Hey this is USDA Loan Info again! In this blog post and like most of our blog we’re comparing conventional loans to FHA loans to VA loans to USDA Loans in McKeesport and finding out exactly which one’s the best one?
Which Loan Are We Talking about and is the USDA Loan in McKeesport right for you?
You know so many consumers are curious. Which type of Mortgage Lender in McKeesport provider loan is best for me?
Today I want to help you figure out which one is going to benefit you and your family the most, for you a short-term and/or long-term goals because it’s different for everybody.
Now there are advantages to each one of these USDA loans in McKeesport so some have lower interest rates, some have lower fees there’s all kinds of different things to think about!
Now most people have a tendency to just look at one thing. The payment! And if you’re going to be going for pre-qualification on USDA Loans in Pennsylvania and surrounding areas, we have to set the score straight.
Which is cheaper?
Well, it’s understandable when you’re buying a house you say, hey which which payment is cheaper?
But, again how long you gonna be in that house?
Is there PMI? Will the PMI disappear?
When will it disappear?
If the PMI is gonna disappear in five years butI’m gonna be here in 20 years, maybe this other loan is better a long term! So we have to look at these things as a whole. So now you can see why USDA Loans are appealing.
Now people ask you all the time what’s today’s interest rate?
It’s impossible to answer that question, because your finances and every person’s finances are as different as fingerprints!
When we look at the whole situation you have to understand that all these items, represent different risks to the lender and the higher the risk the higher the interest rate!
The lower the risk for example if you put a lot more money down, obviously a lower risk right?
Or if you have a higher FICO score lower risk, right?
Well we have to look at these things as a whole to help you determine what interest rate you’re gonna get and that also helps determine which program is right for you!
Okay now it’s time we’re gonna get into the nitty-gritty we’re gonna get into the comparison. Number one – conventional loan. A conventional loan has a minimum of a 620 FICO Score Credit score if you’re not sure what a FICO score is that is your mortgage credit score.
Now on an FHA loan vs USDA some lenders go as low as a 500 my company goes down to a 550 the truth is nobody gets approved at 500 anyway and on a VA loan we’re also looking at the same thing many lenders go to 500 company goes to 550.
PMI and Mortgage Insurance is Called MIP
Okay PMI mortgage insurance and on FHA in McKeesport it’s called MIP mortgage insurance premium now on a conventional loan,
What happens is it is very very dependent on what is your credit score somebody with a very high credit score might have a very low mortgage insurance payment, but if you have a 620 FICO score your mortgage insurance payment could be way high.
At least according to USDA Loan Credit Eligibility Guidelines.
Now on FHA: FHA has pretty much standardized, here is your MIP rate remember they’re the same thing they just call them something else here’s your MIP rate it doesn’t matter if you have a 620 a 580 a 550 or 800 FICO score makes no difference you’re gonna pay the same rate.
On a VA loan great news no PMI no MIP you got that one. Okay we’re almost halfway through the post so hit the subscribe button and hit the like button I appreciate that now if you’d like to comment, I will answer every single question personally and of course you’re welcome to share this with anybody you think it’s valuable for!
Mortgage USDA Loans and Debt Ratio
A debt ratio is the percentage of your gross. Gross income is before they take taxes out.
A percentage of your gross income to your debt. Now on a conventional loan with a high FICO score they’re gonna allow you or a 50% that includes your car payment, your credit cards, student loans, alimony, child support.
All those kind of things plus the new house payment, that should be no more than 50% now if you have a lowerFICO score, it’s probably gonna be 45% that’s how conventional works.
Now let’s take a look at FHA with a 580 FICO score or above, here’s what’s basically going to happen. You’re gonna probably be approved to a 56. 99%let’s call it 57%, again that includes all your debts plus the house payment as a payment.
Lastly we have a VA loan. Now a VA loan works very very different it looks at how much money is left over after paying all this stuff.
Zero-Down Home Buying with a USDA Loan in Pennsylvania
And it’s called residual income and everybody depending on what area of the country you live in and how many people in your family there’s a certain formula for it.
