Applying for a USDA Loan

[BayRaider510]

Finally found a house I like, going to make an offer tomorrow. Here are my details:

House Price: $160,000

Loan Type: USDA Guaranteed

Credit Scores: All 750+

Tradelines: Only two. 27 Months and 14 Months old. Both CC's.

Debt: None, just $50 on one of my CC's with a $20 minimum payment.

Income: Roughly $39-40K a year.

Taxes: Rather cheap in my area, last year this house was only taxed $1500.

County: Stanislaus County

Savings: 5K

LO said I should get a 3.75% rate if all things go accordingly.

What do you guys think, will I get approved? I know 4x my income is a little much but the MI is cheap on USDA at 0.5% and I've budgeted quite well since I started my job 3+ years ago.

[Anonymous]

Where did you source these credit scores? If your fico scores are all that high then I don't see any problem with you getting approved for USDA. With scores that high though I'd look into conventional financing. Maybe 5% down conventional. You wouldn't have to save much more to swing that 5%.

[BayRaider510]

5% conventional would cost me a lot more and higher MI. Stronger offer yes.. but I'd rather take my chances with USDA. 

[Anonymous]

5% down conventional is cheaper for me. My scores aren't much better than yours. 750 score MI can't be much more than .6. Keep in mind.... Conventional MI goes away after 80% LTV. You're going to pay 2% upfront MI then .5% FOREVER.

[BayRaider510]

I thought 5% conventional MI was a fixed .9? It depends on score? 

I don't have enough money for that financing anyways though. 5% would be 8,000. I have close to 6,000. 

[Anonymous]

Yes depends on score as well as down payment. MI is insurance so if you present less risk (higher score) than you wouldn't need as much coverage. My 760 is like .62 IIRC. Like mentioned before though you need the cash to make it happen. It might be $20-$30 a month more but you also are only going to pay if for a small percentage of the time instead of for the life of the loan. Then you'll save a lot more monthly after.