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Old 06-11-2015, 08:23 PM
 
9 posts, read 8,723 times
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Based on my income, around $65,000, it looks like I qualify for a USDA Guaranteed Loan Program. My FICO score is low, 660, but it's barely above the requirement (640?). It says it's a no down payment loan, but how much should I have in the bank to qualify assuming I would purchase a $170,000 home? I'm sure if I had $20 in the bank, I wouldn't qualify. The 2% upfront mortgage insurance can be included in the loan and sometimes closing cost can be included in the loan if the home is appraised greater than the loan amount or you can have the seller pay the closing cost. I actually only have around $4000 in the bank. Based on that information, should I even attempt to apply for this loan?
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Old 06-11-2015, 08:59 PM
 
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First you need to check to make sure you don't make too much money. The website will tell you what the income limit is for the county you are planning to buy in (it varies widely even within the same state). As far as how much you have in the bank, that is actually good news. If you have 20% of the purchase price in the bank you aren't allowed to use the no money down option, so you are fine there. Make sure the properties you're looking at qualify (they change the map pretty frequently), and go from there. You need to speak with a bank that does USDA loans and give them all of your details. They should take care of most of the paperwork and let you know how realistic it is. Because your credit score is so low you won't be able to have the application fast-tracked, so make sure you document everything because most likely they'll be going through it manually. Good luck!
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Old 06-11-2015, 09:28 PM
 
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Thanks for the information. I checked the county I'm looking in and I qualify for the Guaranteed loan but not the Direct loan. Now I'm a little more confident walking into a bank. I didn't want to waste a loan officers time or get laughed out of the bank.
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Old 06-12-2015, 05:23 AM
 
10,265 posts, read 6,495,798 times
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Quote:
Originally Posted by chrisnur View Post
Based on my income, around $65,000, it looks like I qualify for a USDA Guaranteed Loan Program. My FICO score is low, 660, but it's barely above the requirement (640?). It says it's a no down payment loan, but how much should I have in the bank to qualify assuming I would purchase a $170,000 home? I'm sure if I had $20 in the bank, I wouldn't qualify. The 2% upfront mortgage insurance can be included in the loan and sometimes closing cost can be included in the loan if the home is appraised greater than the loan amount or you can have the seller pay the closing cost. I actually only have around $4000 in the bank. Based on that information, should I even attempt to apply for this loan?
You don't have $20 in the bank?
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Old 06-12-2015, 03:19 PM
 
3,317 posts, read 7,253,255 times
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Quote:
Originally Posted by chrisnur View Post
Based on my income, around $65,000, it looks like I qualify for a USDA Guaranteed Loan Program. My FICO score is low, 660, but it's barely above the requirement (640?). It says it's a no down payment loan, but how much should I have in the bank to qualify assuming I would purchase a $170,000 home? I'm sure if I had $20 in the bank, I wouldn't qualify. The 2% upfront mortgage insurance can be included in the loan and sometimes closing cost can be included in the loan if the home is appraised greater than the loan amount or you can have the seller pay the closing cost. I actually only have around $4000 in the bank. Based on that information, should I even attempt to apply for this loan?
You will typically pay up front for an inspection (optional but recommended), and the appraisal. Although a seller contribution can cover these, and all other closing costs, taxes and insurance, you pay those two fees out of pocket, and then, IF there is sufficient Seller Concession, you are reimbursed, post-closing.

The big factor is where you are buying, and how much the property taxes are, and when taxes are due. You could be paying 12 months of taxes at closing, or only 2 depending on location.

Your score is fine. Remember, USDA requires income docs for ALL occupants of the house, regardless of whether they are on the loan.
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Old 06-14-2015, 12:27 PM
 
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Originally Posted by chrisnur View Post
Thanks for the information. I checked the county I'm looking in and I qualify for the Guaranteed loan but not the Direct loan. Now I'm a little more confident walking into a bank. I didn't want to waste a loan officers time or get laughed out of the bank.
I do a lot of RD loans and think it's one of the best programs available to moderate income borrowers. Please don't ever feel like you are wasting a loan officers time or would get laughed out of a bank for your circumstances. It IS the loan officer's job to help their clients explore their options and if you are working with a professional with a heart, he or she not laugh you out of the bank because you're not eligible. Instead, he or she will offer suggestions and even help you develop a plan to get you to a point that you may become eligible.

Before writing that sales contract, make sure your loan officer is aware of RD's turn times so you can be realistic with a closing date. In my area, 30 day closing are the norm, but I let all my clients know they will need 6 weeks for an RD loan because once the file is underwritten and approved by my underwriter, the file is sent to RD for their review and guarantee.

Good luck to you!
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