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.


Thomaston CT Homes for Sale – Eligible for 100% USDA Financing

usda 3These selected Homes for Sale in Thomaston CT are Eligible for up to 100% USDA Financing with a Guaranteed Rural Housing Development Loan.

The USDA Guaranteed Rural Housing Development Loan offers many benefits to qualified buyers:
•   Up to 100% Financing of the home’s Appraised ValueNo Down Payment Required
•   Ability to Finance the Closing Costs in the loan when the Appraised Value is higher than the negotiated sales price
•   One 30 year fixed rate mortgage at low-interest rates
•   Reduced Mortgage Insurance beats FHA and increases buying power.

Call Me @ 860.945.9284 to discuss the right mortgage option for your family and to take advantage of my FREE Jump Start Mortgage Pre-Approval service.
With USDA Guaranteed Rural Housing Development Loan you just might be able to move in to a new home this New Year with a minimal down payment and low to no closing costs.


52 Stoughton St, Thomaston, CT  

It’s so much larger than it appears. Plenty of room to stretch out in this well cared for cape style home boasting 4 BRs with a full bath on each floor. Many possibilities for small. large or extended families.
Ideal for Millennial First Home Buyers.

174 Edgewood Avenue, Thomaston, CT

Charming 4 BR ranch with many extras. Reduced price for New Year sale



Please Note; Most single-family properties for sale in Thomaston, CT are eligible for the USDA Guaranteed Rural Housing Development Loan program. Condos too, as long as the HOA meets FNMA and FHA guidelines. The program has liberal income limits and DTI ratios that might enable buyers of other high-end homes to qualify for this program. Call me for details.

3 Kittredge Lane, Winsted CT For Sale – Eligible for 100% USDA Financing

3 Kittredge LaneOversize 4BR Cape is a must see for First Home Buyers!
It’s Eligible For up to 100% Financing with a USDA RHD mortgage. Closing costs can be included in loan amount. Low rates! Low MI! Beats FHA and CHFA any day!
Call Me at 860.945.9284 for details on the USDA Guaranteed Rural Housing Development Loan and to take advantage of my FREE  Mortgage Pre-Approval service
Then Call Toni Osterhout  at  Elite Realty 860.482.8394 to schedule a showing and be ready to make an offer.

FHA Wants More Fees? Not Again!

fha logoThe FHA is asking for authority to collect an administrative fee from borrowers to help they say, “further develop its quality assurance efforts.”  This on top of reports they will have a $7.8 billion capital reserve balance at the end of Fiscal 2014 and will not require another bailout from the U.S. Treasury.

The report triggered an immediate call for FHA to reduce the Insurance Premiums it currently charges home buyers. Keep in mind, FHA increased their Annual Mortgage Insurance Premium (MIP) and their Upfront Mortgage Insurance Premium (UFMIP) in 2013 to bolster their Mortgage Insurance Fund that was depleted in the aftermath of the housing crisis. They later required the MIP to be paid for the life of the loan. These increases were on top of increases imposed back in 2011.

home-prices-riseSomething doesn’t make sense! Here we have a federal agency whose main objective is to “assist in providing housing opportunities for low and moderate-income families.” Yet if one reads between the lines, management is still having quality control issues and is too embarrassed to ask Congress for more money to correct them. Instead let’s force new home buyers pay for the sins of the past by increasing their closing costs again…making it more expensive to own a new home!

And they say the housing market is on the way back? Not with this kind of mentality!

How Much Mortgage Can I Afford?


I particularly like drawing on my education background to help First Homebuyers answer thedream burning question “How Much Mortgage Can I Afford?” They’re excited about this great adventure and I am excited to be trusted to help put their plans together. There is a lot to learn about the process and it takes patience and skill to ensure that these dreams do not turn into a nightmare.

There’s a big difference between How Much Mortgage Can I Afford? and How Big a House Can I Buy?  Theoretically, a borrower with $50,000 income can afford a $1,000,000 home if they just won the lottery and used their savings wisely to pay the for the taxes and upkeep.

So Not too far into our initial conversation, I always ask the question, “Have you given any thought to How Much Mortgage Payment Can You Afford each month?”  Some like John and Beth who just had a new baby and need a place to call home did have a figure in mind. Surprisingly, many reply, “No that’s what we hope you can tell us?” To which I reply, “No, That’s your job!

