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USDA Loans in New Jersey - New Changes - Part 1 of 2
 
There will be a major change regarding USDA loans in New Jersey and for all other states come the fall of 2011. USDA loans will now have annual mortgage insurance, which is also known as monthly mortgage insurance, which begins October 1st, 2011. This move was approved through Congress last year.
 
What will be collected and how much?  The charge will be .30 basis points. Example:

 
As it stands, there is no monthly mortgage insurance right now.  The monthly fee will be based on the guaranteed loan amount. You can use simple math and say for every $50,000, the monthly mortgage insurance will be $12.50.  So for a $100,000 loan amount, your monthly mortgage insurance will be $25.00 a month. Keep in mind that my examples above won’t be this exact when doing a USDA loan, because of the formula that is used. But it will be very close.
Reminder :  The USDA monthly mortgage insurance will always be there, that it will never fall off as long as you have the USDA loan. This is unlike FHA loans, that it could fall off when you hit the 78% LTV. (fyi – There are reasons why your FHA or conventional mortgage ... more

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