Effective today, October 1st, the USDA has announced the changes to their up front Funding Fee. The amount of up front insurance premium they require to be financed in with the mortgages was reduced from 3.5% to 2% of the purchase price. In addition, they will impose a .3% annual fee which will be added to the borrowers monthly payment on a monthly basis. As an example, if someown is buying a home for $100,000, they will be financing
$ 2,000 and incurring a monthly expense of $ 25. These changes are more attractive for the borrower making this type of financing an effective way to sell real estate. They will still finance 100% of the sale price, allowing the borrowers to finance the closing costs to a maximum of 6% of the selling price. The seller can pay the closing costs if the house doesn't appraise high enough to allow the buyers to finance them. This is another positive sign of the economic recovery in the mortgage industry.
Andy Williams
President
Abacus Regional Mortgage
484 695 5972
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