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Can closing costs be rolled into mortgage for USDA loans?

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Valued Member

Can closing costs be rolled into mortgage for USDA loans?

I have been approved for a $240k USDA guarantee loan through a mortgage broker.  I would be very appreciative if somebody could let me know how much money I can expect to have to put out up front (i.e., out of pocket). 

 

I am putting in a bid tomorrow for $240k and will give a $1000 good faith deposit.  I know about home inspection and appraisal but i have been reading the forum posts about usda loans and there is a lot of fees/costs I did not know about.  Basically, can those closing costs be rolled into the mortgage payment and how much money up front/out of pocket can I expect to have to come up with. 

 

Thanks in advance, I'm really starting to freak out after reading all those posts Smiley Sad

Message 1 of 11
10 REPLIES 10
New Contributor

Re: Can closing costs be rolled into mortgage for USDA loans?

Are you got approved up to 240K ? Is that the top of the USDA purchase limit? What if your appriasal will come back 250K?

 

We are about to buy a house for 190K, we have put down $1500, closing cost paid by builder, $2000 pre-paid rolled into loan. Scheduled to close 08/31 and expecting to get money back at closing.

 

Laz

 

 

Message Edited by Laz on 08-19-2009 05:39 PM
Message 2 of 11
Senior Contributor

Re: Can closing costs be rolled into mortgage for USDA loans?

is 240K your max approval.

 

If so, you should probably not be putting offers in at 240K for a couple reasons

 

Offers are almost always negotiations so if you atart out at 240K they will likely counteroffer (unless you are offering full list)

 

Anytime you are bidding at your maximum price it will make getting final approval/UW tougher.  Not impossible, but the UW never likes to see ratios maxed out or people "using" all available credit.

 

If you were approved for more than 240K though ignore this.

Message 3 of 11
Valued Member

Re: Can closing costs be rolled into mortgage for USDA loans?

Is there a limit on USDA loan amounts?  I got approved with an FHA loan for 240k then I applied for a USDA through the same lender and she said I'm approved for 240k with USDA as well.  The house is already built.

 

I'm sorry to sound so un-informed but what is "pre-paid"? 

 

The house hasn't been appraised yet, should i make a bid before its appraised or is that a stupid thing to do??

Message 4 of 11
Regular Contributor

Re: Can closing costs be rolled into mortgage for USDA loans?

Closing cost can be rolled in. And if you make an offer lets say for 230 and the appraisal comes in at 215 they will not approve the loan because it's value is under the offer. The seller would then have to adjust the price if they still want to make a deal. No one will give the seller the former asking price of 240 because of the depreciated value they will be forced to adjust the price.
Message 5 of 11
Valued Member

Re: Can closing costs be rolled into mortgage for USDA loans?

Thanks everybody for the resposes, I really appreciate it. 

Knowing the closing costs can be rolled into the loan is a relief. 

 

I was approved for 240k but was told that could go up to 245-250 if needed.  Maybe I should bid 235k?  The seller is asking 269k and I did not want to offend with a bid that was too low.  Hopefully 235k is not too low of an initial offer for a home listed at 269,000.

Message 6 of 11
Highlighted
Super Contributor

Re: Can closing costs be rolled into mortgage for USDA loans?


@lien0569 wrote:

Thanks everybody for the resposes, I really appreciate it. 

Knowing the closing costs can be rolled into the loan is a relief. 

 

 


there is a limit.... but some can be rolled in

 

Retired Lender
Message 7 of 11
Established Contributor

Re: Can closing costs be rolled into mortgage for USDA loans?

Once you have a property in mind, your lender can tell you to the penny exactly how much you'll need at closing of your own money. You should get this closing cost number from the lender prior to putting in offers on any homes. That way you'll know if you need to ask the sellers to pay a portion of the closing costs (usually results in paying a higher list price for the home).

 

And a word of caution, you should not be trusting your lender to approve you for an amount you can afford. They do not take all of your obilgations/payments into consideration (like cable, internet, or cell phone for example) or your lifestyle (restaurants, entertainment). Has your lender told you what a monthly mortgage will be at $240k? They should give you that number as well when you find a property you're considering offering on (it will vary by property because of taxes).

Message 8 of 11
Valued Contributor

Re: Can closing costs be rolled into mortgage for USDA loans?

You really need to make sure you are comfortable with your payment. If your payments for a 240K mortgage fits, then I would keep it at about 230-235K to make sure there is enough room to roll in the closing costs.

 

We paid about 1200 out of pocket on a USDA loan and our house was 102K


Kathy


We are finally homeowners!!

Closed May 5th-30 yr fixed at 5.25%.

Message 9 of 11
Valued Member

Re: Can closing costs be rolled into mortgage for USDA loans?

Well, I made an offer of 240k.  I already left a message for my lender to let me know what kind of mortgage payment I can expect from this house.  I've got a pretty good idea, but you never know.  Thanks everyone!
Message 10 of 11
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