USDA will implement a new monthly fee starting October 1, 2011. Most people in the mortgage industry will consider this a mortgage insurance premium (MIP). Up until now one of the unique features of a USDA home loan is it had no MIP. This addition of MIP will mean a higher mortgage payment.
Fortunately the rate is not as high as FHA’s MIP. It is one third the amount of FH’s. A $100,000 USDA mortgage will have an addition MIP payment of $29.17. For comparison purposes an FHA loan of $100,000 would have a monthly MIP payment of $95.83. As long as this is not a start of a series of USDA raises, it should have a small effect on the number of borrowers qualifying for a USDA mortgage.
Another difference between USDA and FHA is the FHA MIP would drop after 5 years and reaching a loan to value percentage of 78%. The USDA MIP is for the life of the loan.
In the same announcement USDA is lowering their upfront guaranteed fee from 3.5% to 2.00%.
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Who Can You Call For Your Mortgage Needs in North Carolina?
Call Shay Campbell a licensed Loan Officer, NMLS# 46083 and LO5 designation, located in the Triangle area of NC, which includes Raleigh, Cary, Durham, Chapel Hill, Apex, Holly Springs, RTP and the counties of Wake, Durham, Johnston, Chatham and Orange. Shay has over 12 years of originating experience in North Carolina and can assist you with FHA, VA, USDA, NCHFA and conventional loans. He has a special interest in working with first time home buyers. Shay can be contacted at 919-624-8614, shay@shaycampbellmortgage.com or visit his website at shaycampbellmortgage.com.
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