Texas: USDA announced they are reducing the upfront Guarantee fee and the Annual mortgage insurance fee (paid monthly) for refinance and purchase loans. Lower costs for the ZERO down USDA loan will help make USDA financing for rural home buyers even more affordable (as if they weren’t already),
The lowered USDA insurance fee began October 1st, 2016 and extend out through out the future.
The USDA Guarantee Fee is similar to what FHA calls their upfront mortgage insurance premium (UFMIP) and VA calls a funding fee.
The USDA Annual fee, which is actually paid monthly, is similar to FHA’s annual mortgage insurance premium (MIP), basically the same thing but different name.
The USDA Rural Development home loan is a zero down payment (100% financing)government insured mortgage program for people buying in rural designated areas who meet the family household income limit.
USDA eligible borrowers do not have to first time homebuyers.
|USDA GUARANTEE FEE||USDA ANNUAL FEE|
How Much Will the Lower USDA Fees Save You?
On a $125,000 home, the new lower USDA upfront Guarantee fee of 1.0% will save you $2,187.50! This will help keep your loan balance lower because the USDA upfront Guarantee fee is normally added to the loan balance.
The new .35% annual fee (paid monthly) will reduce the payment by approximately $375/year or $31.25/month.
Why Would USDA Reduce Their Fees?
The USDA said the primary reason for lowering the Guarantee and Annual fee is the delinquency and foreclosure rates have gone down significantly, thus reducing the risk associate with 100% financing.
Less risk means lower fees for USDA homebuyers, so they pass on their savings to you!
You Have Options – Get the Facts!
The fact is, USDA is a loan program that very few banks and loan officers offer their borrowers. In fact, Bank of America and many other large retail banking giants no longer offer the USDA loan.
Banks that don’t offer USDA or the other ‘niche’ loan programs that we offer, will often purposely withhold educating and informing their customers in hopes they don’t go elsewhere for their mortgage.
And don’t think USDA is the only low down payment option you have.
If you would like to find out of you can qualify for a USDA loan and interested in comparing that option with several other homebuyer assistance programs that offer down payment and closing cost assistance, call me at 512-799-0133, or email me at email@example.com.