What sort of down payment is required for a USDA loan?
Unlike almost all other types of loans, a USDA loan does not require a down payment. You can also use money from gifts and assistance programs to cover the closing costs. This makes them a good option for those with extremely limited savings.
Do I have to pay mortgage insurance on a USDA loan?
Private mortgage insurance (PMI) is a type of insurance borrowers typically pay on a loan when they have less than a 20% down payment. You are no longer responsible for paying for PMI once you have 20% equity in the home.
While you won't owe PMI on a USDA mortgage, you will need to pay for government-issued mortgage insurance. However, the monthly payment for this insurance is typically lower than it would be with a conventional or FHA loan.
I've heard it takes a long time to get a USDA loan. How much longer does it take than a regular loan?
It used to take a long time to get a USDA loan. But that has changed since the process has been streamlined. The time from application to closing is now similar to that of other types of mortgages.
Can I use it for multi-family properties?
Yes, you can use a USDA loan to buy a multi-family property, provided that the property has no more than four units and you will live in one of them as your primary residence.
Why haven't I heard of USDA loans before?
In order for a bank or other lender to offer USDA loans, they must be approved to do so by the federal government. If you've approached a lender in the past and they did not mention this loan to you, do not assume it's because you wouldn't qualify. It may simply be that particular bank wasn't approved to make this type of loan. Instead, reach out to a bank that's approved to issue USDA loans.
If you're ready to start shopping for your new home with the help of a USDA loan, get in touch with a Synovus mortgage specialist today. We're here to help you get the financing you need to purchase your next home.