2016 USDA / Rural Development Changes!
HUGE Announcement!!!!
The USDA made some major improvements to the Single Family Housing Guaranteed Loan Program also know as a Rural Development loan. The upfront guarantee fee changed from 2.75% to 1% of the loan amount and the annual fee changed from .5% to .35% of the average scheduled unpaid principal balance for the life of the loan. What’s that mean????
Here is a 150,000 example:
| Old Program | New Program | |
|---|---|---|
| Upfront Fee | $ 4,241.63 | $ 1,515 |
| Monthly Fee | $63.75 | $43.84 |
Now the really cool thing is the RD loan program is once again in many cases much more attractive to home buyers than an FHA loan. Lets run a quick comparison.
FHA VS RD $150,000 price, assuming 4% interest rate, $200 for property taxes, & $80 for insurance
| FHA | Rural Development | |
|---|---|---|
| Principle & Interest | $703.15 | $723.36 |
| Insurance | $80 | $80 |
| Taxes | $200 | $200 |
| Mortgage Ins. (PMI) | $101.71 | $43.84 |
| Total payment: | $1,084.86 | $1,047.20 |
| Down Payment Required | $5,250 | $0 |
| So RD saves $38 per month and is zero down! | ||
For more information feel free to reach out to me or download this flyer!
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HOW TO PROTECT YOUR MORTGAGE RATE WHEN CLOSING GETS DELAYED
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Are you under contract on a home with an expiring rate lock? Need a rate lock extension?
Yesterday, a buyer called me in a total panic. They locked in their mortgage interest rate 30 days ago while shopping for a home near the Westwood neighborhood. Everything moved along fine until the seller asked to push closing back by ten days to finish clearing out their garage.
The buyer asked me, “Jeremy, if our rate lock expires before we close, will our interest rate jump up? Will our monthly payment go through the roof?”
I told them straight up: “Take a deep breath! An expiring rate lock will not ruin your deal, and you will not lose your low rate!”