Planning to settle down in a rural area? You may want to consider purchasing a home with USDA loans in Colorado instead of renting. This type of mortgage loan offers a lot of benefits such as:
Since USDA loans are backed by the government, lenders are able to be more generous when it comes to interest rates. In fact, they have some of the lowest interest rates on mortgage loans in the market. If you have a very good credit record, you can borrow a loan with cheaper interest—as low as 1%.
No down payment
Like VA loans, USDA home loans also require zero down payment from borrowers, making them a great option for people who fall under the low-income earner category. With this loan, you can finance a new home immediately without having to save years for a down payment.
Affordable monthly mortgage insurance
To make USDA loans Colorado even more friendly towards low-income families, the loans don’t come with private mortgage insurance. Instead, they require a 1% upfront funding fee and a 0.35% annual fee. That means if you borrowed a $200,000 mortgage, you need to pay for a $2,000 upfront funding fee and $58 monthly. This is often better than paying for PMI.
Plenty of properties to choose from
The term “rural” conjures images of farms with animals and haystacks. However, under USDA standards, rural residential areas also cover suburban areas of Colorado as long as the population is less than 35,000. In fact, many homes in mid-sized cities are eligible.
You also have more options to choose from when it comes to the types of homes that you can buy with a USDA home loan. You can purchase an existing home or go for a brand-new one. You may also buy a condo, a modular home, or a manufactured house.