100% USDA Loans Now Cheaper: Lower MI in 2017 for USDA Loans

usda 2The USDA Guaranteed Rural Housing Development Loan (aka USDA RHD Loan) is extremely popular with Millennial Home Buyers.  That’s because the program requires Zero Down Payment. That’s right… 100% Financing is available to purchase eligible properties in select areas of Connecticut.

And, it just got more attractive  Just in time for the New Year, the USDA lowered its new year.jpgUp-Front Mortgage Guarantee Fee from 2.75% to 1.00%. And… it also reduced its Monthly Mortgage Insurance Premium from 0.50% to 0.35%

The USDA loan is now one of the most affordable home loans available, This fee reduction makes the RHD less expensive than FHA products. A USDA home loan can make owning a home less expensive than renting one  and could be the avenue for Millennial Home Buyers to move into a new home in 2017. 

What Is a  USDA Loan? The United States Department of Agriculture partners with approved local lenders to assist homebuyers with competitive interest rates and loan terms to buy their primary residence in select areas of Connecticut

The Program Offers:
usda 3100% Financing – No Down Payment is Required. Coming up with a Down Payment is one of the biggest barriers to entry into the housing market for Millennial Home Buyers. A USDA mortgage eliminates that obstacle.

Closing Costs Can Be Rolled Into the Loan Amount. The closing costs associated with obtaining a mortgage can be included in the loan amount when the appraised value exceeds the contracted sales price.
Liberal Credit Scores. The USDA Guarantee allows lenders to approve mortgages that would not qualify under guidelines for other programs. Applicants with credit scores down to 640 are eligible for this loan.
Debt:Income Ratios: To qualify, you must meet debt-to-income requirements. The DTI ratio limits are 29% (for PITI) and 41%. The reduced fees make it easier to meet these ability to pay guidelines.

Millennial Home Buyers often chose the more expensive FHA loan program, even when they are buying in USDA-eligible areas. If you are buying in a suburban or rural area, it pays to check USDA eligibility maps. Choosing USDA can save you the 3.5% down payment that FHA requires. And, now that the reduced mortgage insurance fees are in effect, you can save money each month over FHA

Eligible home buyers should weigh the benefits of a USDA loan.

Questions First Home Buyers Should Ask

questionsKnowing when to think about buying a home can be challenging. You may not know what to consider when making the decision and it can be hard to think long-term. Here are some Questions First Home Buyers Should Ask themselves to determine if now is the right time to begin the home-buying process.

Am I staying here for a long time? If you are planning on living in the same place for the next five to ten years, you might be better off buying a home. You recoup the costs associated with buying a new home by living in it and building equity. Talk to your tax advisor about the tax benefits of owning a home too. And when you sell your house in years to come, the more equity you’ll have, the better off you’ll be.

Is my rent higher than a mortgage payment? Rent can add up, and you are essentially paying off somebody else’s mortgage. If the cost of your rent is more than the cost of owning and maintaining a home, you might want to consider your buying potential now.

Do I have enough money for a down payment? If you can determine the cost of a down payment and the cost of a monthly mortgage payment, and still have a small cushion for any life emergency, it would be worth the investment to look at purchasing a home. Talking to a mortgage professional can help you determine how much house you can afford.

Is my credit good? A high credit score helps you get the best deal on a loan. The higher your score, the lower your interest rate should be. Reviewing a copy of your credit will help you determine where you need to be in order to afford the house you want.

If you answered these questions truthfully and feel buying a home is in your best interest, thenGet Pre-Approved getting Mortgage Pre-Approval is the next step. Every First Home Buyer has different things to consider and different options available to them.  Speaking with a mortgage professional is the best place to start.

Most First Home Buyers come to me for Mortgage Pre-Approval with big dreams, high hopes and a lot of questions. Too often folks want to buy a home in a price range they cannot afford. It is my job as a Mortgage Consultant to help First home Buyers set realistic expectations and help them see how big a house they can afford and how large a mortgage they qualify for. Getting prospective home buyers Pre-Approved for mortgage is an exercise to insure that “families live comfortably and financially secure in their own home.”