The USDA Rural Mortgage Loan was one of the only remaining 100% loan-to-value opportunities for lower income buyers who do not have a lot of savings for downpayment. Bobby Wallace from Anchor Mortgage sent me a very timely reminder email that I thought would be good to share with the followers of this blog:
The changes being implemented as of October 1st are:
- "USDA will now start requiring a Mortgage Insurance Premium on these loans.
- USDA will now require a 0.3% annual mortgage insurance fee. While this fee is an annual fee, it is collected monthly in escrow like most Mortgage insurance payments. Another major difference between USDA’s annual MI premium and most other premiums. USDA’s annual MI premium will be assessed the entire life of the loan. Mortgage insurance on both conventional and FHA Loans is scheduled to cancel when the loan balance reaches 78% of the original purchase price. For an FHA loan with a 3.5% down payment, this is sometime between year 12 and 13."
This table shows the difference in monthly payment for a $100,000 loan between the CURRENT and the FUTURE USDA programs.
As you can see, if you are thinking of using this program to buy a home, it is VERY DESIRABLE to act soon!
If you have any questions about loan programs, please contact Bobby Wallace at 843-200-5617.
If you are ready to start the home buying process, please contact us or call us on 843-864-3777.