Welcome back to Daily Mortgage Rates LIVE! In today’s episode, we're exploring USDA loans—a fantastic financing option for those looking to buy a home in rural or suburban areas. If you’ve ever wondered how to make homeownership more accessible in less populated regions, this episode is for you!
We’ll break down what USDA loans are, how they work, and why they’re an excellent choice for eligible buyers. From zero down payment options to competitive interest rates and flexible credit requirements, we’ll cover all the benefits that make USDA loans stand out.
Our experts will also discuss eligibility criteria, the application process, and recent updates that could affect you. Whether you’re dreaming of a quiet countryside retreat or a suburban home with space to grow, this episode will give you the insights you need to take advantage of USDA financing.
Join us on Daily Mortgage Rates LIVE! and discover how USDA loans can pave the way to your ideal home in a rural or suburban setting.
For more episodes visit: https://themortgagecalculator.com/Page/Daily-Mortgage-Rates-LIVE-Video-Podcast
About The Mortgage Calculator:
The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as over 5,000 Non-QM mortgage loan programs using alternative income documentation!
Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!
Our team of over 350 licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and US
The Mortgage Calculator is a licensed Mortgage Lender (NMLS #2377459) that specializes in using technology to enable borrowers to access Conventional, FHA, VA, and USDA Programs, as well as thousands of Non-QM mortgage loan program variations using alternative income documentation!
Using The Mortgage Calculator proprietary technology, borrowers can instantly price and quote thousands of mortgage loan programs in just a few clicks. The Mortgage Calculator technology also enables borrowers to instantly complete a full loan application and upload documents to our AI powered software to get qualified in just minutes!
Our team of licensed Mortgage Loan Originators can assist our customers with Conventional, FHA, VA and USDA mortgages as well as access thousands of mortgage programs using Alternative Income Documentation such as Bank Statement Mortgages
Episode Transcript
All right.
(00:00):
So welcome everyone.
My name is Kyle Hiersche.
I'm the COO of the MortgageCalculator joined here by our
President Nick Hiersche and ourCSO Jose Gonzalez.
We are a lender that specializesin non QM loans.
And what we do every weekday at11 a.
m.
Eastern on this show is gothrough our actual live mortgage
rates.
Then we do a deep dive into adifferent loan type.
Today's loan type is going to beUSDA loans.
So we'll go through that hereshortly, but first.
(00:21):
We'll do what we do everymorning, which is pull up the
live rates.
So Nick, if you're ready,interesting day today to see
what the rates are looking like,let's pull them up and check
them out.
Right.
So yes, more good news.
Obviously rates are at a Lowe'sfor the last year and a half
now, about most of the rateswere already priced in there for
(00:42):
the changes, but the fed changeswere announced yesterday, which
is definitely a good sign.
So the rates are roughly thesame as they were yesterday.
They were already reduced.
But we'll check out the ratesfor this morning.
It is September 19th, just after11 a.
m.
Eastern.
So all the standard programshave their initial rate sheets
live.
We'll set up a standardscenario, prepare the APR.
(01:03):
If you'd like a full breakdownand itemized loan estimate that
breaks down all the fees that goto the APR, please get with our
team members.
They'd be happy to send thatover for the demo.
We always set a single familyhome, 500, 000 purchase, 400,
000 loan amount that correspondsto 80 percent loan, 20 percent
down payment.
And we set everything to aestimated seven 60.
FICO credit score and anestimated 40 percent to income
(01:23):
ratio.
So let's check out the liverates today.
So again, not much change since,uh, yesterday, even though it
was a lot of big news.
Uh, but, uh, it's already beenat one and a half year lows
here.
First up, our 30 year fixedconventional primary rates as
low as 5.
625 LAPR 5.
(01:45):
915 here.
And if for any reason ourcustomer doesn't qualify for a
conventional option, typicallywant to send the next option as
an FHA quote, FHA allows moreleniency on credit issues and a
higher overall debt to incomeratio, but does require upfront
and yearly mortgage insurance.
Rates as low as 4.875 for FHAtoday final, a PR 5.794 with the
(02:07):
mortgage insurance, all thefees.
