There are some changes to the USDA Guaranteed Rural Housing (GRH) loan that are taking effect on 10/01/2011.
Loans that are not issued a USDA commitment letter prior to 10/01/2011 will be subject to the new annual and up-front fees. So that means by 09/30/2011!
With only 36 days remaining, please let your borrowers know they need to act NOW!
Here is an example reflecting the new changes:
|
NEW USDA |
Old USDA |
|
|
Purchase Price |
$200,000.00 |
$200,000.00 |
|
(+) Upfront Fee (#1) |
2% = $4,000.00 |
3.5% = $7,000.00 |
|
Total Loan Amount |
$204,000.00 |
$207,000.00 |
|
|
|
|
|
Interest Rate (#2) |
4.25% |
4.25% |
|
|
|
|
|
Principle & Interest |
$1,003.56 |
$1,018.32 |
|
Annual Premium (#3) |
$50.61 |
$0.00 |
|
Monthly Payment (#4) |
$1,054.17 |
$1,018.32 |
|
Difference |
+$35.85 |
|
|
Total Annual Fee Calculated over 30 years |
$11,075.05 |
Notes:
(1) Decreased guarantee fee from 3.5% to 2.00% (which can still be financed into the loan – 102%)
(2) 30 year fixed rate is for demonstration purposes only.
(3) Implementation of a .30% annual fee (like monthly mortgage insurance) which will be calculated as follows:
-
Initial fee for the first year will be based upon the loan amount and escrowed into the borrower’s mortgage payment.
-
The fee will be calculated annually based upon the unpaid principle balance.
-
Annual fee will paid for the life of the loan.
(4) Monthly payment only reflects principle/interest/ annual premium.
If you have any questions about these changes or with the USDA GRH loan, please let me know.
For more information about mortgage financing, please contact DOUG CAPPS at (662) 429-5100 ext. 105. NMLS ID #68160.
Fairway Independent Mortgage Corporation, 224 West Commerce St, Hernando, MS 38632 is a "MS and TN Licensed Mortgage Company." NMLS ID #2289. An Equal Housing Lender. All loans are subject to credit approval and compliance with investor guidelines.
Know your mortgage options!
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