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Should we have to pay for mortgage insurance and pay these fees? We were told to pay for 1 year of insurance, taxes, pest insp, and apprasial. Is this correct?

2 Thoughts on My loan app is for USDA Rural, should I have to pay a PMI, MIP Funding Fee and buy insurance?
  1. Reply
    MSAD
    July 31, 2012 at 10:14 am

    If you have less than 20% equity, then yes, you have to pay for PMI.

    MIP is FHAs version of PMI.

  2. Reply
    Bob
    July 31, 2012 at 10:26 am

    With USDA Rural Housing loans the borrower pays a 2% guarantee fee that is added to your balance and financed with the loan much like the Up Front MIP on FHA loans. Since Oct. 2011 they also have a .3% annual fee that is paid monthly for the life of the loan. These are paid in addition to the insurance, taxes and closing fees you mentioned. It is correct.

    http://www.rurdev.usda.gov/SupportDocuments/an4551.pdf

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