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Hi Jnava, I believe the key to your question is the fact that your home is being built at this time, don't worry about the form right now, because remember it is a closing costs form of charges, expenses, loan funding, that are submitted AFTER the work is complete, they will have to inspect the newly constructed home after it is complete to make sure that guidelines have been met. I will try to find additional information on homes that have to be constructed using the USDA Direct Loan. I will send you what I find.
http://www.rurdev.usda.gov/regs/handbook/hb-1-3550/1chap03.pdf
beginning at page 44 (midway down) I do understand what you mean, but it does depend on what process the underwriter is using, I would definitely call the person working on your file and ask her, don't be hesitant about it, ask her what it means, she has to be open with you, because she is also there to assist you with the process.
THE HOUSE THAT I WANT IS NOW BEING BUILT. AND I KNOW THAT IT QUALIFIES FOR RURAL AREA. BUT ON THE APPRAISAL WHAT DO YOU THINK CAN GO WRONG?
Jnava, I don't think anything will go wrong I think you will be fine. The builder wants to sell the house remember that, if it's under appraised your fine, I doubt it will be appraised substantially over what you are eligible for. Relax and remember, pray often, and don't worry, it's gladly not in your control. It's in good hands now, I'm praying for you too.
Jacinta
Need some help on this question (s):
I am approved for the Guaranteed Loan Program. I have seen a couple of houses that I liked and may have one that I would be interested in putting an offer on. The only thing is, the closets are small and there is one bathroom in this particular house. My realtor states that I could possibly have the costs associated with the renovations added into the financing for the home, is that true and so how does that work? The price of the home is $80K and I have been pre-approved for $100K. Don’t know if I would offer that much, but I would need to see the comps for the area. Or would a better option, be to put in a offer and then do another loan to get what I would need to make the renovations later? I am so confused and everyone has their own thoughts about what to do, but I figured you guys would give me advice that is impartial and fair! Also the LO states that I could not do this through the USDA program and would probably not be financed because I would have to have PMI and the interest and higher loan payment....Please advise and/or let me know if you have enough information to tell me what I should be asking.
JACINTA THANK YOU SO MUCH .. YOU HAVE BEEN VERY HELPFULL,ALSO I WANT TO THANK YOU FOR PRAYING FOR ME THATS REALLY NICE OF YOU. I REALLY APPRECIATE THAT.
THANKS
Generally the only way to do a rehab mortgage is with FHA, which as your LO told you would have montly PMI.
However, call your state USDA office. There is a USDA pilot program based on the 203k. It's not available in every state. (I was told that it was tried in Michigan and later dropped there. I don't know how widespread it is.) In Ohio there are two lenders able to write loans with this program. We just lucked out and stumbled across one, which is how we found out about it in the first place.
We are purchasing a home for $220k and including about $25k in improvements in the loan. It is a little more restrictive than the 203k at this point. First, like the 203k streamline you can't make any structural changes. In addition to that you can't do any landscaping (we wanted to pour a patio and that was considered landscaping.)
So, you need to find out if there is such a program in your state, and if so what lender you can use to get one.