Change, the one constant in life. Especially in the world of mortgages! I remember when we had “mirror-test” underwriting. Hold a mirror up to the borrower’s nose & if it fogs up, they get a loan! Well, those days are gone, as they should be. But unfortunately, certain regulators feel the way to correct things of the past are to make it more expensive. Makes sense, right? (sarcasm)
The USDA mortgage program IS the best thing since sliced bread. This program allows you to buy a home in certain “rural” areas of Montgomery and Bucks counties with No money down! Currently, there is an upfront mortgage insurance that is 2% of the sale price, which is financed on top of the loan allowing for 102% financing. Plus the seller, or another interested party to the transaction (ahem, lender), can credit the borrower up to 6% to cover all closing costs! Right now, there is a monthy mortgage insurance rate of just .3% of the remaining mortgage balance. Super cheap compared to FHA, which is 1.5% monthly. In laymen’s terms, a boatload more!
However, the USDA program is becoming more and more popular which is causing more and more cost to process, underwrite and service these loans. Therefore, as of October 1st, 2012, they are increasing the monthly mortgage insurance to .4%. Not a big deal in the grand scheme of things, but why pay more if you do not have to? Watch the video below for the details…
The good news is that the USDA eligible area for Montgomery, Bucks, Chester, and Berks counties will not change….this time. So if you are looking for a home in those areas, be sure to check out this incredible mortgage program. Then take a look at some of the houses that you can buy below. To see ALL of the zero down homes available on a map, click here. As always, give me a call with any questions.
[idx-listings linkid=”264763″ count=”25″ showlargerphotos=”true”]