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USDA Loan

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Anonymous
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USDA Loan

I was pre-qualified last month for 160,000. Im a single parent with one child, so its just me.

 

I have seen a few houses I would like to look at, but there's also others between 170-180 I'd love to think about. Of course the bank looks at DTI, so I have several questions, being my first try at a home, its tough.

 

Will the bank go over DTI by 10,000-20,000?

 

If they won't, I have 5 cards that carry balances. I use them all regularly. Amex for groceries, BBVA for walmart or other retail items, BoA for Gas, and PPMC is currently carrying because I utilized the hell out of the 4% CB on everything, and Discover for the 5% bonus months.

 

If I eliminate balances on all but one card, would this help get me that extra 20,000? 

 

 

4 REPLIES 4
Anonymous
Not applicable

Re: USDA Loan

Each card has a minimum payment due that increases your DTI, so having less payments due and smaller balances could lower your DTI.

 

Search up AZEO if you don't know it. Let a very small balance report on just one card to maximize the scoring and DTI benefits.

 

Are you carrying balances over past the due date? That basically negates the rewards from your cards, and you'd be better off getting a low APR credit union card in the future.

Message 2 of 5
Anonymous
Not applicable

Re: USDA Loan


@Anonymous wrote:

Each card has a minimum payment due that increases your DTI, so having less payments due and smaller balances could lower your DTI.

 

Search up AZEO if you don't know it. Let a very small balance report on just one card to maximize the scoring and DTI benefits.

 

Are you carrying balances over past the due date? That basically negates the rewards from your cards, and you'd be better off getting a low APR credit union card in the future.


I am carrying balances across due date. All the promotional APRs end next month on all but the PPMC and BoA card.

 

Right now, Discover has a 15mo APR free BT offer. But if I transfer the balances, it will raise my utilization on that card to 50% and lower the rest to 0.

 

Since I'm working with a credit union, I most likely will move away from my relationship with BoA and open an account directly through them. So I would move forward with that soon enough. BoA hasn't been kind to me with anything credit related after 15 years of being a customer.

 

Would me raising my utilization to 50% on that one card help or make it worse? I would still have a 5% utilization across the board. I would eliminate $110 worth of payments doing the BT.

Message 3 of 5
NC_Mtg_Loaner
Valued Contributor

Re: USDA Loan

Let's say interest rates are 4.0% fixed for 30 years with USDA.....it's likely you would see lower, but that's not a bad rate if that's what you were quoted.

 

Every $40 in credit card payments you need to make each month that  you could eliminate would allow you to increase your buying power by $10,000 for a home. 

 

So if you have 4 cards that have minimum payments of $30/ month and you can pay them down to $0 and leave them there long enough for this to be reflected in a new credit report issued by a lender for pre-approval/purchasing, then it's more than likely you'd be in good shape for the higher price limit. 

__________________________________________________

Licensed NC Mortgage Loan Originator
Message 4 of 5
Anonymous
Not applicable

Re: USDA Loan


@NC_Mtg_Loaner wrote:

Let's say interest rates are 4.0% fixed for 30 years with USDA.....it's likely you would see lower, but that's not a bad rate if that's what you were quoted.

 

Every $40 in credit card payments you need to make each month that  you could eliminate would allow you to increase your buying power by $10,000 for a home. 

 

So if you have 4 cards that have minimum payments of $30/ month and you can pay them down to $0 and leave them there long enough for this to be reflected in a new credit report issued by a lender for pre-approval/purchasing, then it's more than likely you'd be in good shape for the higher price limit. 


Thanks,  exactly what I was hoping to hear. 

 

Message 5 of 5
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