Episode 60, Segment 1: USDA Loans Are Getting Cheaper!
Good news, everyone: The USDA announced that their loans are getting much cheaper for the consumer, effective October 2016! John Schutze and Mark Hairston of Supreme Lending sat down to discuss what changes consumers can expect this year:
If you're not sure what a USDA loan is, it's basically a very popular, zero-down loan program with competitive interest rates and monthly mortgage insurance, or PMI, that's actually cheaper than an FHA loan. In John's words: "The USDA loan is the best of both worlds!"
Now for the big changes coming: Currently, compared to a conventional loan, a USDA loan has an upfront fee of 2.75%, which is rolled into the loan so consumers don't pay it out of pocket at closing. For example: On a $200,000 loan, the 2.75% upfront fee adds an extra $5,500 to the loan amount. But starting this October, the USDA is changing the upfront fee to just 1%! That's right - it's going down from 2.75% to just 1%. In addition to that change, they're also making the monthly mortgage insurance will also be going down from .5% to .35%!
"It's a big win for the consumer!"
If you're interested in learning more about a USDA loan or if you have questions about the new changes coming up, give John a call at (512) 524-8310 or email him here for more information.