The USDA /Rural Development announced starting October 1st, 2011, they will begin collecting a monthly mortgage insurance premium of .3% on all new USDA home loans. However, the up front (one-time) mortgage insurance cost will be reduced from 3.5% to 2%.
So what does this mean for home buyers using the USDA loan program after Oct 1st ? In short, monthly mortgage payments will be going up slightly. In Florida, the average USDA home loan purchase price is around $125,000. Based on this, starting Oct 1st, the monthly payment of these loans will increase by $20.00 per month.
Keep in mind the core benefit of USDA home loans remain - it’s still 100% financing. Along with VA home loans, USDA is the only other option for 100% home financing in Florida. However, to use the VA home loan the borrower must be active or past military. So for civilians, the USDA is the ONLY option for 100% financing in Florida.
How will USDA home loans compare to FHA home loans after Oct 1st ? USDA is now, and will remain the clear winner. Not only does FHA require a min down payment of 3.5%, it will also will cost $54.00 per month more than USDA using the $125,000 purchase price example above. The cost difference will obviously be much greater when talking about $200,000 + purchase prices. The cost of FHA are going up as well in a few weeks- please read here
Questions about USDA home loans in Florida ? Please visit our main web site by clicking here.
USDA Mortgage Source is Florida’s LOCAL leader for all 100% USDA / RD home loans. Serving all of Florida including Sarasota , Naples , Orlando , Daytona Beach. Please visit our main web site at www.UsdaMortgageSource.com or call 904.302.6060 to learn more about the benefits of 100% USDA / Rural Development home loans here in Florida. We are available to serve you seven days a week.
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