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With my situation should i go FHA or USDA?

I make about 25k, my dad (who will be living with me) makes 37k my girlfriend makes 17k and her son (16) and my mother will be living with us and my credit score is 657 (that's the middle score or whatever its called) i have no delinquent accounts, no bad marks on my credit (2 medical bills). i talked to a lender yesterday and  with my situation i could get pre-qualified for up to 90k with an fha loan and need to come up with about 5500 for closing. She did not seemed that interested in talking about USDA loans because she said "all the stipulations" but it think that it may still be my best route and i think i know of most of the stipulations and 5500 is a lot of money to come up with and if i could get the USDA loan i dont have to pay that or PMI. The counties i am looking to buy in i have already checked my eligibility in and we fit within the guidelines. I just want to do what would be best for myself, she said at 90k my monthly payment would be around $650 and i know that it would be much less without PMI so any info would help!
  • August 14 2010 - Canton
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Answers (10)

USDA is the way to go if you and the property qualify.  No monthly MI, no down payment, with the same 30yr rate as FHA??  There is no down side. 

More than likely your loan officer is new and has never done a USDA/Rural Development loan.  USDA loans are no harder to process than a FHA loan and with Ohio USDA currently clearing files from November 10th.  A 30 close time is certainly possible.

Hope this helps.

Paul
  • November 17 2010
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No brainer! - go with a USDA if you qualify. 

I would be willing to bet your lender is pushing you FHA because they have no clue how to originate a USDA loan. Just a hunch from a mortgage vet with 20+ years experience... Anyone else agree?

Monthly payment with monthly mortgage insurance (FHA) or without (USDA)  or in other words, would you rather pay more every month to your lender?  --- c'mon now..... find yourself a knowledgable lender.....
  • November 16 2010
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As long as you meet the income guidelines and the property is eligible, you should definitely look at a rural development loan.  There is no downpayment required, no pmi and the seller can contribute towards your closing costs.  When you are ready please give me a call.  I am more than happy to be of service
  • November 16 2010
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POOL PARTY AT SIDDIS"S HOUSE!!!!!
  • August 17 2010
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Profile picture for Justin Kennedy
@ Paul. USDA does insure property with in-ground, you need to request a wavier and appraiser to give zero value to pool.
@Sidis. Make sure your USDA lender takes in consideration all the income of the household. This may place you outside the annual income limit of USDA. If USDA works, go that direction. Save your money for a rainy day.
  • August 16 2010
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Make sure you know your numbers.  USDA is a great program but there are stipulations.  The value of the land can only be a certain % of the value etc.  Make sure you keep that in mind.  It does sound like you need to get another loan officer.  You can also get most sellers to pay your closing costs with a decent offer.  Not your down payment though.
  • August 16 2010
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Ryan, Steve and Lane are 100% correct.  USDA all the way.  The interest rate will be the same(don't let them tell you any different) and you will not have to pay monthly mortgage insurance(saves you $49.50 on a $90,000 loan).

Total random FYI: USDA doesn't lend on homes with a inground pool.

Hope this helps.

Paul
  • August 16 2010
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It's a no brainier, USDA. USDA loans take the same amount of work as an FHA maybe a little bit more. A lender that's looking out for you will do what takes to make that happen. I hope it works out for you.
  • August 14 2010
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USDA's RD loan is no more complicated than FHA, and will save you money. 

It's time to talk with another lender.
  • August 14 2010
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I'd go with the USDA, sounds like you already have your mind made up.
  • August 14 2010
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