Can I convert a USDA Loan to a Conventional Loan?

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I’m interested in purchasing a home and like the USDA loan option (0% down, low MI). What concerns me is two things:

1. The interest rate is about 0.5% higher than FHA or Conventional loans,
2. The Mortgage Insurance (MI) never goes away unlike the FHA loan.

So, after a while of owning, would I be able to convert my USDA loan to a conventional loan and get rid of the MI?

Please provide some credibility or resources that will be helpful in confirming the answer.

3 comments to Can I convert a USDA Loan to a Conventional Loan?

  • the kid  says:

    Yes, by refinancing.

  • David Z  says:

    you would have to refinance later. which means a new loan and the old loan gets paid off. if a 30 year mortgage, it will easily be 10 years before you get refi. 30 year mortgage pay very little principal first 10 years.

  • real estate guy  says:

    convert no. Refinance, yes. provided that you have equity in the house. This will happen if the home increases in value and by paying the principle down. However, if you don’t make extra principle payments each month, it would years before you have enough equity to refinance.

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