USDA loan monthly mortgage insurance is coming!

By
Mortgage Banker with C&F Mortgage | No Money Down Mortgages 224624

USDA loan monthly mortgage insurance

usda mortgage lenderGet ready for some upcoming changes to USDA mortgages. They are for the first time incorporating monthly mortgage insurance and its going to have an effect on how much you can borrow. The bad news is that your payment will increase however its not all bad.

USDA mortgage insurance details:

The USDA monthly mortgage insurancefor new USDA loans after October 1, 2011 will be .3% annually. The up-front mortgage insurance premium is going from 3.5% back to 2%.

What does this mean to you?

It means that although the up front premium is going down 1.5% there is now monthly mortgage insurance and your payment will go up overall. On an average 250k loan amount the increase in payment is around $44 dollars per month (at 4.5% interest.) That might not sound like a huge amount of money however if your debt to income ratio is right on the edge and you were qualified prior to October 1, you should call your USDA mortgage companyand make sure you are still qualified after the change.

Good News for USDA Loans

There is a small yet bright light in all of this seemingly endless tightening of lending restrictions of Government Programs. If you obtain a USDA loan after October 1, 2011 and sell your house before owning it for 7 years you will actually have spent less total money than under the previous guidelines (assuming you paid the minimum monthly payment and put no money down.) USDA is still 100% financing and there is still no down payment requirement so overall the program remains extremely competitive against FHA or even VA in some circumstances.

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Re-Bloggged 6 times:

Re-Blogged By Re-Blogged At
  1. Lenn Harley 09/12/2011 07:14 PM
  2. Donald Bradbury 09/12/2011 07:17 PM
  3. Amanda Howard 09/12/2011 07:47 PM
  4. Linda Lipscomb 09/14/2011 12:25 AM
  5. Gita Bantwal 09/14/2011 03:59 PM
  6. Gabe Sanders 09/19/2011 06:53 AM
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Topic:
Mortgage / Finance
Location:
Maryland
Tags:
usda mortgage company
usda mortgage insurance
usda monthly mortgage insurance
usda mortgage lender
usda loan
rural development loan
ru

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Rainmaker
863,476
Michael Setunsky
Your Commercial Real Estate Link to Northern VA
Michael's Commercial LLC

Brain, even with the extra fee, this is a very good program for buyers who qualify.

September 13, 2011 08:41 AM
Ambassador
1,200,689
Erica Ramus
MRE, Schuylkill County PA Real Estate
Erica Ramus - Ramus Realty Group - Pottsville, PA

Thank you for this info. Here in PA we see a lot of USDA loans on our properties. 

September 13, 2011 09:41 AM
Rainer
10,664
Rebecca Madej
Lender in NC, SC, VA & TN
Cunningham & Company Mortgage Bankers

Great explanation of the USDA changes.  We see it used here in the Charlotte area quite frequently as well.

September 13, 2011 01:01 PM
Anonymous #11
Anonymous
Dacey

USDA mortgage insurance seems to be a good insurance policy and it think it is the best policy i ever heard USDA is still 100% financing and there is still no down payment requirement so overall the program remains extremely competitive against FHA or even VA in some circumstances.

 

October 11, 2011 02:09 AM
Rainer
87,627
Phil Hillerman
Crye-Leike Realtors®
Crye-Leike Realtors®

Thanks for the post RD loans are one of the many tools we use here in NW Arkansas.

October 29, 2011 02:16 PM
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Rainmaker
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Brian Mayer

USDA Loan | Rural Development Loan
Have Questions? I Have Answers!
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