How do you calculate a USDA monthly payment?
When trying to use a USDA loan calculator – be careful! Many online mortgage calculators are simply not designed to handle calculating USDA specific monthly payments. They may leave out other important items such as property taxes, homeowner’s insurance, and any associated USDA fees.
Especially when housing markets can be tight and qualifying budgets are so critical, today’s topic is an important one because it will walk you through the steps on how to properly calculate a USDA monthly payment.
Feel free to use our specific USDA Loan Calculator. It is to the right if you are desktop, or scroll down to the bottom on mobile.
However, if you have a qualifying question or a transaction that is experiencing trouble, remember that I started Metroplex way back in 2001, so let our experience be a resource for you and take advantage of our Free Second Opinion Service (“SOS”) which can be a great way to help keep your mortgage approval headed in the right direction!
How to Calculate a USDA Monthly Payment
When calculating your USDA monthly payment, it is important to remember the following:
1. Taxes and Insurance
These are two items that are sometimes overlooked but are a required part of the USDA loan qualifying process when determining qualifying ratios and monthly housing expenses. If you are unsure about property tax estimates, a good tip is to check with your local property tax collector who can be a resource to help with questions.
2. Principal and Interest
The principal part of your payment goes towards paying down the loan balance while the interest is the cost paid for borrowing your loan amount. Remember interest rates change daily and multiple factors contribute to your interest rate calculation, so please call us if you have any specific rate and payment scenario questions.
3. The USDA Guarantee Fee and Monthly Premium
USDA home loans require 2 separate fees:
- The USDA Guarantee Fee is a one time charge of 1.00% that is financed into the final loan amount.
- While the USDA monthly premium of .35% is calculated on a monthly basis and is part of your total monthly housing expense.
Our USDA Loan Calculator
To help you in the process, we have created a USDA payment calculator. Let’s go over a quick example to help you get started:
- Type in your purchase price
- USDA Guaranteed loan terms will be for 30 years
- Select your interest rate (Remember that interest rates do change every day)
- Input the estimated annual property taxes
- Input the estimated annual homeowner’s insurance premium
(Remember that property taxes and insurance will vary from property to property)
- Review your total estimated USDA monthly housing expense
Based on the numbers selected, our USDA Loan Calculator automatically factors both the USDA Guarantee Fee and the monthly premium into the housing expense estimate listed.
When it comes to government loan programs I always say, don’t be scared – be aware! Just call or email to discuss your scenario, and let us show you the “Metroplex” difference! Learn what it means to have the strength and experience of the 2017 #1 Ranked USDA Approved Lender in Florida working for your benefit!
(800)806-9836 Ext 280
Please note, that this calculator is for estimating purposes only, minimum credit conditions will apply on all loans, and this is not a Good Faith Estimate nor a commitment to lend. You can forward this video and share our USDA payment calculator with anyone who may benefit and remember to always call my team with questions.
Don’t forget to download our USDA Blueprint for Success educational resource. This complimentary guide is designed to walk you through the USDA qualifying process step-by-step and is ideal for both homebuyers and Realtors alike.