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I don't have any answers for you but you may be waiting on USDA anyways just because of the long process. Are you looking at USDA Guaranteed or Direct ? I think Guaranteed has higher income limits than the Direct Loan.
DO you have the 3.5% saved for an FHA LOan? Maybe you qualify for the 3% down Conventional loans from FNMA or Freddie Mac?
When it's all said and done, a mortgage loan is a loan to get you into a home and the APRs are going to be similar but I'd be shocked if one was > 1% better than the other.
So the morale to the story is to simply buy a home when you are ready~even if you have to shell out the Minimum Required Investment to obtain whatever loan product for which you qualify.
Hi OmgitsMatt,
When you say you're changing careers does that include a change in employers?
Do you have child care expenses?
How much of the 4K gross was OT & how much was straight time? If your combined straight time income is $78,000 per year you would need to add just your OT from the last 2 pay stubs to see if you're over the limit of $82,700.
If you have child care expenses, that money is deducted from gross annual household income. For example:
Let's say your household income is $85,000 with your OT included. Now let's say you have $4,000 in child care expenses.
$85,000 - $4,000 = $81,000 which puts you just under the limit.
As far as calculating the household income for the county income limits goes, the lender should take the current income (so when your income goes down due to job change) and calculate it moving forward so you would be fine.
As far as waiting to go USDA vs going FHA, it depends on your scenario & needs.
FHA has more flexibility with debt to income ratios & credit but USDA's mortgage insurance (MI) is cheaper. Using a loan amount of $250,000, the USDA MI is $104.17 less per month than FHA's MI.
FHA also doesn't have the location & income limit restrictions like USDA but FHA does have county loan limits.
Hello Matt,
I am in the process of getting all my ducks in a row so I can get pre-approved for a USDA guaranteed loan. I was iffy about my income exceeding the limit as well so I did some research and came across a handbook given to all USDA approved lenders.
https://www.rd.usda.gov/publications/regulations-guidelines/handbooks
It has a lot of great information that has left me feeling much more confident about this process. In short, however, the handbook details that for me particularly it isn't necessarily my net income that is considered but your AGI (adjusted gross income). I'm a self-employed contractor so they would be using an average of two years of tax returns for me.
In 2017 my net income was $84k but my AGI was $78k. In 2018 my net income was $78k and my AGI was $72k. This would average it for me to be about $75k counted towards repayable income per their guidelines in the handbook. Even without the AGI requirements I still would have fallen with the limit but it was looking so close that I was afraid something would go awry in the closing process.
I hope you find some useful tips that are specific to your situation in there. Good luck!