My husband and I are getting ready to apply for a USDA loan. I have been self employed doing in home childcare since Jan 2014 but the income will not continue once we purchase a house in a rural area (we live urban now). If we apply only in his name, my debts (student loans) won't be included in the DTI ratio by my understanding. So - our plan is only him to apply.
His credit score is 603 right now and has been rising steadily since we declared Ch 7 Bankruptcy (discharged in May 2011). We home was given up in the bankruptcy (foreclosure).
We are looking at applying for a USDA loan in the late spring of 2015.
-----What does his credit score need to be to have a good chance at approval?
-----He has one 30 day late mark on his credit report June 2014 on a credit card payment - how big of an impact is this likely to have? Do we need to wait until the mark is over a year old?
-----He makes around $50k gross. Should he apply direct or through a lender?
----Bankruptcy dischared 5/2011. House was forclosed in bankruptcy was it wasnt "finalized" till November 2012 (a verrrry long year and a half for us). Do we need to wait until Nov. 2015 for the three year mark or is the house considered a part of the 2011 date?
The houses we are looking at are in the $80k-$110k range (about $700-900 per month mortgage with consideration for taxes, etc?) Debt in his name come late spring: Car loan $400 per month (I calculate this is under the 29/41 ratio) Savings for closing costs as of late spring: $6k
Between USDA Direct and Guarnateed (through bank), Direct is the cheaper and easier option as long as the property qualifies and you qualify based on your family size and income.
For Direct, you can qualify in less than 3 years after BK with a credit score of 640 or higher. If your husbands score is below 640, you will need to wait 3 years or until he can get his score above 640. A late payment shouldn't be a problem for USDA as long as it's only one 30-day within the past 12 months.