.
Who is eligible for a VA home loan?
The government places service requirements on active duty, as well as offering an opportunity to get a VA loan for certain military spouses. You can get more information from the government’s website, but the basic requirements include:
You’re currently active duty military, or you’re a veteran, honorably discharged.
At least 90 consecutive days of active service during wartime or at least 181 consecutive days of active service during peacetime.
More than six years of service in the National Guard or Selective Reserve.
Additionally, if your active duty spouse died in the line of duty, you might be able to qualify for a VA loan.
In order to go through the process, you need to obtain a VA Certificate of Eligibility, or COE. Without this certificate, you won’t be able to get your loan.
What is included in my monthly mortgage payments?
Your monthly mortgage payment is made up of principal and interest, and that’s what our calculator shows. The principal portion goes toward paying off the total amount you’ve borrowed. The interest is a percentage of the amount borrowed that you pay to your lender.
For many homeowners, the monthly mortgage payment includes more than just principal and interest. It can also include property taxes and homeowners insurance premiums if you have an escrow account with your loan. An escrow account allows you to pay for your taxes and insurance premiums as part of your monthly mortgage payment.
Don’t forget – if the neighborhood where you’re buying a home includes a homeowners association (HOA), you may want to add your HOA fees into your monthly payment budget as well. However, your HOA fees probably won’t be paid for as part of your mortgage payment.
What does pre-qualifying for a mortgage mean, and how to do that?
Mortgage Prequalification is when the bank / lender performs a very basic review of your financial situation, in order to tell you how much of a home loan you can get. You can think of it as a free consultation between you and the loan officer. Mortgage Pre-approval is a more in-depth version of this process.