Buying a home, 0% down (USDA) - Kansas/Missouri (recommendation, 2014, 3%)

[unplugme71]

Has anyone here bought a home with 0% down using the USDA program? I'm looking in the 100-125k price range.

I'm thinking about doing it since the price I pay right now for my apartment rent is going up like crazy. Right now I pay 1250/mo and looking at their website the rent is already up to 1550-1663/mo for the same unit. If they are going to ask that when my lease comes up for renewal, I'm going to laugh! People I work with tell me their mortgages are not even half of that!

I started to look at other rentals, but their rooms look outdated/rundown, old appliances, etc. The place I live at is somewhat new and very well maintained inside and outside.

I'm not really sure what to do. I have $4k cash. I have $10k in retirement. $7k in credit card debt (0% until may 2014), $21k in auto loans (3% rate). Income is 70k with 10% going into my 401K.

I've cut all the expenses that I could (cable tv, landline phone, netflix, fast food, slower internet speed, etc). That gave freed up $250/mo. So I should be able to remove the credit card debt fast.

[choo_choo_train_lol]

Find a good mortgage loan person. I forget what they're called. But a good one should give you plenty of info as to what you'd qualify for and expect. The process can be really easy if working with the right people.

[christiner81]

check income requirements for your area, you can google for this. you might make too much to qualify for USDA. In that case I'd look at FHA.

[Silverfall]

Originally Posted by christiner81

check income requirements for your area, you can google for this. you might make too much to qualify for USDA. In that case I'd look at FHA.

I'd look at conventional 3% and 5% down programs before FHA now. You can't get rid of the MI with FHA now.

[NinaN]

Contact a mortgage broker. Ask your friends or a local realtor for recommendations. USDA loans are a great option if you income and location qualify.

[unplugme71]

I qualify for USDA. I was told to do USDA over FHA as the PMI would be 1/3 the cost.

I spoke with a mortgage person that works with multiple banks. Not sure if that's the best way to go versus direct.

He also said rates are going up, expect 6% in 3-6 months. Just can't find the right property in the right location. Frustrating.

We also went over my DTI ratio. I'm at 29% on a 125k house and 35% on a 175k house. He said stay at 30%, go to 35% if you find the perfect house, but any higher and I'll be struggling.