Now if you have 20% more than that just to give you an example if it was a thousand dollars but you have 20% more $1200 and a high FICO score you may even go up to 60 or 65% debt ratio which is unbelievable and its highest in the whole industry.
Interest rate on a conventional loan you’re often going to hear Fannie Mae, Freddie Mac those are conventional loans. On a conventional loan you are gonna have a higher interest rate than either FHA or VA.
On an FHA loan it’s lower than conventional and right about the same as VA they have virtually the same interest rates.
Working With the Right Lender | Total Mortgage Minute
Down payment on a conventional loan you’re usually looking at a 3% down payment. People ask me about a conventional loan Fannie Mae Freddie Mac yes those are conventional loans.
Now if we look at anFHA loan an FHA loan is gonna require a three and a half percent down payment as long as your FICO score is 580 or above. If it’s 579 or below it requires a 10%down payment and of course for our veterans who honorably served, we thank you!
You get a zero percent down payment loan. Okay so we talked about PMI, MIP mortgage insurance whatever you want to call it. But there’s also something called upfront mortgage insurance.
Now on a conventional loan there is no up front mortgage insurance, but those of you with a high FICO score might want to pay some, and they eliminate the monthly PMI payments forever.
So that’s a big deal and that’s only available on a conventional loan and it doesn’t make sense unless you have a really good FICO score. On an FHA loan we take the loan amount and multiply it by 1. 75 percent we have to add that to the loan amount.Hi, I'm Carl with Home. Loans and I'm farming peppermint out of a mug. I bet you're wondering,what is a USDA home loan? Designed with the residentsof more rural areas in mind, the United States Departmentof Agriculture designed its loan program toenrich rural communities by providing affordable home loan options to low-income householdsthat may not be able to secure home financingthrough other means. Who has time to stop and smell the roses? You don't, and this isn't even a rose. For more quick tips likethe one you just watched, visit Home. Loans, no. Com or. Net, and you don't even need the w's. It's simply Home. Loans. Search smarter, learnfaster, visit Home. Loans.
Simple example – if you have a hundred thousand dollar loan 1. 75 percent is $1,750, we’re gonna add that, so you’d actually be borrowing $101,750 upfront mortgage insurance.
Now though lastly if you’re a veteran who happens to be disabled 10 percent or more there is no up front mortgage fee that there is no VA funding fee it doesn’t exist for you.
Okay seasoning from bankruptcy many Americans through the last few years they’ve had a hard time and they did file a bankruptcy on a conventional loan 4 years must have elapsed from the discharge not from when you started but from when it was finished before you’re allowed to apply for a conventional loan.
On an FHA loan it’s only two years and on a VA loan it’s only two years. Short sale seasoning.
Well a lot of people ask what’s a short sale?
Well at a time when people owed more than the house was worth, they often went to the bank and said, hey my house is worth three hundred I owe four hundred and the bank accepted three hundred thousand dollars.
That was called a short sale.
Well if you have a conventional loan if you want to apply for a conventional loan it would be four years after a short sale.
For an FHA loan it’s three years must have elapsed from the time of the short sale and for a VA loan it’s only two years.
Again Vets win, they earned.
A foreclosure well yes some people went into really hard times on a conventional loan we are looking at seven years before you can buy a home againOn an FHA loan it’s only three years and For the vets – two years from a foreclosure okay Time back to work after an extended absence.
Well on a conventional loan there is actually no real time frame but the lender will take a look they just want to make sure it’s reasonable and everything is considered as a make sense situation you can be back to work for one month after or six months or a year off.
On an FHA loan FHA guidelines require six months back to work with pay stubs proof they’ve been back to work for six months before they’ll accept that income.
On a VA loan it varies per lender some lenders will accept right back to work some might want six months or three months a lot of them will require just get past the probationary period on the job and you’re good to go.
Occupancy on a conventional loan you can buy for a rental, you can buy for a second home if maybe you want to live in the mountains or down by the beach on the weekends or obviously for an owner-occupied property.
