USDA Cover Cost Brainstorming!

[ladycopper]

We are in the process of a USDA Loan, we found our home and we made an offer and the owner accepted our offer of $150,000 plus he afred to cover 2.5% of closing cost now the problem is we really don't know how much we have to bring to the table and we're not sure we will have enough to cover the rest of the cover cost.

We feel we possibly can but not knowing the amount has us uneasy. We're hoping that the house will appraise for more so that we could roll the rest of the cost in the USDA including the 2% USDA Fee, but thats wishful thinking and really don't feel that it will appraise for more, so my question is:

Can anyone give us some advice on what other options we may have?

What other ways can we get this loan done?

If the house only appraises for $150,000 I know we can still add in the 2% USDA Fee so the LTV would be 102.4% but what else can we do to cover our cost?

I already paid $500 for the deposit and I'm paying $250 Tuesday for Inspection.

All advice and ideas are appreciated.

[Anonymous]

Your LO should be able to provide you with a rough estimate of what your closing costs will be. Assuming that your realtor worded the contract properly, then the seller agreed to pay 2.5% of the purchase price in closing costs (2.5% of $150,000), which would equate to him offering to pay $3750 of said closing costs.
Once again, if the contract was put in how it should've been, then you guys should be splitting the lawyers costs (at least that is how I have always seen it done), IE Lawyer costs $800, he pays $400 and you pay $400. From what I understand, that $400 that he pays CANNOT come out of the amount he agrees to pay towards closing. Also remember that your $500 deposit will be put towards your closing costs as well.

We closed on a USDA loan last September and carefully worded the contract to where the sellers were paying 6% of the closing. After all was said and done, we walked away from the closing table with our $500.00 back and we were able to use some of the left over money from closing to buy some points off of our interest rate and take it down to 4.2%.

I have talked with many appraisers over the last couple of years and all of them state that unless your getting an extraordianry deal on it , don't expect it to appraise for anything more than what the loan amount is for or less than the amount for that matter. Our house is worth over $230,000 according to Home Owners Insurance, but appraised for $160,000 ($1000 above the loan amount).

Good luck!

[youngguns996]

Good Advice, I'm waiting for the truth in lending doc. Thanks BMac!

[Anonymous]

This isn't adding any useful information but I do feel for you. Waiting is the hardest part. Hang in there though...it will be worth it once its all said and done and you have the keys to your new home in your hand. 

[BrianB_The_Loan_Professor]

If your debt to income will allow it you could take a higher rate and get a credit towards closing costs

B

[youngguns996]

Thanks 1_2, I appreciate it.

[youngguns996]

Thanks Brian, Good Advice, I will look into it and see if DTI and lender will allow. I think we are at around 39% right now. I don't think it would be beneficial to take a higher rate in the long run, but we may not have a choice.