USDA Loan Cap

[K_J]

Hi everyone,

I need your help as usual, I went ahead and applied for a mortgage loan for a new built, and the builder told me I could use my own lender, but require verification of my qualification from their bank (Sun Trust). I called a Broker and was pre-approved for 412k for a USDA Guaranteed loan and with the added (Guarantee fee) mortgage Insurance the loan amount is about 420K.  Today, I called the builder's bank (Sun Trust) and they approved me for 410K and told me everything checked out. However, they want to know how they could earn my business. First they gave me 3K credit which could go towards closing cost and their fees are 650.00 dollars. The Broker’s fees came up to 1100.00.  My questions are:

1. 1.    What should I be looking for in terms of fees when comparing the two?
2. 2.     the Sun Trust LO mention that there is a cap on USDA guaranteed loans which means my loan could not exceed 417k with the guaranteed fees/mortgage Insurance added. Is this true?? Please feel free to help. Thank you all.

[tooleman694]

I know of no cap, you just can not go above income limits

I'd compare both loans and take the cheaper one.

[jules0580]

I do believe that there is a cap, but what I would be more conserned with is what your monthly payment would be on one vs the other.. How much are you putting down, if you are not putting down 20% (which Im assuming you are not because you want to do USDA and not conventional) then I would say that USDA may be better, main reason being that you dont have such high PMI on USDA.. The PMI on FHA and or conventional (with less then 20% ) could be quite high and can make a difference of several hundred dollars monthly. Thats what I would ask about.