Everything You Need to Know About USDA Refinancing
Refinancing your mortgage here in Morristown is a great option if you want to pay off your loan entirely right away. And since the United States Department of Agriculture now guarantees certain mortgages, this would be a perfect time for those at the low to medium salary bracket.
However, there are a couple of prerequisites that you have to meet before you can apply for a USDA contract refinancing.
USDA loan requirements
- The house that you’d like to refinance should have a mortgage on the USDA Guaranteed Home Loan Program or the USDA Direct Home Loan Program.
- The home that you’re planning to refinance should be your primary residence.
- The home mortgage should be up-to-date. You should have at least made 12 up-to-date payments before your application.
USDA loans make it more accessible for existing homeowners to pay off their loan by lowering the expenses associated with refinancing. According to the Department of Agriculture, it’s estimated that a qualified homeowner may save at least $150 a month as soon as they refinance through the streamline program.
Not for everyone
However, refinancing may not be a great option for everyone. If you’ve already paid a generous amount of interest rate in your home, then refinancing your mortgage won’t do any changes with your monthly payment.
Also, if you missed out on any payment for the past twelve months, then refinancing may no longer be an option for you. USDA loans still come with a monthly premium and an upfront fee, which usually gets added to the loan.
So it’s always a good idea to check your finances to see if refinancing your mortgage will help you with your monthly payments.
Although USDA loans are designed to help lower and middle-income homeowners with high-interest rates, it’s still important to know any financial implications of refinancing your mortgage before applying for one.