First of all, thanks very much for providing a resource like this. As my wife and I have been shopping houses for two years, I've become accustomed to late-night google searches for all the little questions that have cropped up through this process. I've found myself here several times, and I sincerely appreciate that so many are willing to weigh in with their experience and expertise to provide others with encouragement and realistic answers.
I'd sincerely appreciate any thoughts on our situation. Although I feel like things are probably going to be just fine, there are a few concerns:
Based on the above, what are your thoughts? We are pursuing a USDA guaranteed loan with no money down, and my main concern is simply that they'll want us to cough out a five-figure down payment that we simply do not have. The ratified contract includes that the seller is going to cover $6500 in closing costs which is more than the lender estimated would be due. We are paying for the inspection out of pocket, and that is happening tomorrow.
We had considered another regional type of loan with 3.5% down, but even that figure was out of reach given the timeframe. We got a very good deal on the property that we found, and we wanted to move on it as quickly as possible. From what I've read here, simply having a few monthly payments in cash reserves should be enough, but I haven't found a great deal of information about 0-down loans. Any input would be sincerely appreciated. Thank you!
Your situation sounds good to me. You shouldn't have to explain any negative information because your credit scores are above 620 and you should receive an approval from the GUS system. USDA requires no down payment, so you are fine there as well. You are going to receive a good portion if not all of your closing costs. As long as the house that you are purchasing appraises for more than the purchase price, guarantee fee etc. You will be able to roll any additional closing costs into the loan. You will also be able to get some pre paids back at closing. The appraisal fee, homeowners insurance, and earnest deposit. You should be in good shape. Ask the loan officer if they have any overlays that you need to know about. Overlays are rules that the bank may have above and beyond USDA 's guidelines. Good Luck with the process, I hope you have a smooth one.
Thank you, dricedad, for taking the time to read all of that and weigh in. We are confident about the situation, but our loan officer is extremely conservative when it comes to offering any information. The inspection went well, and we are in the process of dealing with contingencies while waiting for the loan paperwork to go through. I'll breathe a huge sigh of relief when we get word that everything is on its way to the USDA end for approval.
Does your lender process USDA applications regularly? Our does and he told us that it would take at least 60 days to close. USDA is running close to 4 weeks behind in Ohio.
Yeah, ours does as well. We are in Virginia. In mid October they were saying around 30 days, but it slowed down a lot. Week before last he was saying 45 days, but he said they had caught up 3 or 4 days since then when we spoke on Wednesday. We built plenty of time into our contract (est. close 2/5) so that it could take up to 45 days, but I am just anxious to see us get to that phase. Good luck!