What are the requirements for the USDA program in San Antonio? 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 San Antonio.
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 San Antonio 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 San Antonio.
It has to be a Single Family home in the San Antonio 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 San Antonio – Do You Pre-Qualify?
Well hi there, I'm Michael Hausam of TheHausam Group at Vista Pacific Realty; so I had a couple of buyer consults last weekwhere the issue of pre-qualification came up.
or pre-approval or conditionalloan approval; there's a bunch of different words for that; oftentimesthey're used interchangeably, but this is arguably as an upfront effort one of themost important things that a homebuyer can do and the confusion about theseterms and what they mean is pretty significant; also there's quite atremendous strategy involved if you complete this process correctly; so Iwant to define a few terms and correct a few errors along the way; all right, sofirst of all the pre-approval or pre-qualification, conditional loanapproval, whatever you call it, is basically all the work that's done by abuyer up-front, before they ever go out and buy a house; okay it really makessense to do that no matter what because you want to be making sure that you'relooking for homes in the price range that you can qualify for and also itmakes a heck of a lot of sense to make sure that the home that you'd like issomething that you can actually spend the money on to buy, both on the cashdown as well as a monthly basis; but let's look into the details;there are basically three levels of work that can be done upfront; number one iscalled pre-qualification; pre-qualification is a verbalconversation with a lender; sometimes it might include a credit report sometimesnot, it never includes providing incomedocumentation; basically a pre-qualification is a paper-napkindiscussion with the lender that says, "yeah this is about whatit's gonna cost and if everything you told me is correct, you might be able toget a loan.
" It basically is the simplest, least intrusive way to have aconversation with a lender to kind of figure out, "yeah I think you couldprobably qualify for a loan.
" But let me assure you this, precisely zerolistening agents and home sellers are impressed with the pre-qualification; thesecond level of advanced work is known as a pre-approval; now way back in theday, in the 1990s when I first got into the mortgage business, a pre-approvalmeant that you took an entire loan file and took it to an actual humanunderwriter who went through everything and signed off on the loan; that wasliterally pre-approved before finding a home; well nowadays it's a little fuzzierthan that; a pre-approval typically will include providing income documentationto the lender, pulling a credit report, and then submitting to an electronicunderwriting process, but no formal loan underwriting approval is given; basedupon my experience roughly 99.
9 percent of all transactions go together with apre-approval.
But notice the key point on that: no underwriting approval from anactual human underwriter; what they do is this is they take all the incomedocumentation and then they type it in the computer - pay stubs show this - incomeshows that - credit report shows this - they put that all into a computer press ENTERand Fannie Mae's version of this is called the desktop underwriter and itspits out what they call a "finding" and the finding is they are going to getapproved; or you're likely going to be approved; what it isn't is an actualapproval; the key test would be this: if you've got what you think is a fullyunderwritten loan approval from a lender, you can ask them what are the conditionsof the loan approval and you'll hear something like, "well, we don't have actualloan conditions yet because you need to find a house and submit the loan withthe contract and appraisal and all that to get your loan conditions.
" Well that'sthe key: you don't have an approval you have an electronic pre-approval, which isnot quite as strong and that brings me to number three: aconditional loan approval or sometimes it's calleda TBD approval; TBD meaning the property is to be determined; the conditional loanapproval is like the pre-approval of old and that is you take the entire file, thepay stubs, the bank statements, the tax returns - everything - the credit report, yousubmit that to an underwriter, who goes through and signs off on it, will provideof list conditions from the lender in order to close the loan; it literally isa loan commitment; and this is the important part:the typical lender and I would say in my experience probably 2/3 of them do notlike to do conditional loan approvals, because that underwriter is a twohundred or two hundred and fifty thousand dollar a year person and their autograph,literally their signature, is sufficient to release those funds and the lender'sgonna want that underwriter not working on deals that haven't yet happened, but onthose that are already in escrow; but the key thing is if you find a lender whowill get you a conditional loan approval, you can literally go out into themarketplace with an approval in hand, effectively negotiating as cash; let meshow you an example: this right here, this is a conditional loan approval on atransaction that I did recently, from a lender that I work with called Parksidelending and if you look at this two page, three, four-page document, it's got theunderwriters name right here: Sean Mackie; it has a full on commitment from thislender with a list of prior-to-doc conditions, going onto two pages and thena list of prior to close conditions; so this is literally the commitment fromthe lender to make the loan; so the borrower's and I (my clients), we wentthrough and looked at all of these conditions to make sure that there wereno conditions on here that we couldn't meet; once we figured that out and wewere satisfied, we were able to write an exceptional offer ;the offer that wewrote didn't have a loan contingency at all; it was very important that myclients' problem, which was they needed a loan, and literally that is a problem: ifyou don't have enough cash to buy a house and you need a loan, that's yourissue, that's not the sellers issue; so we wrote the offer without a loancontingency because we already had the loan and we didn't need the time to goout and find one; and that effectively made my clients just as good as all-cashbuyers; well, as you could imagine, the listingagent and the seller loved that and we got the transaction accepted;surprisingly, we found out later they were competing against a 50% downoffer; so think about this: my clients were writing a 20% down offer,the competition was writing a 50% down offer; now typically you would think thata 50% down offer would be a better offer than the 20% down, right? Well not in thiscase; the 50% down offer, they asked for a two-week loan contingency, my clientsthey asked for none; if you'd like to discuss this further, I'd be happy tohelp you ;you can call me 949 413-2371, youcan also email me Michael @ HausamGroup.
