USDA purchase loan no insurance

USDA rural development loans REQUIRE mortgage insurance, regardless of the down payment size. The current amount of PMI on a USDA is very cheap at .40% compared to other loans. FHA is 1.45%. USDA mortgage insurance is going to .50% on Oct 1, 2015. Still a great deal... In MN, WI, and SD, visit www.JoeMetzler.com/usda

That amount of a down payment would not be enough to give you any mortgage insurance waivers for the monthly amount or open up a conventional option that would work better for you. In relation to FHA, though, you likely aren't getting a better Note Rate, but rather a lower APR because the monthly mortgage insurance amount is considerably less. It sounds like the USDA is a good option for you if you've already located a house you are buying in an eligible area...this is a good loan program that will serve you well. Be prepared for a long escrow period, though, as the local USDA department that issues commitments is out several days. By my last account of it, you're going to be a minimum of 20 business days for just the USDA part of it...so expect a 45-60 day escrow period within your contract.

The monthly mortgage insurance for USDA is about 30% of what FHA charges. Neither of them are going to waive this with any amount of down payment. USDA is the best loan available if you don't have a significant down payment without a doubt. You have to be within the income guidelines and in the correct area to qualify for USDA of course. Feel free to email or call me here in my SL office to answer any further questions and help get you qualified.