Help with D.T.I. on USDA loan (Mississippi)

[ledzep75]

Trying to purchase home for $49500 using USDA and "rolling" required closing costs into the loan bringing purchase price to aprox. $52,000. My credit score is 705 , and last two years earnings (w-2) show $23,500-employed with same company 3 years.  I also receive $200 month for child support. *My only monthly bills are $400 car payment(4 years remaining) $80 student loan (bal. 2,800) and 2 credit cards with minimum monthly payment of $35 and $25 (total balance $600) . Based on these numbers, could someone tell me if I'm alright regarding the debt to income ratios? Appreciate any advice

[dragontears]

Since I don't know what term or interest rate you would get my answer is solely on what your DTI is and how much PITI you could go up to without child support and with child support (in parentheses)
Current income 1,958 (2,158)
Current debt payments 540
Current DTI 27.6% (25%)
Max DTI for USDA 41%
Max amount of PITI for mortgage 263 (345)

[ledzep75]

Thanks for replying dragontears. Your numbers sound very encouraging.  *This would be a 30 year loan with interest rate at 4.9%

[Anonymous]

UsDA direct or guarenteeed? Direct has more help for low income.

[ledzep75]

Guaranteed as it stands. With my low income, I would  rather go Direct if  my chances of qualifying would be better. Is income the major difference between the two ? *Thanks for your advice

[Anonymous]

We are currently trying to buy a home with USDA. We just submitted our conditions to underwriting after approval. I had to submit 12 months of child support going into my checking account, as well as my husband showing 12 months of his child support going onto his support card also. Our home we are selling is USDA. His ex missed one month the year before we bought it so he could not use child support as part of income. Hopefully there have been no missed payments so you can include it. I know all underwriting is different, but USDA has been pretty strict on child support income both times we have used them.

[JVille]

You have shared sales price of $52,000 and rate of 4.9 but still need annual Taxes, Fire Insurance, PMI , HOA (?) so we don’t have a complete picture. The child support, how long have you gotten it, is it paid thru the state system and is it provable that it is Fully Paid each and every month with 3+ yrs remaining after close of escrow.

[ledzep75]

52K includes all of the above- taxes , insurance, PMI (no HOA) original asking price is $49,500 . Yes and yes on child support ...

[Anonymous]

Yes Direct is better for low income. Go to Rd.USDA.gov and read everything there. You need to be as knowledgeable as possible throughout the process. There are eligibility guidelines for both Direct and guaranteed programs and also the lender handbooks for both programs. READ them.

[JVille]

The $52,000 May include PMI (upfront portion) but it does not include Taxes & Ins those are paid seperately. You payment will include P & I, Real Estate Taxes and Fire Ins. So you are missing two components. Typically you would have Upfront PMI and often a monthly portion to. A USDA Lender on this forum can answer that question.
Have you sat down with a lender, all your questions will be answered in the first 10 minutes. I think a $400 car pmt is a huge issue.