What are the requirements for the USDA program in Harlingen? So that’s going to be looking at a 640 minimum credit score requirement.
There is a income requirement too when applying for a USDA Loan Harlingen.
So basically the income requirement is about 78,000 if you’re in a family of 1 to 4 if you’re in a family of 5+ that’s gonna go up to about $103,000 on the income limit.
The big requirement for USDA is that it’s property specific.
It’s got to be in a USDA Approved Zone. How much down payment does this program require?
It’s actually 0% down payment which is Great!
Ok Awesome, and how much does the average home buyer come in with out-of-pocket?
So because your down payment for a USDA Loan in Harlingen is covered you’re just gonna have to come in with again your prepaid and closing cost So if it was a $300,000 purchase.
you’d be looking at about $7,500 cash for keys to get in the home.
What type of home buyer is the USDA Loan program Ideal for? So this is going to be ideal for the home buyer that’s looking for a property in those specific areas.
Ideally it’s properties that are going to be USDA Eligible rural zones.
So not right in the middle of the city, but maybe if it’s more on the outskirts, on a little bit of land, lower tax rate areas that’s probably going to be a property that’s eligible and that would be ideal because that one would probably qualify OK, Fantastic.
What is a USDA Home Loan?
I bet you’re wondering, what is a USDA home loan?
Designed with the residents of more rural areas in mind, the United States Department of Agriculture designed its loan program to enrich rural communities by providing affordable home loan options to low-income households that may not be able to secure home financing through other means.
Who has time to stop and smell the roses? You don’t, and this isn’t even a rose.
What are the requirements for the USDA program?
So USDA has a few interesting requirements First of all, you’ll need to have at least a 580 credit score Some lenders require a 620 credit score.
Your household income has to be under the county maximum Like a lot of down payment assistance programs. This is based on family size So 1 to 4 is one category and then 5 and above is a higher threshold for qualifying
What’s unique about this one is the home has to be within a designated area.
So, Typically what that means is.
NOT within a metropolitan area So within our area here (Riverside county) Our local cities around her don’t qualify But we only need to go 10 miles away to where there’s an open area where there’s Several homes that qualify.
USDA stands for United States Dept of Agriculture But it’s NOT a farm loan.
Specifically, they don’t finance this program for farms in Harlingen.
It has to be a Single Family home in the Harlingen area, without a barn structure on the property.
Then it also has some home price limitations.
The Threshold is a little bit lower than say an FHA loan for the loan limits.
Ok, and how does this program differ from other Down payment programs?
So it’s different because it’s not really a down payment program but it allows financing up to a 100% of the purchase price And it’s interesting because you can actually use this program with 1 or 2 of the other programs.
If you need closing cost assistance But, what’s unique it’s a 100% Financing so you don’t need a 2nd or a 3rd lien on the property.
Your interest rates are typically lower than if you combine it with a down payment assistance programs and you don’t have to repay any down payment assistance.
It has a monthly factor It’s like mortgage insurance upfront It’s financed at a monthly component.
Much less than FHA So if you can qualify for this program It’s better than FHA And As I mentioned, rates and payments Are typically lower on this program So USDA is really a great program.
And on average How much does the home buyer have to come in with out-of-pocket?
So Again, we are financing the whole loan Purchase price up to 100% So the only thing remaining is then the closing costs Typically, plan on around 3% of the purchase price for funds to close.
The question there then becomes, Well, Where does that come from? Typically, we ask the seller to cover those costs And if we can get the seller to cover 3% Then, the buyer may only need to come in with an earnest money deposit.
And they may even get most or all of that back.
If the seller is covering all the fees.
One unique feature about USDA Versus all other loans is that if the home appraises for more than the purchase price.
We can finance the closing costs up to that appraised amount So, no other loan I know that we can actually finance the closing costs.
What type of home buyer is this program ideal for?
So certainly those that don’t have access to money for a down payment Anyone that wants to live that doesn’t have to live within a metropolitan area because, again, the house has to be in an area that is not in a high densely populated area.
It’s also suited well for people who have some credit issues and anybody that qualifies for this program would definitely be better served than going FHA so those type of people.
And besides the Area restrictions are their any other property restrictions? So property restrictions are going to be similar to FHA They’ll do manufactured homes.
They’ll do homes with Casitas So no real other restrictions.
Just if it conforms to the FHA guides then it should qualify for USDA There’s a couple little quirky things that you don’t run into very often like you can’t actually have a barn on the property It definitely can’t be for agricultural purposes It has to be for residential purposes.
