USDA Home Loans have different closing costs than those charged by their “cousins” the FHA mortgage loan. Why? Because the USDA Home Loan program in NC has lower PMI fees than an FHA loan!
We’ve seen borrowers close with one of the No Money Down Home Loans with less than $250 out of pocket!
USDA Home Loans have traditionally been pretty quick to close, because there’s been less red tape. NC made a change to the way it is “shuffling” files to the underwriters – making them a little slower process… so I would count on 45 days.
The USDA Home Loan gives you a unique opportunity that you cannot get with any other type of loans out there. No Money Down Home Loan with relatively low closing costs. Because of this we believe the USDA Home Loan gives you the cash to close advantage!
I read years ago that the average amount of cash needed to close a USDA Loan was in the range of about $175. If you were to compare that to FHA or Conventional financing, that is a difference of several thousand dollars; maybe even tens of thousands of dollars at closing.
And it is not just because Mortgage Closing Costs and escrow accounts are lower for the USDA Loan.
It’s because there are things that can happen to make it get even better, and most of the time you can get your Earnest Money Deposit refunded back to you at closing.
The USDA Loan requires us to base our loan amount on 103.5% of the appraised value, not the sales price. Several years ago, it was common to find the appraised value higher than the actual sales price – these days that rarely happens. When that does happen, we can roll in closing costs – these days, however, it is MORE COMMON to find a Seller paying for closing costs. As part of the negotiation process, we’ll be glad to help you structure what you want to ask the Seller to pay.
Either way – if we estimate high, and you end up with additional credits on the closing statement – you can have the additional funds go to pay for your prepaid items.
This would include prepaid expenses like:
> Earnest Money Deposit (usually a thousand dollars or so)
> Appraisal Expense
> Inspections you may have paid for
You may know people who have bought houses recently with a great FHA or Conventional loan in North Carolina. And they may have gotten a great deal, but they still had to go to closing with a big fat check (A couple thousand dollars maybe?).
Just know that with our USDA Loan program you wont be stuck like that. You won’t need to worry about your Down Payment (since it’s a no money down home loan) and we’ll be sure that your USDA Loan Closing Costs are minimal. Don’t worry about needing to bring a big pile of cash to close. You could possibly get a check back! Having extra cash when you move into a new home can be a life saver!
If you are considering a no money down home loan, or you need more information about the USDA loan closing costs, call Steve Thorne 919 649 5058 – we do dozens of these mortgage loans each month in NC! USDA Loan Frequently Asked Questions