Homebuyers in Missouri have a great option to them when it comes to financing. The Missouri USDA Mortgage is a great loan product. If a buyer is not a veteran it is the only true 100% no money down loan product. They can buy a home without having to have a down payment. While this is a very attractive feature the USDA Loan has many other benefits.
The USDA Mortgage has its own form of mortgage insurance which is called a guarantee fee. The guarantee fee is used to help fund the program. Without these fees the program would not exist. There are two types. An upfront and an annual feel. The upfront is a little misleading because the term leads people to believe they have to bring the money on the front end of the transaction or upfront. This fee is actually added to the loan and paid out over 30 years. The current upfront fee is 2.75%. An example on a $200,000 loan would be $5,500. The $200,000 loan amount would be $205,500. In the long run it has a minimal impact on the monthly payment. The annual fee is actually paid out monthly. The current percentage for the annual fee is .50%. On the above $200,000 loan the monthly payment for the annual fee is approximately $86. This has a larger impact on the total monthly payment. Compared to other loan types than have mortgage insurance the USDA Loan has a much lower amount of MI.
The Missouri Rural Home Loan also has a great closing cost feature. Home sellers are allowed to pay up to 6% of the sales price towards the buyers closing costs. In most cases this is more than enough to cover a closing costs and pre-paids. On a $200,000 this is $12,000. This allows the buyer literally get into a home with no out of pocket costs.
The USDA Loan also have very flexible credit standards. Lenders such as PRMI will go as low as 620 credit scores. Borrowers are allowed to use alternative credit if they cannot meet the required trade lines. Alternative credit is things such as utility bills and cell phone bills. Additionally borrowers only need to be 2 years removed from bankruptcy and 3 years from foreclosure.
Homebuyers in Missouri can really benefit from the USDA Home Loan. With its no money feature and flexible credit standards it is a very popular loan product. Add in the low mortgage insurance and it a must for many home buyers
Primary Residential Mortgage, Inc.
Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.