Special offer

New Monthly Mortgage Insurance For USDA Loans October 1, 2012

Reblogger Terrie Leighton
Real Estate Agent with Ferrari-Lund Real Estate NV LIC: S.0061129

Not a huge change in the USDA loan program but a change none the less. But only 1% change so it should not effect your monthly payment to much. The best part of the USDA loan is not changing ~ the USDA loan provides 100%  financing to qualified buyers!!

Thank you Brain Mayer for sharing this update!

Original content by Brian & Val Mayer

New USDA Mortgage Insurance

 

usda mortgage insurance

As of October 1, 2012 the annual MI on all USDA loans is increasing from .3% to .4%. This should not be a huge concern as the rate is still relatively low especially compared to FHA which is at 1.25%.

On a 200k loan the usda monthly mortgage insurance will go from $50 per month to $66.67 per month a difference of $16.67. The up front MI will stay the same at 2% for new purchase.

USDA Refinance

 

On USDA Refinances (which are currently out of funds until at least October 2012) will also incur an annual MI increase from .3% to .4%. The up front will increase from 1.5% to 2% to match the structure of new purchase.

The way the annual rate is calculated is to take the original loan amount and multiply it by .004 (this will give you the annual) then divide it by 12 which will give you the monthly cost. 200,000 x .004 = 800 / 12 = 66.66

USDA Loans are still an extremely strong loan compared to FHA and Conventional and with no down payment requirement its a no brainer for most people who qualify.

Posted by

Certified Residential Specialist

Your Home. My Priority. Since 2003

NV LIC: S.0061129 PM #167199

Certified Residential Specialist (CRS)
Certified Default Resolution Specialist (CDRS)
Short Sales & Foreclosure Resource ~ Certified (SFR)
NAR's Green Designation ~ Certified Green
Certified Negotiation Expert (CNE)

Ferrari-Lund Real Estate

 Cell ~ 775.846.5424

Email ~ Terrie@terrieleighton.com

 

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Comments(3)

Raj Singh
Better Homes and Gardens_ MASON-McDUFFIE Real Estate - Fremont, CA
Thanks for info. I learnt something new today and will surely share it with my clients.
Aug 21, 2012 10:59 AM
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Terrie, Thanks for the information.  The more we know now will help us next month.  Have a good one.

Aug 21, 2012 12:39 PM
Kristin Johnston - REALTOR®
RE/MAX Platinum - Waukesha, WI
Giving Back With Each Home Sold!

I don't do many usda loan deals, but I do have one going on right now....the lender said the funding may run out, but seems like I hear that every year?

Aug 21, 2012 11:50 PM