pplying for usda guaranteed loan tomorrow

[Anonymous]

Hello, I am applying for a guaranteed usda loan tomorrow. I have found a house asking price $136k. I have $58k income. single, never married. in texas. hoping for no downpayment. seller to pay as much closing cost as possible. eq - 633 tu - 658 ex - 652 Each month I have 1 or 2 overdrafts on my checking account, but I do have overdraft protection. I pay overdraft fees each time. I live in a house my parents bought for me 10+ years ago, but not in my name. I have no rental or mortgage history for that time. ratios for this house would be 16/41 @ 5% Do you think I stand a chance? Should I wait or go ahead with app? If this house falls through, I think I would like to build a small 2 bd/2ba/2 car garage home. Can I do that with usda? I am think with water meter and septic the house my cost around $180k Thanks for any advice. You people rock on this forum. I have learned so much lurking aroung.

[ShanetheMortgageMan]

Having repeated overdrafts isn't a great sign to an underwriter, although it doesn't automatically mean you are denied, the reason will be examined along with the rest of your credit history - what is the reason you consistently have them?  What is on your credit that is bringing your scores down?

The Direct version of USDA is the only version I am aware of that does construction financing.  A year or two ago there was a poster talking about a USDA pilot program for construction lending with a few lenders participating, but it never grew much in popularity on a national level so I'm not sure if it was squashed or if the lenders who do it just don't advertise.

[Anonymous]

To be honest, I have just been lazy.  It hasn't been a big deal to pay the overdraft charges.

My scores are low because of high utilization on cc's. One late about two years ago.

Each month they climb as I pay off more. 

I also have a car pmt w/ 5 mos. and 2 installment loans w/ less than 6 mos. on each.  Hopefully, these will not be counted in diti.

Thanks for your comments.

[ShanetheMortgageMan]

With USDA I believe they only exclude payments if there are 8 or less left, and the payment is less than $100/mo.  Well, the reason for your NSF isn't a good one, still may be OK but it'll be up to the underwriter.