So if our customer qualifies forboth, they may consider FHA,
could be a touch cheaper, butdoes require that mortgage
insurance, our customers thatneed to use it.
Definitely a great option.
And our VA is only for oureligible vets and active service
members.
If you are eligible, theseprograms are amazing.
Rates of those 4.
99.
Finally, if you have thestandard funding fee here, 5.
(02:28):
275.
And notice the APR is going tobe lower than FHA or
conventional.
So definitely the best optionfor our eligible vets and
service members.
And USDA is our topic for today,but we'll pull up the standard
option as we do every day.
USDA is only for properties inUSDA eligible areas, the rural
areas of the country.
(02:49):
If the property is eligible andour borrower is eligible, this
program is good to look at.
4.
875 today.
Finally, if you are with all thefees, 5.
598.
So it's a touch cheaper thanFHA, uh, in this example, for
our customers looking in, uh,one of those areas and that's
cheaper than conventional.
So great option for customerslooking in those special areas
and Jose will go into all thedetails today.
(03:11):
Now that rounds out the standardoptions that every bank or
lender has, but if our customerdoesn't qualify, many banks and
lenders have to deny them, butwe have 5, 000 additional
options here, starting with a 30year fixed non QM alt doc
option.
So if our customer doesn'tqualify for a conventional using
their tax returns, needs toswitch to alternative docs for
some reason, we switch to ournon QM alt doc option.
(03:33):
We can use bank statements,1099s, P& Ls, asset related, all
kinds of options.
Bank statement option coming intoday at 6.
00 final APR 6.
309.
So as usual, we're within a halfa point of conventional
switching to all docs, which isamazing.
And we have our investmentproperty options, tons of
(03:54):
options here.
First up our non QM all docs.
So bank statement or similarcoming in today, 6.
375 final APR 6.
694.
And hopefully we see all thesenon QM options start to drop
after the big news yesterday.
And we do not have anygovernment options for
investments, so no FHA, VA, orUSDA, but we do have
(04:17):
conventional 6.
125 today, final APR 6.
452, which is cheaper than ourall talk option for a
conventional, which is awesome.
And for the first time in quitea while, also cheaper than our
DSCR option.
DSCR is our favorite optionshere, stands for debt service
coverage ratio, no income neededfrom the borrower, no employment
needed from the borrower, simplyuse the estimated rates from the
(04:38):
appraisal.
Let's determine a DSCR ratio.
The estimated rents can coverthe estimated expenses.
That's a ratio over one, aka theproperty cash flows monthly.
This option here has a threeyear prepayment penalty coming
in today, 6.
25, final APR 6.
529, just a touch aboveconventional.
I'd still say a hundred percentof investors typically prefer
(04:58):
DSCR even when the cost issubstantially more.
And we can sweeten the deal andbeat conventional still with our
five year prepay, amazing ratesas well as 5.
875 when we add a five yearprepay.
Final APR, 6.
193, smoking conventional there.
And we do have a no prepaymentpenalty option coming in today,
(05:18):
6.
375 rate, final APR, 6.
694.
So just a touch aboveconventional to go with no
prepay, which is a great optionfor the states that don't allow
it and investors that don't wantit.
And if our investor is willingto add the prepayment penalty,
we can lower the rate even more.
So great options there.
And moving on to our 30 yearfixed second mortgages.
(05:41):
These are non QM options thatare alternatives to HELOCs.
Typically a customer that has alow rate first mortgage, lower
than the rates we're looking attoday, typically would look to a
second mortgage or HELOC to getcash out if they still would
like to access their equity.
So this allows a customer to notuse a HELOC and get a 30 year
fixed for a lower rate.
For a primary home coming intoday, 8.
(06:02):
125.
Finally, here are 8.
542, which would be much lowerrate than a HELOC, so great
option.
And our investors can use thesame program.
HELOCs are very rare forinvestments, so this is a great
option.
30 or 50 second mortgage forinvestment property, get cash
out, rates as low as 9.
5.
Finally, here are 9.
739.
