topic Re: USDA Direct loan questions in Mortgage Loans

USDA Direct loan questions

Matisnew — Sat, 12 Jan 2013 16:35:29 GMT

I've read many great topics on this already but I'm still a little confused. Monday morning my fiancée and I applied for a USDA direct loan. We are under there cap for money and all that. I think we have a pretty good chance except for one thing, my credit score is 600 and hers is a 652. She just started building her credit about a year ago. I on the other hand had a student credit card when I was 18, lost my job and used it for gas without thinking of the consequence. I had 2 thing go into collection the card and a school bill, but both were paid off about 10I months ago and are paid status in my report. Will this hinder us from getting the loan? We have an open line of credit that we have had for 1you year now with no late payments, and a secured credit card that we use for gas and pay off at the end of every month. She also has a sears card that she uses for 10-20 dollars a month and we pay it as soon as we get the bill. Will this help is get into a usda loan? They already ran our credit and started employment verifications. Are these good signs? Thanks for any help in advance!

Re: USDA Direct loan questions

pizzadude — Sun, 13 Jan 2013 01:15:09 GMT

I am moving this to mortgage loans, should get responses there...

Re: USDA Direct loan questions

samy2576 — Sun, 13 Jan 2013 02:08:41 GMT

This is the kind of loan I may be getting as well. The bank I am using requires a 640 but that can vary depending on the lender I think. I was also not allowed to have any unpaid collections or lates within the last year.

They will run your credit before making any decisions to see if they can work with you.

Re: USDA Direct loan questions

Matisnew — Sun, 13 Jan 2013 02:11:32 GMT

Mine is direct not guaranteed.

Re: USDA Direct loan questions

playboy — Sun, 13 Jan 2013 02:58:44 GMT

I don't know if it'll hinder you. I submitted a application for a home a week ago today. We started looking at loan options and the loan officer said that I would qualify for USDA. The first thing your lender should have done was enter your info in the USDA's automatic underwriting system to see if you even qualify for the loan. That's what my lender did. I was approved based on USDA's system but that's the first step. Most banks will still send your file through manual underwriting when it's that time. Next thing you need to know what is the minimum score that the bank requires? If you look at USDA's website, I believe the minimum score they're looking for is 600 or 620. Again your bank may require something different. Most bank will go above what USDA requires. For example, in my situation USDA states that if the borrower has a 620 or higher credit score, he/she doesn't need to write a letter of explanation for past credit blemishes. Well, the lender I'm going through UAMC, required that I write a letter of explanation (thanks myfico for the various letter formats) for 9 charge-offs that occurred 7 years ago. My mid score is a 674. If the bank underwrote to USDA's specification I wouldn't have had to write the letter stating that my father fell ill and that I had to move back to take care of him. All of those charge-off/collections are paid but my loan officer scrutinized my report and asked why accounts where still showing as collections and I had to explain that they were paid and I had to get letters from the CA stating that and remove any disputes, which were removed. If you have a good loan officer, he/she will get you prepared before you go to underwriting by asking the hard questions and asking for tons of documentation and why did you do this and why did you do that. Those are the ones that typically work closely with the underwriters throughout the process. That'll go along ways towards answering any questions that the underwriter may have. You're just getting started in the process. Your loan officer should keep you abreast on the happenings. Don't be afraid to ask questions. After all, you're paying the mortgage. My file to went to underwriting on Thursday. I'm hoping to hear something by 1-18. Send good thoughts and prayers my way guys. I'll do the same for you guys. We're all in the same boat; made some mistakes and now we're trying to make good. If you have more questions you and PM me whatever they call it.

Re: USDA Direct loan questions

MovingForward_2012 — Sun, 13 Jan 2013 16:19:47 GMT

Wow! Congrats! I didn't know myfico had letter formats! Thanks for the tip as I plan to start with those. I was unsure what format the underwriter wants the LOEs written in. Thanks so much!

Re: USDA Direct loan questions

Matisnew — Sun, 13 Jan 2013 16:38:00 GMT

Thanks for all the info but mine isn't through a bank. Its straight from usda, my lender is a usda agent. Not a guaranteed loan.

Re: USDA Direct loan questions

Matisnew — Sun, 13 Jan 2013 20:49:31 GMT

So today I checked my fiancée fico score, 664 on myfico. Mine was 600 equifax about a month ago. Experian I have a 634 as of today. I haven't found a transunion, I did do credit karma which I know is fako and it was 605. Maybe we will have better chances than I thought!

