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Questions about USDA financing. Is mortgage insurance required?

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ryan06
Established Member

Questions about USDA financing. Is mortgage insurance required?

I am working on getting a USDA loan.  We already have a contract on a home and I met with the loan officer this evening to sign all the papers for the application.  Two things that I felt a little uncomfortable about was he had me fill out a form that asked for a debit/credit card number to give the mortgage company permission to charge my account for the appraisal and I thought that the appraisal would be included in the closing cost but he said it was not.  The second thing was he told me that USDA now requires mortgage insurance in addition to the 2% charge that I already knew about, but I thought there was no mortgage insurance required with a USDA loan.  Are both of these things normal?

EQ 705 (FICO) TU 720 (FICO) EX 719
Message 1 of 4
3 REPLIES 3
MzKoli
Contributor

Re: Questions about USDA financing. Is mortgage insurance required?

It is normal to pay for appraisal out of pocket during the process. USDA does require mortgage ins.
Message 2 of 4
glendazamot
Regular Contributor

Re: Questions about USDA financing. Is mortgage insurance required?

Yes this is normal.  I am going the USDA route as well and I did have to write a check for the appraisal however my broker said if we are able to close the loan they won't cash (yay!).  About the MI, at first I thorugh USDA did not have it so when I saw that in the docs I researched it and found out that yes USDA is now having a MI.  Hope that helps.

Message 3 of 4
ryan06
Established Member

Re: Questions about USDA financing. Is mortgage insurance required?

Thanks for the help guys.  I guess it makes sense that they would want me to pay the appraisal since if we dont close they would be out the cost of it.  But on the m.i I kind of thought I had read the 2% fee that is required with u.s.d.a was done instead of the m.i.

EQ 705 (FICO) TU 720 (FICO) EX 719
Message 4 of 4
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