are we prepared?

[jcstarkey8826]

So my gf and I are buying a house. She wants to do so ASAP, as buying the house is cheaper per month than we currently pay. We spend over $600 a month in gas because our work is so far away from our current residence. We have about 3k saved so far, and she seems to think that we should look at USDA loan with 0 down on a short sale property and finance the closing costs.

I get nervous about rushing this process. Short sale is fine with us because we are not bound by any lease agreement, but I dont know if 3k is enough, although I understand that we can save much more per month once we own the house, I dont want to rush into something as important as home ownership.

My question is, how much is a decent amount to have saved for a USDA short sale, not paying for closing costs. This is our first time, and I dont want to be unprepared.

[JM-AM]

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@jcstarkey8826 wrote:

So my gf and I are buying a house. She wants to do so ASAP, as buying the house is cheaper per month than we currently pay. We spend over $600 a month in gas because our work is so far away from our current residence. We have about 3k saved so far, and she seems to think that we should look at USDA loan with 0 down on a short sale property and finance the closing costs.

I get nervous about rushing this process. Short sale is fine with us because we are not bound by any lease agreement, but I dont know if 3k is enough, although I understand that we can save much more per month once we own the house, I dont want to rush into something as important as home ownership.

My question is, how much is a decent amount to have saved for a USDA short sale, not paying for closing costs. This is our first time, and I dont want to be unprepared.

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Short sale loans could be excellent deals. The process to purchase short sale loans is not always very quick. My advice is to make sure you deal with some one who knows short sale loans and the correct process, as it will definitly help the process.

As far as how much money you have saved and whether or not it would be sufficient is not just a cut and dry answer. There are different factors to determine what would be sufficient amount of funds. Since you are looking at a USDA loan program (no mention of which one) I would take the time and sit with a USDA LO and discuss your situation, then let them advise you on what they feel are your best options and if any funds would be needed according to your peticular situation. You would need to have your approximate credit scores (unless you want them to run your scores), your total income between any one who is applying for the loan as just a few pieces of information for the LO to give you an idea. This general information will also give them an idea on how much they feel you may qualify for, if the location you are looking at qualifies for USDA housing, and if you fall in the guide lines of maximum income allowed to qualify.

The information the LO gives you will still be all dependent on if you still qualify for a loan when you apply.

[jcstarkey8826]

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@JM-AM wrote:

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@jcstarkey8826 wrote:

So my gf and I are buying a house. She wants to do so ASAP, as buying the house is cheaper per month than we currently pay. We spend over $600 a month in gas because our work is so far away from our current residence. We have about 3k saved so far, and she seems to think that we should look at USDA loan with 0 down on a short sale property and finance the closing costs.

I get nervous about rushing this process. Short sale is fine with us because we are not bound by any lease agreement, but I dont know if 3k is enough, although I understand that we can save much more per month once we own the house, I dont want to rush into something as important as home ownership.

My question is, how much is a decent amount to have saved for a USDA short sale, not paying for closing costs. This is our first time, and I dont want to be unprepared.

---

Short sale loans could be excellent deals. The process to purchase short sale loans is not always very quick. My advice is to make sure you deal with some one who knows short sale loans and the correct process, as it will definitly help the process.

As far as how much money you have saved and whether or not it would be sufficient is not just a cut and dry answer. There are different factors to determine what would be sufficient amount of funds. Since you are looking at a USDA loan program (no mention of which one) I would take the time and sit with a USDA LO and discuss your situation, then let them advise you on what they feel are your best options and if any funds would be needed according to your peticular situation. You would need to have your approximate credit scores (unless you want them to run your scores), your total income between any one who is applying for the loan as just a few pieces of information for the LO to give you an idea. This general information will also give them an idea on how much they feel you may qualify for, if the location you are looking at qualifies for USDA housing, and if you fall in the guide lines of maximum income allowed to qualify.

The information the LO gives you will still be all dependent on if you still qualify for a loan when you apply.

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With barely hitting the score requirement, would it be best to go to a banks LO, or a broker? I dont know the difference, and no one in my family has ever bought a home other than my grandmother (63 years ago) so I dont really have anyone to turn to for advice.

What is the difference in a broker and LO? Which one will work harder for my situation or be more cost effective?

[JM-AM]

Everyone has a different opinion on which way to go. My preference would be to use a broker as they have other avenues to explore to get you approved. If you use an LO you are limited to their set of qualifying standards, either you qualify or you don't qualify.

The type of loan you are seeking USDA would be best to find some one who knows and is qualified to do USDA loans. Same for any real estate agent you would use, make sure they know and are qualified to do USDA loans. They can advise you on which loan program USDA offers would be best in your situation with the least out of pocket money you would need. USDA does offer no down payment loans.

As long as you keep your options open and use a qualified broker, a good broker will give you advice on any program that would be best for you. Ultimately it is still you who decides which type of loan you want to apply for. 

[jcstarkey8826]

thank you! from what I researched online, it seemed like the broker was more fitting, but I didnt know if they had any type of cons that might keep it from suiting me.

I will research a broker in my are and see if I can find someone that deals with USDA, same for realtor.

Thanks for your help!

[FrugalRican]

Go with the mortgage broker.

And btw, be prepared to face the reality that you can't base what you will pay on the upfront cost of "mortgage payment vs rent payment".

Just letting you know in case that is what your girlfriend is basing her "savings" from. There's much more to it than that and I hope the two of you have considered that as well.

[jcstarkey8826]

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@FrugalRican wrote:

Go with the mortgage broker.

And btw, be prepared to face the reality that you can't base what you will pay on the upfront cost of "mortgage payment vs rent payment".

Just letting you know in case that is what your girlfriend is basing her "savings" from. There's much more to it than that and I hope the two of you have considered that as well.

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We just factored in our price range at 5% for thirty year fixed plus taxes and an extra $200 per month for maintenance, another $300 for utilities, then the amount of gas we will be spending.

after that we did the same for the apt and being that our rent and util are $1000 a month and gas $600, we should be saving btw 500-700 per month easily, but there is always the unexpected.

If we cant afford it now, I dont know if we ever will haha we both have very low DTI. literally... 2% and 4%, just small student loans, and annual gross income is 70k. We are just looking for a short sale around 100-120k, but because we live in Michigan, that is enough for a very nice home

wish me luck! calling broker today after work