01-29-2013 12:56 PM
Hoping to buy a house this year. Neither hubby or I know much about the process, just what i learn on here and other similar sites. Which is alot of info at an alarming rate!!! LOL . Someone suggested a USDA guaranteed loan as an option for us. No money down approvals in the 620-640 range. Myfico score is 636 for hubby. Mine is 584 but I have just added a cc and I don't work anyway so don't anticipate being on the loan.....could be wrong??? Anyway the question is....What is a USDA guaranteed loan? I know they guarantee the loan if it defaults, BUT do we also have to go through approval processes with lenders as well as the USDA process...does the usda process itself approve us for a mortgage? What out of pocket costs are involved? downpayment? appraisals, inspections? are they stricter or more lacking in the USDA process? Sorry for so many questions....and thanks in advance for the replies!
01-29-2013 04:47 PM
01-29-2013 05:33 PM
There are two different types of USDA loans... You can do a search on boards about the differences.
The area you are looking at homes in has to be an approved area, which you can find on their site of the areas. Your income has max values you are allowed which you can also find on their site.
All loans have advantages and disadvantages according to each individual.
In your peticular case I couldnt tell you what the advantages are as I do not know all your circumstances. The biggest thing that stands out from the limited information is you wont qualify for a conventional loan, and if you did your scores as low as they are your rates would be substantially higher. Comparing to FHA you wont have the UPMIP and the monthly MIP that you must pay for at least 5 years and possibly longer until your home is at a 78%LTV. Also with FHA you have to pay 3.5% minimum down payment. USDA does have MI but it is a much smaller number compared to FHA.
What the general advantage is, will accept lower scores, rates are competitive, minimal to no down payment needed, and MI is much cheaper compared to FHA.
01-29-2013 07:00 PM
Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.
IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more
FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.