Recession, interest rates are now on-par with conforming loans — sometimes even lower. This means that buyers who can afford jumbo loans are usually paying the same interest rate as those who are buying lower-priced homes. However, it is usually not easy to obtain a jumbo mortgage. The underwriting requirements are extensive, and there is a lot more scrutiny placed onto the borrower by the bank. Requirements for a jumbo loan vary according to the lender, but one of the most common requirements is that the borrower must supply a larger down payment. Often that payment requirement is 20%, which in the case of a $425,000 mortgage would be $85,000 cash. For many Americans, saving that much money up in the bank would be extremely difficult. Additionally, the borrower must have more money in reserves and usually there are higher credit score requirements. If you are going to be going with a jumbo loan, you must know what the requirements are and make sure that they can fulfill the requirements of that lender and that loan program.
USDA Loan Program
A United States Department of Agriculture (USDA) home loan is a zero-down payment mortgage for eligible rural and suburban homebuyers. USDA loans are issued through the USDA Rural Development Guaranteed Housing Loan Program. These loans are backed by the U.S. government and guarantee 90% of the value of a loan for approved lenders. This means that lenders can offer 100% financing on USDA-eligible homes while still taking on very little risk. The USDA Rural Development office operates over fifty financial assistance programs for a variety of rural applications.
The program is designed to make it easier for people to purchase
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