Homeowner interested in the USDA refinance program will find the list of USDA Refinance FAQ’s helpful: Please reach out to us if you have any questions about the USDA refinance.
Question: I originally closed on my home back in 2006 – at the time my income was below the USDA limit. However, I received a promotion since then and my income is now over the USDA limits. Will I still be approved? G. Thomas – Santa Fe, New Mexico. Answer: Unfortunately your household income must be below the current USDA limits today to be eligible.
Question: When I purchased my home it was located in a USDA approved area – just outside of St. Louis. However, the USDA maps changed in October and my home is no longer in an eligible location. What are my options? J. Kearns – St. Louis, MO Answer: No worries, your home is approved regardless of the current or future approved rural area map revisions.
Question: I have a 6% interest rate on my current USDA loan now, how much lower will the rate decrease if I refinance? V. Irons – Fort Wayne, Indiana. Answer: That depends on many factors, such as the current mortgage market rates, credit score, and lock terms. Please check with us for an accurate rate quote based on your situation.
Question: I understand that USDA loans now require monthly mortgage insurance to be included in the payment each month. I don’t have this on my current loan I obtained in 2004, will I be required to pay this if I refinance? D. Conley – Monroe, North Carolina. Answer: Yes, all new USDA loans require an annual fee (monthly “PMI”) of .35% of the loan amount, in addition to the 1.0% guaranteed fee that is rolled into your new loan. For example, let’s assume your loan balance is $175,000. The amount of monthly PMI added to your payment would be $51.04 per month. Your current interest and loan balance will determine if refinancing makes sense or not. Most homeowners generally see an interest rate reduction low enough to offset the new mortgage insurance costs. Your USDA loan advisor will review the costs and savings with you to determine if you meet the tangible benefit policies.
Question: I would like to refinance, but I don’t have the cash needed for the closing costs. D. Cook – Wichita, Kansas. Answer: Most of the USDA refinance programs allow all closing costs to be included in the new loan balance. No out of pocket cash is needed from the homeowners in most cases.
Question: What is the paperwork I need to apply for the USDA Streamline Assist Refinance? F. Donaldson – Montgomery, Alabama. Answer: Very little paperwork is needed from the homeowner. Income documents (pay stubs, W2) will be needed to ensure your income is below the 2024 USDA income limits. A copy of your ID, most recent mortgage statement, home insurance statement and survey if you have it. The USDA refinance programs are very streamlined and do not require a lot of paperwork when compared to a standard USDA purchase loan.
Question: I would like to add a new patio deck to my house. I see the program allows for 101% financing, can I borrow some extra money to complete this job? N. Martin – Baton Rouge, Louisiana. Answer: No, the program does not permit any cash out for home improvements. Only closing costs can be included in the new loan. The added 1% is for the USDA guaranteed fee that is added to the loan amount.
Question: My interest rate is high on my FHA loan, I would like to refinance into the USDA program if possible. N. Gomez – Birmingham, Alabama. Answer: Unfortunately you must currently have a USDA mortgage to be eligible for any of the special refinance programs. Please check into the FHA streamline refi here.
Question: If I refinance, when will my first mortgage payment be due? J. McCall – Little Rock, AR. Answer: You will always skip the following month. Example: let’s say you close on your new USDA refinance on January 7th – your first payment will not be due until March 1st.
Question: I received my USDA 502 loan about 6 years ago from Bank Of America, can you assist me with refinancing? G. Lawton – Greenville, South Carolina. Answer: Sure can, regardless of your original lender or current loan servicer, we can assist you. We find many large banks will originate new USDA purchase loans, but will not process USDA refinance request. We process many requests from homeowners who obtained their original USDA loan through other banks and lenders like Chase, Citi, SunTrust, US Bank, BOA, etc.
Please contact us by filling out the Quick Contact form on this page.