USDA Direct Loan

[Anonymous]

---

@Anonymous wrote:

i recieved my letter of eligibility April 2nd, by mail and by e-mail.  My letter states that I am eligible for $71941.  I put an offer in on a house for $71500.  I e-mailed the loan person and   recieved an e-mail that states that I am $9.00 over for what I am approved for.  And If I want this house I have to pay the $9.00 plus 1 year homeowners insurance upfront.  I asked her how could that be since my letter states that I am approved for $71900.00 and my offer was $71500.00.  she said that I was only approved for $71491.00 and that  the I wonder if anyone else has gone thru this?

---

$9 or $900? If $9 just pay it. lol Less drama in my opinion.

[Anonymous]

---

@Anonymous wrote:

i recieved my letter of eligibility April 2nd, by mail and by e-mail.  My letter states that I am eligible for $71941.  I put an offer in on a house for $71500.  I e-mailed the loan person and   recieved an e-mail that states that I am $9.00 over for what I am approved for.  And If I want this house I have to pay the $9.00 plus 1 year homeowners insurance upfront.  I asked her how could that be since my letter states that I am approved for $71900.00 and my offer was $71500.00.  she said that I was only approved for $71491.00 and that  the I wonder if anyone else has gone thru this?

---

Our Certificate of Eligibility states we're approved for $210,000 based on a downpayment of $0, estimated annual real estate taxes of $1,200 and insurances of $600 for 33 years with interest of 3%. If any of those numbers change, it affects how much we can borrow. So, if the insurance & taxes are higher, we get less house. Our USDA loan officer told me to keep it below $190,000 just to be safe. We found a home for $174,900 with taxes of $1,200 and insurance just over $600. The interest rate will be going up on May 1st to 3.125%, so that's probably what we'll be locked in for. I've found this mortgage calculator to be the most helpful calculator out there. 

[Anonymous]

i know ,i will gladly pay the $9.00 , but why do i know have to pay all of the insurance for the first year up front.  according to my letter the amount included taxes and insurance.

[Lemmus]

...your letter says you are approved for a loan amount based on their estimates of your taxes and insurance, not that they are included in the loan ...the taxes and insurance estimates are used in your DTIR calculations and thus your approved loan amount ...it is standard practice for the buyer to pay a full year of insurance in advance as well as taxes ...you need to get a GFE from your USDA LO on exactly what your closing costs will be.

...if you had bought for a lower amount than they approved ...and the home appraised for more, you could have rolled the closing costs into the loan up to the lower of the appraisal or the approved loan amount ...but thats not your situation ...get a GFE and be sure of what you are going to need in liquid assets in order to close ...hth

[Anonymous]

1 yr of prepaid insurance is a requirement. If your approval is for a larger number (and your appraisal comes in high enough you can get that rebated at closing) same with allthe other prepaids. Your inspections will come out of your pocket, but can be rebated at closing. A 0 down loan doesn't mean you wont pay anything to get in. If you want to see a list of what my prepaids are on a USDA loan, and the process take a look here...

http://ficoforums.myfico.com/t5/Mortgage-Loans/USDA-direct-my-process/m-p/3995644#M169765

also if you can find a place with lower taxes than the estimate, you can go higher than the pre approval number. My pre app was only in the 75k range, but est taxes were 3.4k and est HO ins was at 1k. I found a place with taxes at 1.9k and ins at less than 600. I was able to go to over 90k on the purchase. I am also putting in a down payment, so mypurchase price is 93k.