FHA MIIf you are a First Home Buyer, you might have searched on-line for one of those How Much Mortgage Can I Afford calculators. These calculate your debt-to-income ratio by plugging in certain income, expense and projected housing costs to arrive at an estimate of what a bank may lend you for a mortgage.

Effective January 2014, the Consumer Finance Protection Bureau has mandated that a 43% debt-to-income ratio is the highest ratio can have andGet Pre-Approved still get a Qualified Mortgage.  A Qualified Mortgage is a category of loans that have certain, more stable features that help make it more likely that you’ll be able to afford your loan. And when you eventually apply for Mortgage Pre-Approval, that’s just what the Bank will do; It will tell the maximum amount it will lend you.

 “Purchase or Refinance…I help families live comfortably and financially secure in their own home.” That’s what it says on my letterhead and that’s what I promise all my clients. So when John and Beth throw out a figure, I ask, “Does that include the mortgage payment, property taxes, home insurance, and mortgage insurance. How about maintenance costs? For them and all the others, we go back to basics.

The 43% ratio is based on borrowers gross before tax income and not net take home pay. It includes the mortgage payment, an escrow for property taxes, home insurance; and mortgage insurance (PMI); plus condo fees, debt payments, and alimony or child support if applicable.

Here’s the issue with these scenarios … The bank (and those calculators) aren’t telling you how home shoppingmuch house you can comfortably afford. They’re only telling you the maximum they’ll actually lend you. Too often, I have seen First Home Buyers shop for homes at the top of their affordability range, only to find themselves in a difficult financial situation a few years down the road. A temporary job loss, a hike in property taxes (I could go on forever about this issue), a new car, orthodontics, can send homeowners financial situation spiraling out of control.

When I talk to First Home Buyers … we talk about these potential calamities and whether they might have to rethink How Much Mortgage I Can Afford if they had to squeeze their budget to make the monthly mortgage – or if one of these emergencies required them to take money out of the college fund to make ends meet. “It’s not up to me to decide How Much Mortgage I Can Afford,” I ask, It’s up to you to rethink your mortgage goals.”

Bottom Line: Home Buyers aren’t, by any means, required to take all the money a Bank offers to loan them.  No one says  you can’t buy a buy a $150,000 home even if you technically qualify co-signfor a $200,000 mortgage. But before you buy a home at all, consider how a mortgage payment – and other homeownership costs – will affect your budget. That way, you won’t wind up in over your head worried about making your house payment.


52 Prospect St, Terryville CT For Sale – Eligible for 100% USDA Financing

52 Prospect St TerryvilleAttention First Home Buyers. Looking For Space? This Home Has It!
And … It’s Eligible for Up to 100% Financing with a USDA Guaranteed Rural Housing Development Loan.
Buyers have ability to roll the Closing Costs into Loan amount. Low Rates! Low Mortgage Insurance! Low Monthly Payments! Beats FHA any day.


Call Rick Cignoli at 860.945.9284 for details on the USDA Guaranteed Rural Housing Development Loan and to take advantage of my FREE Mortgage Pre-Approval service.

Then Call Stonecrest Realty 203-592-5201 to schedule a showing and be ready to make an offer

FHA Too Expensive for Home Buyers. There Are Other Options.

FHA says they should have done less business in the past and (to pay for their sins) they should do less business in the future. To help that process along, they drastically increased the Up Front Mortgage Insurance Premium (UFMIP), doubled the cost of the Monthly Insurance Premium (MIP), and will require the MIP to be paid for the life of the loan.

FHA MIGuess what? Their wish is coming true!  The Government Agency created in 1934 to “assist in providing housing opportunities” for American families saw their application volume drop by 50% in June. At a time when mortgage rates were near all time lows, FHA priced them self out of the market. Great help they are!

Many features of a FHA Mortgage make it an attractive mortgage option for First Home Buyers. However, the cost of the mortgage insurance makes the monthly obligation too expensive. I’m working on two transactions now. Each has challenges that could have been addressed with a FHA loan in the past.  One will be done as a conventional mortgage with a higher rate but lower MI for a savings of $60/month; the other, luckily, as a USDA Loan with a similar rate and MI that is 1/3 the cost of FHA premiums.

I don’t think I’ll recommend a FHA Insured Mortgage to my clients unless that’s the only way to get them in a new home.