USDA Loan Refinancing
If you’ve received a United States Department of Agriculture (USDA) loan in the past, you know how beneficial this program to be to low income home buyers. By providing 100% financing, construction loans, and not requiring private mortgage insurance, the USDA is able to open the housing market up to buyers who would not otherwise qualify. Rather than requiring buyers to make at least a certain dollar figure, the USDA actually has income caps—buyers must make no more than 80% of the area’s minimum income.
Get Started With Your USDA Loan Request
If you’ve received a USDA mortgage and feel that your rate is higher than the current rate, refinancing your loan is an option. There are a few requirements, however, to meet before you begin the refinancing process.
- The mortgage to be refinanced must already be a USDA Loan (Guaranteed or Direct).
- The mortgage to be refinanced should be current (not delinquent).
- The refinance is to result in a lowering of the borrower's monthly principal and interest payments.
- No cash may be taken out on mortgages refinanced using the USDA loan refinance process.
Up to 102% Financing
If you are refinancing your mortgage in order to improve your home, keep in mind that USDA program requirements do allow for financing up to 102% of the appraised value of the home. That means that you’re able to borrow more than the house is worth for improvements, and the improvements can be completed after your new loan closes. This program can be hugely helpful to those who are attempting to sell their home but still need to make repairs or improvements in order to market it to its fullest potential, for example, or if you simply need to make some changes around the house.
The USDA mortgage refinance is generally a streamlined process. Since you have already qualified for a USDA loan and already have a current loan, some documentation and information would be redundant. The streamlined process will shorten the time necessary to close on your loan and will require you to provide less paperwork and fill out fewer forms. USDA loans also require no property inspection, which will save you, on average, $400-$500. Speaking of money, closing costs can be rolled into the loan, which means that you can refinance your loan without having cash up front.