For a FHA and VA loan it is owner occupied.
Only. Hopefully this blog post will help you need a decision making process which loan is right for you! We have a post on USDA Loans in Pennsylvania coming up next – stop by and see if you can’t Pre-Qualify!
Confused about USDA Loans in McKeesport? USDA Loan Info & Friends Has the Answer:If the elevator tries to bring you down, gocrazy. Punch a higher floor. This is Dan on your inside team at Growella. It's Monday, July 9, 2018. Get ready. It's today's The Mortgage Minute-and-a-Half. People be like put me in work work work workwork work. And employers obliged. Friday, on the ninth anniversary of the endof last decade's recession, the Bureau of Labor Statistics reports that two-hundredthirteen thousand people entered the U. S. workforce last month and that's a positivesignal even though not everyone re-entering the force has found an actual job. Just the act of looking for jobs suggestsconfidence among U. S. workers, and confidence leads to consumption which drives the domesticeconomy forward. The jobs report also showed U. S. worker hourlywage growth to be on the downswing, a data point which gave mortgage rates a quick Fridayreprieve. Slowing wages reduce the pressure of economicinflation and when the pressures of inflation drop, mortgage rates often do, too. So, take a look at today's live rates andget yourself a quote. Rates are holding near the lowest in six weeks. Today's mortgage rates are in the dirt dirtdirt dirt dirt dirt. Interest rates for FHA loans, VA loans, conforming,USDA, and jumbo -- everything's up to kick off the week. The rates you get from a lender are customizedand more than a dozen factors go into your quote. Whether you go fixed or ARM, full fee or zerocost, even your choice of lenders affects the rate you get so talk to two or more lendersand find your preferred combination of rates, fees, and service. No matter how far you push the envelope, it'llstill be stationary. And no matter how matter how many times youhear you need twenty percent down to buy a home, it's still going to be not true. You don't need twenty percent down to buya home. And that fact makes a data point from EllieMae a little more concerning. The mortgage software firm asked more thanthree thousand renters: "What's stopping you from buying a home" and the overwhelming answerwas "I haven't saved enough for a down payment". Of all things, saving for a down payment shouldnot be the thing that stops you from buying. After all, there are seven government-backedmortgage programs that let you make down payments of less than five percent -- some don't evenrequire a down payment at all. HomeReady, HomePossible, HomePath, FHA loans,USDA loans, VA loan, Conventional 97. Then, there are local government programsthat give money to buyers for buying in particular areas. Forgivable money. And it's there, if you want it. So, don't get hung up on the twenty percentdown thing if you want to buy a place. Lenders don't care so much what you put down. They just want to know you can make your monthlypayments. So, talk to a lender and find out what's possible. You can't know until you ask. Growella does timely and relevant mortgagenews three times weekly and you can visit the site at Growella dot com for more excellentmortgage and real estate news. Go on and click the like button. What's blue and not heavy at all. Light blue.
