It’s a necessity in the industry to protect the lenders. In fact, that’s what allows lenders to offer such low down payment requirements. But here’s the deal – you, the borrower, still need to pay for it. And many, many borrowers might not even realize that mortgage insurance will come out of your pocket. Plain and simple.
Thankfully, certain home mortgage programs offer competitive prices for mortgage insurance, and FHA is one of them – 1.75% of the loan amount is what you can expect to pay for insurance on a mortgage loan. Not too bad. That’s somewhat better than the VA home loan – another favorable program for low-income situations – with a mortgage insurance percentage of about 2.4%. But did you know there’s one home mortgage program out there that beats even the FHA?
You Guessed It: the USDA Home Mortgage
That’s grade A premium beef in the real estate industry, with a percentage of just 2% of the initial loan amount – and to make it even more interesting, the annual mortgage insurance charge is just .5% of the remaining balance over the course of 12 following payments. A much better deal than the .85% annual charge the FHA imposes.
Want to learn more about the USDA home mortgage? Check it out right here. Nothing against FHA, but maybe you want something a bit better. Just make sure you qualify for it! Because when we talk about grade A premium beef cuts, we don’t mean small shanks.
One check of these reviews and the ever-growing social fan base on pages like Facebook and Google+, and you begin to wonder: maybe this H.O.P.E. Program knows what they’re talking about! However, we can understand the skepticism: the real estate market’s cutthroat, what with the growing mortgage trends and the insane home prices skyrocketing like Elon Musk and the SpaceX Program. Perhaps we can get this real estate rocket to land on the barge like they’re planning to do, but make no mistake — H.O.P.E. to Own’s not far from that. Here’s why:
The Fact Is the HOPE Program Doesn’t Have to Claim Anything: the Mortgage Industry Has the Answer:
It’s called the USDA home mortgage. A plan many don’t know about, but many should. To get a home zero down may just be as easy as applying for a USDA home mortgage precisely because this is one of two particular plans where you don’t have to make a down payment — and with down payment averages rising in areas around the nation, that’s great news.
The only other plan out there that allows borrowers to get a home zero down is the VA. Not even the FHA program allows it — typically a 3.5% down payment is customary, and that’s pretty low compared to some of the averages we see. You can imagine that as you discuss your plans with your rent-to-own consultant about the time coming for you to buy the property you’re living in, if you want to save on that down payment, chances are you might want to go with a USDA.