So those are the basic optionswe go over every day.
(06:26):
Let's get into our topic fortoday, USDA loans.
Just like yesterday, our generalspecialty types of loan or
government types of loans,there's all kinds of different
special options.
When we do our general demo, wewant to compare everything
apples to apples.
So we do a standard 20 percentdown, which is not your typical.
So Jose will be able to explainall the different tips and
(06:47):
tricks that we can do for USDAloans.
Since we're going to be goinginto a deep dive here.
So Jose, let's check out theoptions.
We don't get to see every dayhere.
Good morning, everybody.
Thank you for joining us fordaily mortgage rates live with
the mortgage calculator.
USDA loans are the option forproperties located in rural
areas.
(07:08):
The purpose of USDA loans isreally to help our agricultural
workers, right?
Those that live in agriculturalareas, those that put food on
our table, 100 percent LTV.
reduced MI and reduced creditscore requirements.
So let's go ahead and get intoour options today.
(07:31):
First option here is for yourstandard USDA 100 percent LTV
purchase.
And our lowest cost option is 5.
625 with a lender credit of 0.
125.
And you can buy that down allthe way to 5 percent at a cost
of 2.
5 points.
(07:52):
Next option here is for our lowcredit score borrowers.
500 credit score is the minimumcredit score option and you're
looking at 7.
25 with a lender credit of 0.
25 and you can buy that down to6.
25 at a cost of 1.
375 points.
And now for some outside the boxsolutions here, our renovation
(08:15):
loan at a hundred percent LTVfor USDA.
This is the one that allows youto either buy that property with
condition related items thatnormally would not be able to
close with traditional USDAfinancing, or just convert the
home into your dream home.
Cause this does allow you tofinance the renovation funds
(08:36):
along with the purchase funds.
All in one loan and 6.125 is ourlowest cost option, and you can
buy that down all the way to5.125 at a cost of 2.5 points.
Now, if you really want to havethat dream home, haven't been
able to find it, this is the wayuh, you can, uh, resolve that
(08:59):
with A-U-S-D-A one time closepurchase.
This actually allows you topurchase the land.
And build your dream home allwith one loan.
No need to have a separateconstruction loan and then
refinance into your end loan.
You can do that all in one shot.
Uh, and for those of you outthere, uh, looking at
(09:20):
manufactured homes, you canactually do a manufactured home
one time closed loan, whichactually lets you purchase The
manufactured home purchased theland, and then, uh, obviously
the installation of themanufactured home on site would
be the quote unquoteconstruction phase of the
transaction.
(09:41):
And 6.75 is your lowest costoption at par, and you can buy
that down all the way to 5.125at a cost of 2.5 points.
Uh, USDA, uh, does not allowcash out refinances, right?
Its main purpose is to helppeople buy homes or in this case
(10:05):
of a rate and term refinancestay in their home if they need
to refinance into a lower rateto make the home payment more
affordable.
Our lowest cost 5.
625 actually with a little bitof a lender credit and you can
buy that down all the way to 5%.
at a cost of 2.
5 points.
(10:25):
And our last option here is theUSDA Streamline Refinance.
This is the option that allowsyou to close on the loan without
an appraisal, without any incomedocumentation, but it is a USDA
to USDA transaction similar tothe FHA Streamline Refinance.
(10:48):
5.
625 is your lowest cost optionat a cost, uh, with a lending
credit.
of 0.
125 and you can buy that downall the way to 5 percent at a
cost of 2.
5 points.
Amazing USDA options here at theMortgage Calculator.
So definitely look to MortgageCalculator for all your USDA
(11:08):
loans and every other loan.
All right.
Thank you, Jose.
I do not see any questions.
So I think we can go ahead andwrap it up.
Remember that we do this at 11a.
m.
Eastern every weekday where wego through our live rates and
then we do a deep dive into adifferent loan type.
So we'll be back tomorrow with anew loan type.
(11:28):
We appreciate everybody tuningin.
We'll see you tomorrow 11 a.
m.
Eastern for the next episode ofDaily Race Live with the
Mortgage Calculator.
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