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We are interested in going the direct route. Although I have learned that is can be a very stressful and drawn out process.From what I have read the terms are longer than guaranteed and you also get subsidies if you qualify. Would I be wrong to assume that with direct route you get more house for lower payments than Guaranteed USDA? If so, is it usually a big difference in terms of house/ payments?
We are considered low income- Gross was 49000.00 consistently for 2 years for our family of 5. I've been very determined to get our credit to 650 and apply for direct but I also have a LO who was going to look into FHA loans and Guaranteed USDA for us too and I am not sure if we would even qualify for much house with that yearly income. My LO who came recommended is not very personable and very short. I understand she probably doesn't make as much off of someone like us, so her motivation to help isn't really there.I thought I would give her a little more time. I also found a group that is not for profit who help with low income families find housing, loans and grants. I thought they may be a good place to start if things don't work out with LO.
Another question when it comes to interest rates and FHA loans and USDA loans are the rates still relatively low (like in the 3% margin)?
I feel like I'm rambling. I just have so many questions and I am really nervous about the whole home ownership thing. This would be our first home purchase and frankly I am clueless about the process. We have been renting for 12 years. I have been researching and reading the forums. I am so thankful to stumble upon Myfico.com. Thanks for any insight you can give me.
Personally in your situation you can afford more home with USDA, because the mortgage insurance is cheaper, and in my opinion cheaper for you in general.
With a salary of 49K a year you should qualify between 150K-190K give or take a few depending on other circumstances in your credit profile and DTI.
Yes rates are still in the 3's...
You can also look into NACA, which many have forgotten about, also offers very low fixed rates (last time I looked they were offering 3% fixed, may have changed), works with credit problems, low income and moderate income, possibly no down payment needed, and possibly no closing cost. They do charge a membership fee which I believe is about $20-$50 to partake in their workshops, which is a requirement. The process is a little slow, but I have seen them approve people with scores unheard of after they complete their steps. Obviously YMMV but it is a very good option for many people.
JM-AM
Thank you so much for mentioning NACA. I have never heard of the program but it may be what I need to build my confidence for a home purchase. They have a workshop in March in Denver I think I will attend.
DTI, all we have are student loans. We are on a income based repayment fotr them. Do you think the fact our payments are so low will have a negative impact when it comes to lenders?
@Voodoo_Laveau wrote:JM-AM
Thank you so much for mentioning NACA. I have never heard of the program but it may be what I need to build my confidence for a home purchase. They have a workshop in March in Denver I think I will attend.
DTI, all we have are student loans. We are on a income based repayment fotr them. Do you think the fact our payments are so low will have a negative impact when it comes to lenders?
How much the payment is plays no real part. As long as you are paying and on time.