It has just been announced that USDA loans monthly Mortgage Insurance will be increasing on 10/1/11. These changes apply to any case number ordered on 10/1/11 and after. Currently USDA loans have no monthly mortgage insurance, but after 10/1/11 that will be increasing to .30. On a $100,000 loan that will equal to a $25 increase in the borrowers payment.
On a positive note the upfront Mortgage Insurance Premium will decrease from 3.5% to 2%. This move in by itself would decrease the payment by $8 a month.
In the end, on and after 10/1/11 USDA loans with have an increase in payment. On a $110k loan it will be an increase of about $17 a month. Keep in mind that not only is this a small increase but USDA loans are also an amazing program. They allow 0% down payment and the monthly mortgage insurance is still about 1/3rd of what the monthly mortgage insurance is for a FHA loan. If you are buying a home located in a rural area, USDA loans are the best way to go. To find out if a home qualifies for a USDA loan check out: USDA. They do have income requirements for home buyers so call me today to see if you qualify for a USDA loan.