We've been in this pre-approval process for 2 weeks and we're finally getting an answer tomorrow. We applied for a 65,000 USDA Guaranteed Loan. Hubs made 15,301 last year, has scores of 634, 643, and 689. He paid off a business loan in April and will pay off the mortgage on the building next week. We have no other debt. The LO said his limited credit history could be an issue, even though there are no lates and the one paid off in April was 3 months early. Our other hurdle is rent verification. We've paid 600/month for over 6 years (over $45,000) but we pay cash to a private landlord, so no cancelled checks and they only take VOR forms from property management co.'s. Verifying our rent would help greatly to show we can swing the $468/month mortgage. LO said it's 50/50 whether we get approved.
Add to this the fact that the house we want, our dream home, dropped from 65 to 50 thousand last Thursday. It has been for sale since last October, when it was listed at 94,900. O_o And our realtor told us today that there are 4! other offers already! The reason for the drop is that someone walked off with the AC unit, presumably for scrap metal. Also one window has a small hole. As near as we can tell it is otherwise perfect. It's a well-built, 2br cabin-y ranch home on a wooded lot in a very private, very expensive neighborhood. It would be like living in a state park. We want it so bad! We basically have to wait to hear from the LO tomorrow and IMMEDIATELY call our realtor to make an offer, if we can.
So here's a hypothetical question. Let's say we find out tomorrow that we only qualify for 55,000 instead of 65. Could we offer 55 and still be able to borrow enough for closing costs and repairs up to the appraised amount? Or is 55 the absolute maximum including cc's and repairs? I'd ask my LO but it's 10:30pm. He's probably sick of my constant questions anyway. Any insight is much appreciated. Thx.
I don't know the answer (probably depends on whether you can do a rehab loan), but I really hope you get this house! Pulling for you!