Did you know that the USDA monthly fee was reduced?
Did you know that the USDA monthly fee was reduced?
In case you have not heard, I have great news to report that immediately will help homebuyers save money and allow more flexibility in their qualifying budget.
Today’s video tip will share the details on how this major savings will have an immediate impact and help further maximize your USDA loan qualification.
Remember, if you need help or a have question that is what we are here for, so just call or email to discuss your scenario because we are known for returning calls, replying to emails, and responding to your messages. Now, wouldn’t it be nice if everyone did that!
As of October 1st, the USDA Program (Single Family Housing Guaranteed Loan Program – SFHGLP) has reduced their program costs to the following:
The USDA annual fee which is how the monthly premium is calculated will be reduced from .50% to .35%, which is drastically lower when compared to the monthly mortgage insurance paid on an FHA loan.
Remember, although the USDA monthly fee is not technically PMI (Private mortgage insurance), many compare it to that which is found on FHA or Conventional loans because like PMI, it is a separate monthly charge within the payment along with applicable home or flood insurance, taxes, and your principal and interest.
Additionally, the USDA Upfront Guarantee Fee, which is the one-time fee that is able to be financed into the loan at time of closing, is being reduced from 2.75% to 1% – another tremendous savings!
The combination of being able to finance less on your loan due to the reduced Guarantee Fee and the improved monthly fee is able to provide an immediate savings to homebuyers and thus increase affordability.
So, what does this mean to you? Because of the increased affordability, now is a great time to review your qualifying limits and see if you may be able to increase your available USDA qualifying sales price and still be able to stay within budget.
And remember, you can always take advantage of our free Second Opinion Service (SOS) for an expert opinion whether you have an existing loan in progress or are just looking to maximize your USDA pre-qualification.