USDA Loan Harlingen – Do You Pre-Qualify?
hey this is Chris the mortgage pro todayI'm gonna teach you how to qualify for a mortgage well there's a lot of thingsobviously that a lender has to look at so let's go through each and every oneof them the first one that stops everybody and they get all nervous iscredit now some people have outstanding credit and some people hey they havechallenges maybe they had late pays you know bad things happen to good peopleall the time and sometimes that's the reason for a low credit score sometimesit's you don't even have enough credit so let me give you a way to think abouthow the lender will look at your credit they say to themselves hey if this guycan't pay a $25 a month credit card are we gonna lend them three hundredthousand dollars it's a small way of thinking don't think fold up thinkbigger think I'm not gonna go out to dinner I'm gonna pay my bills first youpay your bills this is what my mama taught me first you pay your bills youpay the mortgage you pay all your other debts then you figure out a wheat andsteak over eaten beans it's just a way to think if you think like that in ashort period of time your credits gonna be good enough to fire your landlordokay next thing lender needs to know income well do you have job stabilityhow long you been on your job look you could get a job and get approved thenext day you really can but if you change jobs every three months well thatjob stability isn't there they want to see some kind of stability do they wantto see income of course how do they know that you can afford to make that paymentthey need to know that you have the income they expect it to continue forusually three years is what they're looking for obviously you can get fireyou can get laid off things could change but they have a reasonable expectationof three years going forward that the income will continue so they want to seethat they'd love to see a history the stronger the history the stronger thecase you could fire your landlord okay next thing they want to seedownpayment they call this skin in the game if you put up your own money thatyou worked hard for for a down payment they say hey they got some skin in thegame they're serious they're committed now if you put a zero down program andwe have these zero down programs they work great for some people but it makesa little bit tougher for the underwriter to say yeah they're worth taking a shoton so we want to see a down payment sometimes people put $200,000 on a downon a four hundred thousand dollar house do they have some skin in the gameit makes the underwriters decision way easier doesn't it and if a person can'tput a thousand or two thousand dollars down it makes the underwriter a littlenervous so take advantage of the programs save some money but be surethat you're ready to show you're committed to this transaction okaysomething else obviously the underwriter wants to seewe need an appraisal of the property we have to know the lender needs to knowthat if it's a four hundred thousand dollar loan that the house isn't worththree hundred and fifty thousand dollars so the collateral is the last piece ofthe puzzle that they have to make sure it's worth it but that also protects youas the borrower why because if you commit to buying a house for $400,000and it appraises at three hundred and eighty thousand is that something youreally want to do so this is designed to protect you and protect the lenderthat's a big deal okay not only do they want to see your credit but on thecredit report it's a list of debts what do you mean well you have your carpayment on there you have your credit cards you may have child support alimonywe have to look at all the debts if you make $5,000 a month but you have $2,000a month in debt doesn't leave a whole lot for a house payment so we have tolook at all the numbers versus your income so that's the last thing thatthey're gonna want to see how much is going out already because you're gonnaadd on this new house payment okay so those are the five things that alender needs to see they want to see your credit are youresponsible do you pay your bills on time or do you make excuses for notpaying them do you have crazy debt that's out of control that you can'thandle when you add on house payment do you have income and job stabilityhow's that going do you have five new jobs or one new jobit doesn't really matter if you have two or three jobs but if you change your jobon a regular basis not gonna work what else they want to see how much moneyyou've saved what's in your 401k what's in your IRA what is in your bank do yousave money do you have a financial responsibility that you are showing youare a responsible borrower those are the key things they want to see andobviously the appraisal they want to make sure the collateral is solid itprotects the lender and protects you so this is Chris Trapani call me I'll helpyou figure it out and together we're going to fire your landlord!.
Gary Vaynerchuk on Realtor & Lender Marketing Strategy
Well hi there, I'm Michael Hausam of TheHausam Group at Vista Pacific Realty.
So the question I want to address today iswhether you as a homebuyer or a mortgage borrower should use a mortgage broker ora direct lender.
What's the best place to go to get a loan? Now as far asdefinitions go, a direct lender is somebody, an institution, that's lendingtheir own money; whether it's a bank like Bank of America or Wells Fargo or Chaseor a mortgage banker, like Quicken Loans or Loan Depot.
a mortgage broker is acompletely different animal ;that's a third party intermediary, who's basicallytaking your loan package and taking it to a direct lender.
So what's the bestone to use? Well in my background, as I've mentioned before, I started out in thereal estate business on the mortgage lending side.
I first worked for afinance company, that was a division of an automotive company that made mortgageloans; and then I went to work for a bank and then I work for two differentmortgage bankers, and now I can broker loans as a mortgage broker.
So the quickanswer is: the best place to get a mortgage loan is through a mortgagebroker.
'Cause that's what I do! But as self-interested as that answer is,it's also the right one, as far as I'm concerned, because I have my license witha mortgage broker because I want to be able to obtain the best possiblefinancing for my clients.
But there are reasons for that.
Consideration number1: your profile.
If you've got extremely good credit and your income and assetsare very simple, you can basically get a loan from anywhere.
But if yourcircumstance is more complicated, if your credit isn't great, if your tax returnsare complicated or your employment is complicated or your assets arecomplicated, then you might have a difficult time finding a direct lenderwho will make that kind of loan.
A mortgage broker willhave the experience and probably dozens of different avenues to take your loan.
So that's the first consideration.
Now the 2nd consideration is the type ofloan that you want.
If you want to borrow six hundred and seventy nine thousandsix hundred and fifty dollars or less and you want a standard thirty-yearfixed-rate loan, that's a Fannie Mae Freddie Mac agency loan, and everybodymakes those loans.
