Don’t get us wrong, though: the USDA mortgage is quite the secret in the real estate market. Just check this article out for yourself. If there was a way for someone to get a home loan approval fast and easy, it would be the USDA. But there are certain guidelines to keep in mind.
It’s called the debt-to-income ratio. How much debt do you have? Is it ruining your credit? Do you need Lexington Law or Independent Credit Solutions to help you through those muddy waters? Good. Do it. But bear in mind that if the debt, plus the mortgage amount, just happens to be over 31% of your actual monthly income, the specific loan might be a no for you.
The VA program, another mortgage program out there, sticks to the similar rule: 41% is their measuring stick. Jumbo mortgage loans, the conventional ones, however, tend to stick to lower ratios overall given the assumption that when you take out a home loan, you’re entrusted to pay it every month despite whatever debt you already have.
It’s to protect you from buying a home that might be too expensive. When debt continues to drown you out, foreclosure commences. That’s something this real estate market won’t want given the growth we’re seeing in down payment averages and home prices.