USDA loans are one of the best options for those looking to buy a home. When comparing a USDA loan to an FHA loan the savings can be substantial. Using a $200k loan amount and assuming both have the same interest rate a USDA loan will be roughly $70/mo less than the FHA loan for the PMI payment (and better yet – USDA offers 100% financing whereas FHA requires 3.5% down). Also the monthly Mortgage Insurance Payment on a USDA reduces each year as the loan balance decreases (the FHA Mortgage Insurance does not).
A few more key features of USDA loans.
100% financing. You are able to borrower the higher of the purchase price or the appraisal. This could help roll in more closing costs allowing a buyer to limit the out of pocket costs.
Flexibility with debt ratios. USDA loans allow for borrower to have a back end debt ratios up to 47%. Meaning a potential buyer could qualify for more house.
Fico scores 620 and above.
These are just a few of the benefits of the USDA loan program. If you have any questions do not hesitate to reach out to me.
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Craig Thibeau
Senior Loan Officer
North East Financial
Ph 860-334-1354
NMLS 398576 Company NMLS 117273
craig@northeast-mortgage.com
www.northeast-mortgage.com