Re: USDA Direct loan questions

MovingForward_2012 — Mon, 14 Jan 2013 14:12:48 GMT

Myfico will give you a TU score but you have to pay extra for it as it doesn't come with score watch.

Re: USDA Direct loan questions

Matisnew — Wed, 16 Jan 2013 14:54:40 GMT

Got a call from usda telling me they wanted us to come in tomorrow for an applicant interview and to make sure we brought our licenses. I hope this is a good sign. Family friend said that's when they were told how much they're approved for!!!

Re: USDA Direct loan questions

MovingForward_2012 — Wed, 16 Jan 2013 14:57:27 GMT

Wooo hooo! That sounds like a good meeting! Let us know how it goes! :-)

Re: USDA Direct loan questions

VikingsLoyalFan — Wed, 16 Jan 2013 23:09:34 GMT

I don't know if it will hinder you. My husband and I applied for the loan; I was approved but not him. My fico is 655; however, my lender told me that the USDA loan could only be given with a fico score of 620 and no collections or 640 with some collections. Really stinks because his fico was a 551 and he makes 2.5x more than I. So I am building my credit a little more before we go through for a house. I want to get a really good mortgage rate. Good Luck to you guys!

Re: USDA Direct loan questions

MovingForward_2012 — Thu, 17 Jan 2013 01:21:05 GMT

What was the drop in home price from your husband being removed from the loan? Is it still enough to get what you want? I would work on his scores while you work on yours to see how far you can get...you never know, the hard work might pay off! :-)

Re: USDA Direct loan questions

VikingsLoyalFan — Thu, 17 Jan 2013 18:07:56 GMT

Hi Moving, yes the loan is enough with just me. I got 100k loan and the houses here are dirt cheap because of the area (rural)

Re: USDA Direct loan questions

MovingForward_2012 — Thu, 17 Jan 2013 18:09:29 GMT

Perfect Viking! That is great news! Congrats! :D

Re: USDA Direct loan questions

Matisnew — Fri, 18 Jan 2013 15:01:06 GMT

Had our meeting, approved for area maximum!!! He said since my two collections were paid off 9 months ago he wouldn'thave hold them against me. But funds aren't available til April at the latest. But 90 day closing would put us there. House hunting starts for real today. And we are eligible for a 10k home buyer grant! Awesome!

Re: USDA Direct loan questions

JM-AM — Fri, 18 Jan 2013 15:40:38 GMT

Congrats. Happy house hunting

Re: USDA Direct loan questions

Matisnew — Sun, 20 Jan 2013 03:36:45 GMT

Making an offer on our first house in 36hrs. Does anyone know what's a reasonable offer? They are asking 69500for the house, we are discussing offering 61 because it needs some work and our realtor said they are motivated sellers. Work is all cosmetic. Stuff we can do ourselves. Kitchen cabinets, new carpet, paint... would this be reasonable offer?

Re: USDA Direct loan questions

JM-AM — Sun, 20 Jan 2013 05:53:55 GMT

Only you can say if its a reasonable offer. Do you want the house? If the sellers counter offer are you still willing to buy the house? If they just flat out reject your offer, are you ready to pay them the full asking price?

In my area Kitchen Cabinet replacement can cost thousands of dollars. Kitchen cabinet refacing still would be a few thousand in my area.

Depending on size of house carpet replacement is another cost of several thousand dollars. I havent owned carpet in many years, but I believe this to be a fair estimate in my area, and probably a cheaper prediction since the smallest home in my area is about 3800SQFT.

Painters in my area on the very low end charge $400 a room and thats a shoebox room, with no sheetrock repairs. Love those advertisements $400 a room until they walk into your house and say thats for a 10x10 room. Are they kidding me!!!! The only thing in my house close to being a 10x10 room are the walk in closets.

While you can do some repairs yourself, your time and work does have a value, plus materials.

Once again only you can determine what is right and reasonable and what you would be happy with. :)

Re: USDA Direct loan questions

Matisnew — Mon, 21 Jan 2013 01:24:55 GMT

Its 1200 sq feet. Its a perfect home for us. My uncles and I (one being a carpenter and the other a home builder) can do all of the work. Painting my fiancée wants to do. We priced cabinets and carpet for 3a rooms around 1100 dollars.

We are hoping to offer 61 if they come back, I'm hoping we can hit middle. 65. We are willing to pay full price. A completely remodeled house sold 2it blocks away for 96k. So I think its great. Especially with a large yard and garage.