09-12-2010 03:31 PM
Here's my current info:
I only have 2 accounts reporting:
Car note- $ 1,024.37 (payoff is much lower and will be paid in the next 3 weeks. paying off one year early. should be $296/month)
Home Depot- $ 1,146.24 (paying more than my minimum of $10/month but not too much so I can build my credit)
I'm self-employed and on my tax returns my income is: $26,650/year. For my parish, the income requirement cannot be above $39,150 for two people (myself and my 9 year old).
I already got my pre-qualification letter back yesterday saying that, "During this informal and unbinding review, it appears you may be eligible."!! Yay! I'm applying directly through my USDA office. I faxed off my pre-qualification application last Tuesday, called to confirm that they got it on Wednesday, and received the pre-qualification letter in the mail on Saturday. The city they're in is about 2 mailing days away. I'm thinking they're not too busy.
I would love to know how much I might get approved for! I read that in my parish, the average home price is $150,000, but that $170,000 is the limit. I don't know how accurate that is. Anybody know how much is a good estimate of what I would get approved for?
Also, what are the next steps (assuming everything goes positively)?
And finally, what does "subsidized" mean? Do they pay a portion of my note?
09-15-2010 06:27 PM
Well, here's my thoughts. I am at the very end of my USDA direct journey so that's the only expertise I have (limited).
The car loan won't count if its about to be paid off, mine didn't because it was going to be paid off in 3 months (at the time of app). As far as the Home Depot balance, I would pay it off. I realize you are trying to build credit, but maintaining a large balance has never been the way to go as far as I know. Every time my utilization goes past 10-15% my scores go down. It just depends on you I guess.
As far as how much they will make you eligible for, they approved me for the max in my county and I make at this time substantially less than you. (157k is what I was approved for) I would imagine if your DTI isn't too out of whack you will be approved for a decent amount.
The subsidy is different for everyone. My loan has been subsidized down to 1% for now. They re-check every one or two years to make sure you are still qualifying. The subsidy is a funny concept. Yes, they are paying part of your payments each month, but in actuality they will eventually get repayment. Maybe not all of it, but some. If you sell the house or die, they are going to get some of it back.
What comes next? Well, they will either call you or mail a certificate of eligibility. I personally got a phone call to setup a meeting with one of their regional offices and went down to discuss everything. They explained the process and gave me my certificate. Basically, you are just waiting.
I personally plan to re-fi as soon as possible. Good luck!