Are UW just as stringent with a low loan amount as a high one??

[buyhouse36]

We were originally pre-approved for a $120K house. But when UW got a hold of our tax returns, the deal was shot down due to Mr's 1099. He had 3 years of tax returns with 1099 but he one of the businesses was discontinued in 2009. So they would not count the income from that business in approving loan. When you take out that income, our DTI was 50%. We were completely blindsided by this. We had already drained our reserves to pay off stuff to qualify for the $120K to begin with, so were not able to clear more debt to lower DTI.    So we decide to buy a cheaper house and get a new LO. (We were furious with the original LO for not telling us that upfront)  Anyway, the new LO has issued a pre-approval for the new house BUT I am worried now. Should I be???

Gross Income $52K

LO will only count  $2940-$3000 a month due to 1099 problems

current debt payments $674

No substantial reserves

Middle Scores are 631 & 661 (no BK, Foreclosures, etc. Just one collection we have been paying on. Its now about $1200. No other collections between us)

Loan amount $82000

USDA Rural loan.

[Jazzzy]

Are they just as stringent with a lower loan amount? Yes.

If you have a preapproval for the lower amount without counting the income, you should be OK.

[ShanetheMortgageMan]

Your debt ratios appear to be 19/42%, or thereabouts, so that should qualify for USDA.  How far along into the process are you?

[buyhouse36]

We worked with the orginal LO for one year plus. We finalized the deal on the lower house this past Thursday. The new LO pulled our credit in mid-April.  We need to go to his office today to sign additional papers. So I think we have a long way to go.

[ShanetheMortgageMan]

Yeah you have at least 3 weeks left it sounds.  Are you aware of the situation with USDA funds at this point?

[buyhouse36]

There are no rumblings in our area over USDA funds. What is the situation??

[ShanetheMortgageMan]

Check USDA isn't running out of funds as quickly as they thought

Only applies to the Guaranteed version, not the Direct version, however if you are going through a lender (you said you fired one LO and got a new one) you are for certain going with the Guaranteed version.

[buyhouse36]

Update:

Our LO called my job requesting a  VOE.  My manager promptly filled it out and faxed it back.  ( I found out I am getting a raise in July! Yippee!) Anyway... We also got a quote on homeowners ins  that we sent also.  Everything got to my LO by Wednesday afternoon.  He said our file was going to UW that afternoon or early Thursday morning.  We are getting a USDA loan....Will we have problems closing??? Will the funds be gone by then? We were hoping to close this month!

BTW- The income the are counting is $2978 month

Debts per month $678

Homeowners quote $807 per year

Taxes right now ARE NOT HOMESTEAD. Children are selling their deceased parents home. But they just paid around $1200. What are thoughts on DTI? Monthly payment?