But if the loan you want or the loan you need or the loanthat you qualify for doesn't meet those requirements, it's a little morecomplicated.
If you've got credit or asset or income issues, you're probablynot going to be qualifying for a Fannie Mae or Freddie Mac loan.
Nn that case itmay be difficult to find out which bank will make the loan for you.
Also someborrowers have extremely unique profiles as far as high net worth individuals, andthey want to cross collateralize brokerage accounts, other properties,significant assets that they have and it takes a custom high-end private bankerto make those loans.
I also had a circumstance recently where a borrowertried to see if I could match a rate and quote given to them by their creditunion.
Well at that time their credit union was offering a special promotionfor people that were in the ministry - the wife worked for a church - and adifferent promotion for people in education and the husband was a teacher.
They also had a special credit with their credit union because of the timethat they'd been members of the credit union.
Well the circumstances in thatsituation were such that these borrowers got an amazing deal that wasn't readilyavailable in the marketplace.
Consideration number 4 is thetransaction itself.
Where is the loan going to be handled? Maybe you're notaware and haven't been paying attention to the mortgage business like I havelately, but Wells Fargo and Bank of America and Chase have all announced aton of layoffs; they're consolidating operations.
I just ran into this with a buddy of mine that had a really good relationship withthe lady at his local B of a branch.
Well he was talking to her about gettinga loan, but it turns out that other than just taking the loan application itself,a hundred percent of everything that was going to be done on his loan was handledout of state.
The people would've had no idea who he was and, more importantly, no ideaabout what was going on here in Orange County real estate.
The other issue thatcame up with that loan is that this particular banker didn't have any ideawhat a conditional loan approval was.
It's something that I use in my realestate business extensively and that's the type of loan that you get a borrowercompletely underwritten by a human underwriter; the loan is completelyapproved before finding a house.
Well, B of a won't do that type of loan.
Theywould give a pre-qualification letter but they wouldn't get anybody to signoff on the loan.
Well that has an impact on the transaction.
So we ended up notusing Bank of America because they couldn't help us the way that we neededto be helped.
Also another consideration is if you're using a local mortgage bankor local mortgage broker and the representative is right here in thecounty, there's some pressure that can be brought to that individual that wouldn'tnecessarily be the case if you just pick up the phone and talk to somebody wayoff in Michigan at Quicken.
Being a real estate agent (and I'm here at an openhouse right now) it's very common to have mortgage bankers and mortgage brokerscome in here to the open house to try to get business from me.
Well can youimagine if I'm in a transaction with one of those mortgage bankers or mortgagebrokers and something goes sideways, it's not just that one transaction thatthey're gonna be thinking about.
It's all the other transactions that they'rehoping that I'm going to send to them and you as a borrower can benefit fromthat situation.
Whereas if you're on the phone to some21 year old recent college graduate that's got a headset in the cubicleoutside of Detroit and you're one of seventy-five people and his pipeline,your tragic circumstance or urgency isn't gonna mean quite as much.
And thatcould impact you in your transaction Consideration number four is simplycosts.
And let's be honest ,when it comes down to it, the question that's alwaysasked is not, "How good is your service and where is your processing centerlocated?" It's, "What's your rate and fees?" So let me give you a little bit of atutorial on how it works for mortgage bankers.
Their loan officers are giventheir rate sheet, "This is today's rates and this is what you have to go out intothe marketplace with," and if you're dealing with one of those individuals,they have their rate for the day and you get that opportunity, whereas with themortgage broker I'll get 75 or 80 different lenders whoare all competing for my business.
So what happens is they because they don'tneed to pay a loan officer and have office space and all that for a retailbranch, they're delivering on a wholesale basis; so they deliver dramatically lowerrates to me as a mortgage broker and then I, seeing all of these differentlenders competing against one another, can figure out the loan for you and theprice for you, as these guys are all trying to fight it out.
You then benefit;so that's one huge advantage that a mortgage broker has, is that at the clickof a button, literally the click of a button, they can do far more shoppingeffectively then you can do picking up the phone calling all over town andcomparing rates.
Now for my particular clients, what I do if I'm representingyou as a home buyer, I offer substantially discountedorigination fees; as for me the loan piece isn't the way that I make myliving.
The loan piece is the way that I make sure that my clients get the bestservice, the best terms, and the best performance, so that theirtransaction holds together.
It's absolutely impossible, other than in themost unique of circumstances, that I can't dramatically undercut the costsand fees of any mortgage banker or mortgage broker for my real estateclients.
So if you'd like to learn more about that or if you'd like a simplerate quote, you can call nine four nine four one three two three seventy one.
Youcan email me Michael@HausamGroup.
also right above my head there should bea little round button with an 'i' when you move the cursor; click on that andthat will take you to my website and you can get more information there, as well.
Lastly, please follow and subscribe to this youtube channel.
I very regularlydo advice for borrowers, for home buyers, and home sellers; tips and other littlethings to help make your real estate experience easier and happier.
Thanks somuch for watching and have a great day!.