USDA Home Loans in Sacramento, CA

Understanding Home Loan & Mortgage USDA Loans

USDA Loans

USDA loans are primarily used to help low-income individuals or households purchase or refinance homes in rural areas.

Current Fannie Mae and Freddie Mac jumbo loan limits are to $729,750 depending on the location of the property.

USDA Loan Program features:

No down payment requirement for qualified borrowers
Specifically for clients who may be challenged to qualify on income for a home purchase in an eligible rural area
Funds can be used to build, repair, renovate or relocate a home

For USDA Refinances:

Low minimum credit score requirements:

Minimum 550 credit score
Minimum 500 credit score if your loan is currently serviced by Carrington Mortgage Services

Program detail:

Available only in certain states*
Maximum loan amount is determined by county maximum limits and pay off amount

*Eligible states: AL, AK, AZ, AR, CA, CO, FL, GA, ID, IL, IN, KS, KY, MI, MS, MO, MT, NV, NJ, NM, NC, ND, OK, OR, RI, SC, SD, TN, TX, UT, WA, WV, WI.

FAQ

What is a conventional fixed-rate mortgage?

A “fixed-rate” mortgage comes with an interest rate that won’t change for the life of your home loan. A “conventional” (conforming) mortgage is a loan that conforms to established guidelines for the size of the loan and your financial situation. Conventional loans may feature lower interest rates than jumbo loans, FHA loans or VA loans. Terms of these conventional loans typically range from 10 to 30 years.

Monthly principal and interest payments on a conventional fixed-rate mortgage remain the same for the life of the loan making it an attractive option for borrowers who plan to stay in their home for several years. The alternative to the fixed-rate mortgage is the adjustable-rate mortgage (ARM), which features lower monthly principle and interest payments during the first few years. While many prefer the security of a fixed-rate loan, an ARM may be a better option – especially if you know you’ll be moving within the next several years.

30-year fixed rate mortgages

The 30-year conventional fixed-rate mortgage has long been popular due to its fixed interest rate and lower monthly payments. However, since the interest payments are spread out over 30 years, you’ll pay more interest over the life of the loan than you would on a shorter-term mortgage.

15- and 20-year fixed-rate mortgages

With a short loan term and lower interest rate, a 15- or 20-year fixed-rate mortgage can help you pay off your home faster and build equity more quickly, although your monthly payments will be higher than with a 30-year loan. The 15- and 20-year fixed-rate mortgages are especially popular for refinancing.

Fixed Rate Benefits and Considerations

No interest rate surprises

With a fixed-rate mortgage, the interest rate won’t change for the life of your loan, protecting you from the possibility of rising interest rates.

The best fixed rate

Conventional mortgages may offer a lower interest rate and APR than other types of fixed-rate loans.

Fewer hoops to jump through

Conventional mortgages may require less documentation than FHA loans or VA loans, which could speed up the overall processing time.

Refinancing options available

Conventional fixed-rate mortgages are available for refinancing your existing mortgage, too – and 15- and 20-year options are especially popular.

Fixed Rate Requirements and Qualifications

Loan amount

The loan amount for a conforming mortgage is generally limited to $424,100 for a single-family home, though limits may be higher in regions where home prices are higher. Jumbo loans allow you to exceed the conforming loan limit to borrow for a higher-priced home.

Down payment

Most conventional loans will require at least 5 percent (and optimally 20 percent or more) as a down payment. For loans with lower down-payment requirements, explore government-backed mortgages like VA loans and FHA loans or speak to your Mortgage Loan officer about other options that may be available.

Credit history

Conventional loans are a good choice for borrowers with very good credit, which generally means a FICO score of 740 or higher. There are also established guidelines for income and other personal financial information.

USDA mortgages are a popular option, but they’re not the only one. Contact a mortgage loan officer to find out which mortgage option may be the best fit for you.

Final Thoughts

Don’t let the complexities of securing a mortgage hold you back.

Anew Lending’s team of experts will guide you through the process with personalized consultation and a variety of loan programs to choose from.

With their commitment to honesty and integrity, you can trust that they’ll make home ownership in Sacramento accessible for you.

Take the first step towards your dream home today and schedule your consultation with Anew Lending!

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