With the recent guideline changes by the Mortgage insurance companies not allowing mortgage insurance on 100% loans without a 680 fico, government loans are looking attractive.
Government loans have a self insured mortgage insurance usually called a funding fee or MIP, in the case of FHA loans. They can be rolled into the loan, so in effect you're client is getting 102% financing.
Funding fees vary by program. Rural Development has a 2% fee. FHA, 2%, but 1.5% is rolled into the loan and the other .5% is paid monthly. VA varies according to how many times the veteran has used their entitlement.
For those clients who are needing 100% financing, it pays to take a second look at those government programs.
For those clients in Idaho, call me. I would be happy to show you the advantages of government financing.
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