Starting from scratch.... any advice is welcomed

[msnabs]

Hey guys,

I have been working with my local USDA office to see if I would qualify for a Direct Loan and they told me that I make too much money for the program. The person there suggested that I apply for the Guaranteed Program, which is also through USDA. I currently make $33K a year and my monthly expenses are: car payment-278 CC 32 and a unsecured loan-50. I am also a veteran and could qualify for a VA loan as well. My mid score is 648. My questions are: which program would be most benefical? Should I do VA or USDA Guaranteed? I still have all of the docs from the Direct Loan program and my student loans are in deferment until 2011. What bank or mortgage company should I contact in SC? I dont have any relatives or friends that have recently purchased a home to ask. I was thinking either BB&T or Wachovia also Wells Fargo. Any suggestions or advice would be great!

[Anonymous]

From what I've seen, VA's rates tend to be higher than USDA.

BUT, if you do decide to go VA, see about joining USAA and getting your VA loan from them. Trust me, they have a MUCH better rep than Wacky (guess where I -- unfortunately -- bank? If you guess Wachovia, you get a gold star!).

Seriously, we've dealt with USAA and Wacky with several loan products over the years and USAA has consistently gotten awards for their customer service for a reason. Wacky just gets complaints.

[Anonymous]

USDA  - no downpayment, no pmi but a 2% funding fee that can be rolled into the mortgage

VA - no downpayment but monthly pmi if not 20% down

that monthly pmi can make or break the deal if you are close with your dti which by my calculations right now you only have about 765.00 a month to play with for principal, interest, pmi ,taxes and insurance

100,000 mortgage at 5.5% is a principal /interest payment of 565.00, you still have to figure in taxes and insurance....and maybe pmi

and we still haven't taken into account your student loans which I understand they will take into consideration unless you can get your servicer to say that they will be deferred for three years (or is it two?)

[Anonymous]

Teacher here its two years. But I talked to someone at Bank of America today and she told me one year. So I'm not sure.

[msnabs]

Thanks for responding,

My student loans are in deferment for two years, one reports that way on my credit report and with the other, I can get the information directly from the student loan website that states that repayment starts in May 2011. From what I have been told it has to be at least a year,  I want to stay under $100K for a house. Home prices are pretty good in this area and all of my county qualifies fro USDA.

I am just confused as to where else to apply for the Guaranteed program,since its is probably my best bet. I dont have the 20% right now for a down payment, I have around 5K that I could use towards the purchase. What kinds of questions should I ask when talking to a LO?

[Anonymous]

USDA is zero down so don't worry about the 20% issue. You will either need to pay closing or negioate seller assistance which in this market is pretty easy to do. Call you local HUD office and ask for a list of local lenders for USDA Guaranteed.

Like I said, USDA is zero down but there is a fundfee that can be wrapped into the mortgage if your apprisial allows it to be. So 100,000 house is going to get you a 102,000 mortgage. Count on about 7,000 for closing but make sure you try to negioate seller assist when negioating with a seller. It is possible to pay nothing at closing.

[msnabs]

I will, thanks, I hope this goes faster than the previous process through USDA. It was about a month before I had a final answer, which was about the right time frame. My current lease is up at the end of June. I hope to be able to do some house hunting really soon.

[msnabs]

Hey guys, just thought I would push this back up to the top. I applied online for a mortgage through Wells Fargo ( my aunt recommended them, she works there) and am getting antsy. Any one else with smoe suggestions?