What would you do....need help making this decision, please!

[Anonymous]

I had originally applied for my mortgage hoping the USDA income limits were going to change on 3/20 as anticipated. Seller was willing to wait until 3/20 because lo said my application for USDA was a no brainer, nothing to snag it. Well, we hear that the income limits aren't going to change on 3/20 and I am still about 2100 over their income limits. Out of pocket closing was estimated to be about 4500 (inspections, apprisials and everything) with a mortgage of 162,000 at 5.5%

Talked to LO yesterday, she said that she can take my file conventional, no problem, I will qualify 5% down. That adds another 8,000 to my out of pocket for a grand total of 12,500 with a mortgage of 151,000 at 5%.

I put all of the numbers into an amorization calculator online and I get a difference in interest over 30 years of a bit more than 28,000

The only difference in the two loans is PMI. I don't know what PMI would cost honestly but I found a calculator online that calculated it at .90% and got me 14,000 over the time it would take me to get to 80% LTV when I could cancel it.

So the difference of saved interest - PMI is about 14,000 over 30 years (or about 39.00 a month)

The problem is, going conventional will WIPE out my savings. We are talking about not much left! I can show my retirement as reserves if they want reserves. But in this economy (and frankly after growing up with nothing, having money in the bank feels very good) I am not sure if I can accept no money in the bank. I will qualify for uncle sam's 8,000 but it will be 3 months after closing before I see that.

So my options are.....

1.  hope that USDA Rates change 4/20 and seller agrees to 30 day extension and go about business as usual

 if they don't then, I have to go conventional at that time to avoid losing money invested

2.  cancel the contract NOW before i lose my inspection monies (280.00) and if seller does not agree I will have to do this because

3.  can't do conventional NOW becuase it will take me the additional month to put the money together (I have most of it, we are talking about 2,000 here)

cavet, my LO does not do FHA and I hate to go somewhere else, she has put so much into this for me already

and there really isn't anyone I can get a gift from....

Payments are no problem, income more than provides for this house and I have very little debt (a car loan that will be done in a year and one CC with a balance and one small grad school loan that I am still paying) it is just getting this worked out that is the issue!

[WannaHouse]

Hmmmmm...

I think I would try to wait it out, but that's ME! Wiping out all of your savings is a big thing to me.

[Anonymous]

((((cavet, my LO does not do FHA and I hate to go somewhere else, she has put so much into this for me already)))

I sure can understand wanting to reward the person who helped you so much, but they are the one limiting your options by not doing FHA loans.

with times as they are now, I would recommend doing what is best for you financially and what leaves you in the best piece of mind.

[Anonymous]

Either go FHA or discuss an extension with the seller.  The thing is that if you are looking at 4/20 as a date for possible USDA changes, you will need a 60 day extension as it is not like once the rules change it will close overnight.  The likely outcome is the opposite.  There are probably hundreds of people waiting just likt his to see if the limits change. 

Anyways,  The limit change is defintely a big question as there is no guarantee it is going up, just that they are doing buckets for income instead of the current x for 1 person, z for 2 people, etc.

If you really like this house and want to get in on it, then contact an FHA broker and go forward.  Your LO's lack of options is their fault. not theirs.  I had to do the same thing when we bought and I felt bad, but could not afford to loose that much money over guilt.  With FHA you will be able to get financed easy enough it seems and not wipe out all of your savings. 

[Anonymous]

My realtor contacted the seller's realtor and the comment back was, what kind of assurance do they have that this will not happen again on April 20 and truth is,isn't any and I agree, from the seller's standpoint that is not good. Our contract says settle by April 30 so we would only need 30 days if infact we knew something would happen on April 20.

I don't need the limits to go up, I just need the buckets to change to 1-4 and 5-8,

I talked to my realtor on Sat about what to do, he is also a friend of our family. He told me that I had to do what makes me comfortable and if depleting my savings doesn't make me comfortable (and it doesnt) then I should talk to someone about FHA. He gave me a number of someone who has done business with before and I have an appt next week.

I asked him if I should call my current LO and tell her out of courtesy, he said to wait until after I talked to the FHA guy next week and made up my mind exactly what I want to do.

When I crunched the numbers for FHA, I wasn't in panic mode like the way I was when I did the same thing for a

conventional loan. 

[WannaHouse]

I do think FHA is the way to go then.  Like Mickie said, there is no guarantee that USDA will EVER change, let alone on 4-20 or 5-20, etc.

I think FHA is the way to go now.