USDA Difficult process?

[credit4life]

Hi Shellie,

First of all Congrats, on your journey! I wish you the best.

If I may add my 2 cents. I am mortgage underwriter and have been for several years. USDA loans do have a longer processing time due to the structure of the loan around  conditions. I would encourage you prior to going through the loan approval process to speak with a lender that works with USDA loan programs. They would be able to more accurately give you the information you need to purchase a home through this program. They will also be able to tell you how much of home you could afford based upon your DTI. Debt to income ratios. Which USDA loans are very forgiving towards DTIs because they include your dependents into their calculations and tuition for children.

FYI: some realtors shy away from this program and try to discourage home buyers because they don't want to wait for their commission check!

I agree with all the other post, USDA is a wonderful program. If you qualify, you should go for it for sure!

Good Luck.

[Jaguars28fan]

From your income and since you aren't in a rush, you should really consider USDA Direct.  You won't be talking to any banks, just with the USDA office.  I was eligible to go that route, but we didn't have the time.  They normally run out of funds quickly, but they should reload every september ? I believe.  They are very flexible with your credit score, I believe a guy on here (macbookguy  has a great post) got one with a score of 580?  You definately have to take care of that tax lein.  You would need all your credit issues to be 0.  You'll need a few tradelines over a year ( credit cards, rent, car insurance, etc.) 

I don't know if they require a PMI, but they'll subsidize your interest to 1% most likely.  You could probably afford more than an 85k house with it as well.  Definately call your USDA office, they are a lot more helpful and willing to work with you than banks, atleast mine in PA was.

[Shellie]

RIght now I have 2 Credit cards from Capital One, both in good standing.  The older one has a $300 limit that I was told would be increasing to $500 in June, the second I just opened this month and it opened with a $500 limit! I am hoping for the increase in my credit score in June.  SInce March I have paid off, to the OC's, 4 medical bills, paid down two separate utility bills, also to OC's.  I have a few other debts that are scheduled to fall off in July and one in December.  The only other thing is the tax lien.  I just recently got my first car loan ($350/mo) thru my personal bank and they do not report.  He told me that up front and made sure I understood that it would not help my credit score since they do not report.  I chose to o ahead with that route because he offered me 7% interest and the other places were offering around 21% interest.  I also have some student loans.  There are 4 of them and they total around $11,000 and I pay $144/mo on those.  Those and utilities are my only monthly debts.  I am concerned because all of the bills I paid off still show a high balance and I paid them over 2 months ago and the utilities also still show the high balance. My credit score was 595 3/18 and fell to 568 4/27 from a high balance on a cc and some shotgun pulls from car dealers.  I plan to get all my ducks in a row before I even start the application/approval process for a home loan.  I am trying to avoid a bunch of hiccups after I start the process or hopefully avoid delays!

[Shellie]

As far as the price of a house, I am trying to stay within an affordable budget for monthly payments.  I don't want to get in to a home loan and not be able to make the payments.  What is PMI and how do I find out where my local USDA agent is?

[Shellie]

Ugh..I've looked everywhere for a calculator to see how much how I could afford, monthly payment wise, and the either range from -$ amounts to needing 30% down.  I guess I'll just have to wait. 

[Shellie]

Bump!! This site is to helpful! I am so greatful

[jazzydaddy]

We are in the process of getting a USDA guaranteed loan right now.  It's not hard, and it's not that long and drawn out.  We're at the very end of the process right now...as in my phone should ring at any minute saying the USDA commitment is in and we can close.  Waiting at this point is the hardest part. USDA has had our loan for 10 business days as of today and we're so anxious to move this weekend.  This is really the hardest part.

Find a realtor who doesn't mind working with sales going through the USDA.  Ours apparently doesn't like it and isn't being helpful for us at this point.  I've had to chase a lot of stuff down and make sure she did her job.  I don't like that I've had to do that.

[Jaguars28fan]

This post is very helpful. http://ficoforums.myfico.com/t5/Mortgage-Loans/USDA-Direct-Rural-Loan-502-Direct-for-very-low-or-low...

You should try to google USDA and your state, that should pull up the contact information you need.  USDA Direct is a long process, but like you said, you aren't in a rush.  PMI is just an extra payment you have to pay USDA or FHA a month.  For guarantee it's not that much, maybe 40 dollars / month?  for FHA, it's a little more.  I don't know if Direct has it.  Direct will also subsidize your interest rate, so your monthly payments will be lower than someone who has a guaranteed loan.  I used www.mlcalc.com for calculating my monthly payments.  You need to know things like your PMI (your guaranteed is .4%), your property tax (i wouldnt know that), your house insurance (my guess is around 600), your interest rate (anywhere from 1% to 3.5% at the moment, depending which route you go), and your mortgage term (guaranteed is 30, direct is 33 years i believe). 

[JAM2013]

Someone I know closed on a USDA loan this year.  From what I know, it did take 4-5 months from start to finish and the bank seemed to need more and more information but this might not be the typical experience.