Spokane Washington USDA Rural Home Loan Applicants – Don’t Miss October Deadline!

There is a looming October 1 deadline for Spokane Washington USDA Rural Home Loan applicants that you do not want to miss.

The USDA Rural Home loan program offers an incredible benefit to prospective home buyers in rural areas of Washington State.

The program offers 30 year fixed rate financing with great rates, and requires no down payment. There are income limits that can’t be exceeded, but they are very liberal and many families will have no trouble staying within the guidelines.

Effective October 1, 2011 USDA is altering how it insures its loans.

Currently, borrowers finance a 3.5% Guarantee Fee into their loan. Going forward that fee is being reduced to 2% of the loan amount, but there will be an additional annual fee of .3% This will be collected on a monthly basis with your regular mortgage payment.

The numbers sound small but it’s a pretty sizable increase in the monthly payment for a USDA Rural loan borrower. A 3.5% fee is $7,000 on a $200,000 loan which equates to about $35 in monthly payment when financed into the mortgage.

The reduced 2% fee would be $4,000 on the same loan which equates to about $20 in payment. But the .3% annual fee adds a huge $50.00 to the payment for a combined total of $70.00.

If you’d rather pay the $35 instead of $70, you need to call to get pre-approved quickly.

Following are some additional recent updates:

• Borrowers who are in a Consumer Credit Counseling (CCC) program will be eligible if they have been in CCC for at least one year, and have made the last 12 months’ payments on time. In addition, you must get written permission from the counseling agency to take on the responsibility of a home loan.

• Another obstacle we are seeing more frequently is borrowers who have been recently divorced. Even if the court ordered final divorce decree assigns the responsibility of the mortgage to the spouse who will be occupying the home, the departing spouse will still have to be able to qualify with that mortgage payment along with the new home loan.Why? That’s not fair, is it!?It might not feel that way but you signed a contract with a lender and the court can’t release you from that liability. In most cases the only way to get off that loan is to have your spouse refinance the loan into their name only – if they can.

• Properties with non-farm related accessory units – like a granny flat – are now eligible for a USDA Rural Home loan. This was a major revision as many lenders rejected any loan request that was secured by a property with outbuildings because USDA had not clarified its position on what was acceptable and what wasn’t.

USDA is a fantastic loan program. If you are thinking about purchasing a home in the coming months, keep the October 1 deadline in mind. It would be a shame to miss it by a week and end up paying more than was necessary.

To get started now on a USDA pre-approved loan, just complete the online application and we’ll be glad to help.

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