USDA Loan's Mortgage Insurance - 68% Less Than a Comparable FHA Loan

Date: April 1, 2013

Effective April 1, 2013 USDA Loans will continue to offer an ever greater competitive advantage over a comparable FHA Loan. On April 1 the monthly mortgage insurance premium will increase based on an annual factorial from 125 basis points to 135 basis points. This compares to the USDA Rural Loan program which charges an Annual Fee of 40 basis points. This variance in mortgage insurance premium translates into a monthly mortgage insurance payment savings of 68%.

Further starting June 3, 2013 the monthly mortgage insurance premium charged on a FHA Loan will not go away regardless of the equity position of the loan amount in relationship to the property value. This mirrors the USDA Loan program in which the Annual Fee will last for the life of the loan.

To determine your monthly savings using the USDA Loan versus a comparable FHA Loan use the USDA vs. FHA calculator by clicking here.

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