How to Qualify fo USDA and Home Loans | Requirements 2019The USDA loan, also known as the USDA Rural Housing Loan Program is a 30 year fixed rate mortgage that is created for low to moderate income home buyers. The house must be located in an USDA eligible area of Pennsylvania. The USDA mortgage loan does not require a down payment (100% financing plus the guarantee fee). The USDA home loan is a zero down mortgage program. Home buyers must meet the income limits for PA (see below). You can estimate the USDA loan amount and mortgage payment with the USDA calculator. The loan is "insured" by the United States Department of Agriculture. USDA Income Limits for Pennsylvania The income limits vary by the Pennsylvania and the metropolitan statistical area (MSA) and household size: The 2018 - 2019 Pennsylvania base USDA income limits are: 1-4 member household: $82,700 5-8 member household: $109,150 There are county exceptions for higher incomes. See USDA income limits Annual income includes all eligible (gross) income from all adult household members, not just parties to the mortgage. The household income may be adjusted downward due to: Care of Household Members with Disabilities Child Care Expenses Dependents Elderly Household Medical Expenses The USDA provides extensive information on income determination in Chapter 9 of the SFH Guaranteed Loan Program Technical Handbook USDA Loans and Credit Score and Credit History For manually underwritten loans, the USDA requires a 640 "middle" credit score, although, there are exceptions: Credit score less than 640 According to the USDA underwriting guidelines, underwriters (that's the approval person), must perform a cautious level of underwriting. A detailed review of all aspects of the applicant's credit history should be examined to establish the applicant's willingness to repay and ability to manage obligations as agreed. Unless there are extenuating circumstances documented in accordance with this Chapter 10, a credit score in this range is generally viewed as a strong indication that the applicant does not have an acceptable credit reputation. Little or no credit history: The lack of credit history on the credit report may be mitigated if the applicant can document a willingness to pay recurring debts through other acceptable means such as third party verifications or canceled checks. Due to impartiality issues, third party verifications from relatives of household members are not permissible. Lenders can develop a Non-Traditional Credit Report for applicants who do not have a credit score in accordance with Paragraph 10.6 of this Chapter Indicators of unacceptable credit The following indicators require documentation meeting the criteria of Section 10.8 to approve an applicant's loan request for manually underwritten loans: • Foreclosure within 3 years: Including pre-foreclosure activity, such as a pre-foreclosure sale or short sale in the previous 3 years (refer to Attachment 10-B for additional guidance); • Bankruptcy within 3 years: • Chapter 7 bankruptcy discharged in the previous 3 years; • An elapsed period of less than 3 years, but not less than 12 months, may be acceptable if the applicant meets the criteria of Section 10.8 of this Chapter. • Chapter 13 bankruptcy that has yet to complete repayment (repayment plan in progress) or has completed payment in the most recent 12 months. • Plans that are completed for 12 months or greater do not require a credit exception in accordance with Section 10.8; • Late mortgage payments if any mortgage trade line during the most recent 12 months shows 1 or more late payments of greater than 30 days. • Late rent payments paid 30 or more days late within the last 12 months. Read more about USDA credit requirements in Chapter 10 including bankruptcy, foreclosure and short sale acceptance USDA Qualifying Areas The home must be located in a USDA defined area. The USDA provides a lookup tool to determine whether the house is located in a USDA designated location. USDA area eligibility lookup The property must be predominately residential in character, use, and design. The home may be attached, detached or semi-detached and must meet the current minimum USDA property guidelines. Site Size There is no specified limitation to the acreage/size of the lot. A home with excessive acreage that represents a cost greater than a similar home with less acreage may not be acceptable. The appraiser must provide an addendum to the appraisal with an explanation to adjustments to comparable properties. Income Producing Buildings The property must not include buildings principally used for income-producing purposes. Barns, silos, commercial greenhouses, or livestock facilities used primarily for the production of agricultural, farming or commercial enterprise are ineligible. However, barns, silos, livestock facilities or greenhouses no longer in use for a commercial operation, which will be used for storage do not render the property ineligible. Outbuildings such as storage sheds and non-commercial workshops are permitted if they are not used primarily for an income producing agricultural, farming or commercial enterprise. A minimal income-producing activity, such as maintaining a garden that generates a small amount of additional income, does not violate this requirement. Home-based operations such as childcare, product sales, or craft production that do not require specific commercial real estate features are not restricted. Additional property eligibility can be found in Chapter 12 Property And Appraisal Requirements Chapter 12 also addresses potable and waste water systems, street access and road maintenance. PHFA and USDA The USDA loan program is accepted by the Pennsylvania Housing Finance Agency (PHFA) under the Keystone Government Loan Program. The benefit of the Keystone government loan is a lower interest rate and access to the Keystone Assistance Program (subject to PHFA guidelines). The maximum assistance loan is 4% of the sales price up to $6,000. There are no first time home buyer requirements with either the Keystone Government program or the Keystone Assistance program.
USDA Loan Info