Will I look stupid? haha

[jcstarkey8826]

My credit score is on pace to be USDA ready (650ish) come September/October. Im going to list what I have and am doing/looking at so far, and would like some feedback on things I might want to do to be better prepared.

Income: 48k last year, 30k is salary.

GF Income: 18k per year.

Looking for home in MI for between 120-160k

have 2k in savings carry about 1k in checking, will have about 5-7k saved by the time my credit is ready.

have no collections nor do I owe anything (baddies paid off)

Should I save more? Also my income gets a commision boost and she is a hair stylist, so her income is more than 18k, just doesnt record tips.

I would like to get the house without needing her income for the loan (long proposal story), but if we end up going to the top of our budget I might need her to.

First time paranoid homebuyer. if you need additional info let me know i will update, just not sure what is needed.

[jules0580]

What are your other debts?  and is your commision guaranteed. I think they look at the last two years commision and use an average or maybe the lower of the two? The USDA DTI ratio is 29/41 meaning your mortgage cant be more than 29% of your income and your total debts cant be more than 41% (but they do make exceptions) so if you have car payments student loans etc., you would have to figure out what your monthly DTI is.

[jcstarkey8826]

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@jules0580 wrote:

What are your other debts?  and is your commision guaranteed. I think they look at the last two years commision and use an average or maybe the lower of the two? The USDA DTI ratio is 29/41 meaning your mortgage cant be more than 29% of your income and your total debts cant be more than 41% (but they do make exceptions) so if you have car payments student loans etc., you would have to figure out what your monthly DTI is.

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sorry, I cant believe I forgot that. My DTI is 2% ($60 student loan payment). Hers is 6% ($120 student loan payment). No car payments or other loans, credit cards paid in full.

My commision isnt guaranteed, its just sales based, and I havent worked at this job for 2 years so ill just use my salary of 30k and she hasnt either so we will stick with her hourly pay.

[rckstrscott]

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@jcstarkey8826 wrote:

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@jules0580 wrote:

What are your other debts?  and is your commision guaranteed. I think they look at the last two years commision and use an average or maybe the lower of the two? The USDA DTI ratio is 29/41 meaning your mortgage cant be more than 29% of your income and your total debts cant be more than 41% (but they do make exceptions) so if you have car payments student loans etc., you would have to figure out what your monthly DTI is.

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sorry, I cant believe I forgot that. My DTI is 2% ($60 student loan payment). Hers is 6% ($120 student loan payment). No car payments or other loans, credit cards paid in full.

My commision isnt guaranteed, its just sales based, and I havent worked at this job for 2 years so ill just use my salary of 30k and she hasnt either so we will stick with her hourly pay.

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don't most lenders require a two year job history to qualify? Mine did..

-scott

[jules0580]

Are you wanting to go USDA direct or guaranteed. I dont know much about Direct but for guaranteed, have you been atleast in the same field for 2 years, I believe thats a requirement? But they will do a waiver if you graduated college and went into your feield.  If you use your base income 30k, then the highest mortgage amount you could get (including tax, interest and insurance) would be 725 a month for you or 1160 together.  that would be 29%.  You will be fine for the 41% back end with just those student loans.  Also you have to figure out the taxes in your area, depending on the house and your area the taxes can take up a huge portion of your mortgage. For mine its almost $400 a month. so in your desired price range you may want to include your girlfriend on the loan.

[jules0580]

Yes the 2 year job history is a requirement for USDA Guaranteed, Im not sure about direct, but I have heard they make exceptions if its a recent college grad that has been in the job since shortly after graduation.

[jcstarkey8826]

Well, I will look into the differences of direct and guaranteed. I dont know what they are, but I just moved to Michigan and have been at my job for only 6-9 months come mortgage time.

Ive been in the same field for 5+ years though and only moved here for my GF to be closer to her family. This would really be a bummer if I have to wait a year and a half to buy a house. I didnt know about that.

And thats why I ask these questions.

Anyone out there get a USDA without 2 years at current job? Like I said, Ive been in banking for 5+ years, last bank i was with for 4+ years from teller, to teller supervisor. to asst. manager, then moved here to my current position of Financial Consultant, only the bank I worked for wasnt in this state.

now im nervous!!!

[jules0580]

If you have been in the same field for more than 2 years they can make an exception on that as well. So you should be ok.  But say you were in car sales previously and now in banking, then they dont consider that continuous.

[jules0580]

Also when you moved, did you go right from one job to the other, or did you have a time where you moved and then looked for work. I think if you went right from one to the other you should be ok.

[jcstarkey8826]

UPDATE:

Well, just got off the phone with a lender, and apparently USDA and FHA require 3 tradelines for 12 months no lates. I only have 3 tradelines period. My third is only 6 months old, so now I have to wait 6 months for that requirement. Im a little bummed out now