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Unlocking Homeownership in Rural America: USDA Loans and April's Rates

Farmhouse nestled in a field with USDA Loans written in the sky.

USDA Loans

USDA loans are government backed loans offered by the US Department of Agriculture. These loans are designed to help moderate- to low-income families in eligible rural and suburban areas become homeowners. The USDA wants to incentivize growth in these areas by helping make homeownership more affordable.

USDA Loan Benefits:

  • Zero Down Payment 

  • Flexible Credit Guidelines 

Qualifications For a USDA loan:

  • USDA loans tend to be more flexible on credit score requirements.

  • Income limits can’t exceed more than 115% of median household income

Is a USDA Loan a Conventional Loan?

A common question people ask is: “Is a USDA Loan a Conventional Loan?” The answer is no. A USDA Loan is backed by a government agency while Conventional Loans are not. USDA Loans are specific to rural and suburban areas and they come with income limitations and location requirements. Conventional Loans are offered by private lenders, requiring down payments and are more flexible when it comes to location and property type. 

These minimum requirements apply to some of our loan options. There are many other alternatives and requirements available as well.

April Mortgage Rates

April Mortgage Rates written next to a hand placing a wooden block with a percentage sign on it in an exponentially upward trend.

We are currently seeing another week of elevated mortgage rates. According to Bankrate, on April 29th, we ended the month with an average of 7.32% for a 30-year fixed, 6.80% for a 15-year fixed rate, and 6.70% for a 5/1 adjustable mortgage rate.

One thing to remember is individual rates will vary. Rates also depend on your credit score, loan amount and more. Make sure to stay on top of mortgage rates so you can get the best deal for your dream home!

What Does This Mean For You?

For homebuyers who are financially ready, now might be a good time to look at houses. With interest rates currently fluctuating between 6-7%, there is less competition. When rates do fall, that will spike demand and now is a great time to get ahead of that demand. For home sellers, the selling times might be a little longer. Since interest rates are higher than we have experienced in the past, the buying pool has shrunk and there are less qualified buyers. 

Overall, the housing market is adjusting to new highs, allowing new opportunities for homebuyers and sellers. 

How To Get The Best Mortgage Rate?

Your mortgage rates are based on a bunch of different factors such as credit score, size of your loan, and loan term. 

  • Credit score: Lenders offer the best mortgage rates to individuals with high credit scores. Typically about 740.

  • Size of your loan: The more you have saved up and can put down when buying your home can also help with your mortgage rate. The bigger the down payment the smaller the principal balance (helps you save money on monthly home payments). 

  • Loan term: 30-year mortgage interest rates tend to be higher than 15-year mortgage interest rates. Yes, you’ll be paying more in monthly payments with a 15-year mortgage loan, but the interest rates are lower. Based on your financial situation, you and your mortgage lender will decide what would be best for you. 

Overall, to get the best mortgage rate, it’s best to look at multiple loan officers at different companies. Different companies offer different rates, so having multiple offers to choose from will allow you to find what rate is best for you and your financial situation. 

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