USDA loans

[Anonymous]

We are currently trying to get a mortgage we are first time home buyers we are using my fiances credit that has two black marks and 3 good accounts so nothing too substantial the LO told us to pay off the neg accounts and get our balances down below 30% on our cards and he can help us. What are the odds of this really working out? We have already paid off the two blemishes (it wasnt much) and by next week should have our cc's paid down substantially. My fiance has a decent income he made approx 65k last year. We dont want to spend much, we want to be modest we found a house we are in love with in a usda eligible area for 222k. Does anyone have tips on how we can expedit this faster? Should I shop around and try different USDA lenders? This gentlemen I spoke with was the first LO we spoke with? Any pointers are greatly appreciated. Also his DTI ratio is good he has no other substantial debts.

[songsofexperience]

You may want to provide more info. See the thread at the top by Shane titled "Do I Qualify for a mortgage. Info that is needed." It details all the info you should provide so people can best answer you.

Also, keep in mind that for you, 222k might be modest and "not much," but for many, it's expensive and out of reach. It's fine to state the price range you're looking in, but you may want to avoid tying statements like that to it. You want people to help you, not feel alienated.

[Anonymous]

I definitely don't want anyone to feel alienated its actually technically not modest for us.. it's a hefty mortgage lol ..I meant in the market where we live. We are coming out of NYC and into NJ its actually at the higher end of our expected budget I would prefer a less expensive house but they are hard to find where we live. thank you for your advice!

[ShanetheMortgageMan]

It's fine (and encouraged) to speak to more than 1 loan officer.  Even if you want to stick with the first one, the other LO's may just reinforce the information you've already been told.

The odds of it really working out are tough to say since you only mentioned a sales price of $222k and $65k/year of income.  Didn't mention scores, what the negative marks are, how much money you've saved up, etc.  NJ property taxes can be a bit expensive, so if taxes are $4,400/year on this home then $65k/year of income would put your housing ratio at about 29-30%, which can get approved for USDA financing but it's at the upper end of the limit.

Did your LO ask about your income?  As there is the USDA income eligibility limit considers all income from everyone living in the home, whether they are on the mortgage or not, or married/family to the person being on the mortgage or not.

[Anonymous]

we only have once income in our household that is my fiances his score is at a 600 so we are aiming to raise it our lo suggested we pay down our debt about 1000 in order to decrease utilization and pay off the two blemishes on his credit report in order to satisfy them, which.we already did, they were accounts under $1000 in total from over 2 years ago. We have approx 10k saved but our LO suggested we use some of it to pay down our debt in order to have more favorable credit and since we are aiming for a usda loan we wouldn't need a down payment.

[Anonymous]

one*

[Anonymous]

im typing from my cell phone sorry if there are any errors

[songsofexperience]

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@Anonymous wrote:
I definitely don't want anyone to feel alienated its actually technically not modest for us.. it's a hefty mortgage lol ..I meant in the market where we live. We are coming out of NYC and into NJ its actually at the higher end of our expected budget I would prefer a less expensive house but they are hard to find where we live. thank you for your advice!

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Ah, I understand

I left the northeast in 2010 (a few years in NYC, a few in RI/MA) and am now in the south and home prices are definitely different! You'd get 4000sf and 5 acres for that where I live now! 

I'm sorry I misread what you were saying

[ShanetheMortgageMan]

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@Anonymous wrote:
we only have once income in our household that is my fiances his score is at a 600 so we are aiming to raise it our lo suggested we pay down our debt about 1000 in order to decrease utilization and pay off the two blemishes on his credit report in order to satisfy them, which.we already did, they were accounts under $1000 in total from over 2 years ago. We have approx 10k saved but our LO suggested we use some of it to pay down our debt in order to have more favorable credit and since we are aiming for a usda loan we wouldn't need a down payment.

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OK well your income should be fine for USDA's limit then.  USDA goes easier on you when you have a 640, so not sure if the loan officer mentioned that as a goal but if not then you should still work towards it anyway.  Good to have 2-3 times worth the new housing payment in reserves (money still available to you after you close) as that will help with underwriting (and not making life so stressful after you close).  After your credit improves and when it's been re-checked, ask your loan officer if you have GUS (Guaranteed Underwriting System) approval as if you do it'll make underwriting go easier on you, if you don't then you can still get approved but more documentation is asked for.