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USDA loan monthly mortgage insurance is coming!

Reblogger Amanda Howard
Real Estate Agent with Century 21 Garner Properties

Because so many buyers are using USDA Rural Home loans in our area, it's important to be educated on changes to this extremely important program.

Original content by Brian & Val Mayer

USDA loan monthly mortgage insurance

usda mortgage lenderGet ready for some upcoming changes to USDA mortgages. They are for the first time incorporating monthly mortgage insurance and its going to have an effect on how much you can borrow. The bad news is that your payment will increase however its not all bad.

USDA mortgage insurance details:

The USDA monthly mortgage insurancefor new USDA loans after October 1, 2011 will be .3% annually. The up-front mortgage insurance premium is going from 3.5% back to 2%.

What does this mean to you?

It means that although the up front premium is going down 1.5% there is now monthly mortgage insurance and your payment will go up overall. On an average 250k loan amount the increase in payment is around $44 dollars per month (at 4.5% interest.) That might not sound like a huge amount of money however if your debt to income ratio is right on the edge and you were qualified prior to October 1, you should call your USDA mortgage companyand make sure you are still qualified after the change.

Good News for USDA Loans

There is a small yet bright light in all of this seemingly endless tightening of lending restrictions of Government Programs. If you obtain a USDA loan after October 1, 2011 and sell your house before owning it for 7 years you will actually have spent less total money than under the previous guidelines (assuming you paid the minimum monthly payment and put no money down.) USDA is still 100% financing and there is still no down payment requirement so overall the program remains extremely competitive against FHA or even VA in some circumstances.

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Realtor (R), Sales Agent
Century 21 Garner Properties
2855 Madison Pike, Independence, KY 41051
(859) 363-9900
amanda.howard@century21.com

All information and pictures copyright of Amanda Howard unless otherwise disclosed. If you are interested in using any of the information for any purposes, please contact me to request permission. Information provided here is not warranted. This communication is provided to you for informational purposes only and should not be relied upon by you. Century 21 Garner Properties is not a mortgage lender and so you should contact the entity providing mortgage product(s) identified directly to learn more about its mortgage products and your eligibility for such products.

Lynn911.com ~ Dallas Real Estate Agent Top Team
Dallas Houses for Rent Dallas Apartment Rentals Lynn911.com - Dallas, TX

Amanda we have a wonderful area here in Dallas most DON'T know be approved for USDA loans

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Sep 13, 2011 03:14 PM