What is the difference between a USDA home loan and an FHA loan? Any benefits to either one. No PMI, fees, etc.
I think an FHA requires a higher credit score and some percentage of a down payment while USDA accepts lower credit scores as long as you meet an income bracket and the home/property qualifies as a rural area.
You looking at getting a house or trailer? Trailers either got to be new or already financed through a USDA loan from my understandin'. Oh, and you gotta be over the area's median household income level to qualify.
USDA has a heafty fee. I saw a recent USDA loan where the USDA and origination fees alone were about $6500. Just found the following link. Apparently the USDA funding fee is 3.5% of the purchase price. http://www.ehow.com/how_5824388_calculate-usda-mortgage-funding-fee.html Then there is the loan origination fee. I'm not sure if FHA has those fees, too.
yea, the usda fee for my ds was 5,100. for a house he is looking at. I was floored by the fee. But didn't see a PMI included in a no down payment calculation for the house they liked. so was curious if the fee was because of no pmi or should he just go fha with pmi and no steep fee. either way seems like you either pay now or later!
I heard some time back of a requirement to put 20% down for some loan. Have you run across that? Just curious.
FHA loans are done typically with little to zero down ...but are at a higher interest rate assuming you have a good credit score.
The buyers should ask their potentional lender/lenders for good faith estimates so you can compare apples to apples. USDA has very strict funding guidelines including income restrictions, purchase location restrictions, etc. The benefit is no PMI and no down payment. In my experience, the interest rate was going to be about 1/2% more than FHA. Also, the funding fee which has been mentioned. Another thing to consider is future refinance options. FHA loan would be more flexible to refinance int he future. Check with BB&T. We just bought a new house last year and they were offering a program with $500 down, same low rate as FHA/USDS and no PMI!
USDA have big steaks in the whole process. SOmetimes we have to meat the USDA half way to consider if you are right for the mortgage. No nead to make a misteak.