Com Thank you very much and have agreat day!.
Working With the Right Lender | Total Mortgage Minute
Hey this is Chris the Mortgage Pro.
In this video we're comparing conventional loans to FHA loans to VA loans whichone's the best one? Which one's right for you? You know so many consumers are curious.
Which loan is best for me? Today I want to help you figure out which one isgonna benefit you and your family the most, for you a short-term and/orlong-term goals because it's different for everybody.
Now there are advantagesto each one of these loans so some have lower interest rates, some have lowerfees there's all kinds of different things to think about! Now most peoplehave a tendency to just look at one thing.
The payment! 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 PMIdisappear? 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 wehave to look at these things as a whole.
Now people ask you all the time what'stoday's interest rate? It's impossible to answer that question, because yourfinances and every person's finances are as different as fingerprints! When welook 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 theinterest 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 determinewhat interest rate you're gonna get and that also helps determine which programis right for you! Okay now it's time we're gonna get into the nitty-grittywe're gonna get into the comparison.
Number one - conventional loan.
Aconventional loan has a minimum of a 620 Fico Score Credit score if you're notsure what a FICO score is that is your mortgage credit score.
Now on an FHA loansome lenders go as low as a 500 my company goes down to a 550 the truth isnobody gets approved at 500 anyway and on a VA loan we're also looking at thesame thing many lenders go to 500 company goes to 550.
Okay PMI mortgageinsurance and on FHA it's called MIP mortgage insurance premium now on aconventional loan what happens is it is very very dependent on what is yourcredit score somebody with a very high credit score might have a very lowmortgage insurance payment, but if you have a 620 Fico score your mortgageinsurance payment could be way high.
Now on FHA FHA has pretty much standardized, here is your MIP rate remember they're the same thing they just call themsomething else here's your MIP rate it doesn't matterif you have a 620 a 580 a 550 or 800 FICO score makes nodifference you're gonna pay the same rate.
On a VA loan great newsno PMI no MIP you got that one.
Okay we're almost halfway through the videoso hit the subscribe button and hit the like button I appreciate thatnow if you'd like to comment, I will answer every single question personallyand of course you're welcome to share this with anybody you think it'svaluable for! Okay Debt ratio! A debt ratio is thepercentage of your gross.
Gross income is before they take taxes out.
A percentageof your gross income to your debt.
Now on a conventional loan with a high FICOscore they're gonna allow you or a 50% that includes your car payment yourcredit cards student loans alimony child support all those kind of things plusthe 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'stake a look at FHA with a 580 FICO score or above, here's what's basically goingto happen.
You're gonna probably be approved to a 56.
99%let's call it 57%, again that includes all your debts plus thehouse payment as a payment.
Lastly we have a VA loan.
Now a VA loan works veryvery different it looks at how much moneyis left over after paying all this stuff.
And it's called residual income andeverybody depending on what area of the country you live inand 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 athousand 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 thewhole industry.
Interest rate on a conventional loan you're often going tohear Fannie Mae, Freddie Mac those are conventional loans.
On a conventionalloan you are gonna have a higher interest rate than either FHA or VA.
Onan FHA loan it's lower than conventional and right about the same as VA they havevirtually the same interest rates.
Down payment on a conventional loan you'reusually looking at a 3% down payment.
People ask me about a conventional loanFannie 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 aslong 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 thankyou! You get a zero percent down payment loan.
Okay so we talked about PMI, MIPmortgage insurance whatever you want to call it.
But there's also somethingcalled upfront mortgage insurance.
Now on a conventional loan there is no upfrontmortgage 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 dealand that's only available on a conventional loan and it doesn't makesense unless you have a really good FICO score.
On an FHA loan we take the loanamount and multiply it by 1.
75 percent we have to add that to the loan amount.
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.
On a VA loan there's a couple of differentscenarios here the first time use of a VA loan it's 2.
15%so on that same hundred thousand dollars it's two thousand one hundred and fiftydollars added on on a second time use it's three point three percent so that'sthree thousand three hundred dollars now it doesn't sound like the end of theworld but if you're taking a four hundred thousand dollar loan and it'sa second VA loan that's three point three percent that is $13,200, that maymake you say mmm this other loan might be better.
Now though lastly if you're aveteran who happens to be disabled 10 percent or more there is no upfrontmortgage fee that there is no VA funding fee it doesn't exist for you.
Okayseasoning from bankruptcy many Americans through the last fewyears they've had a hard time and they did file a bankruptcy on a conventionalloan 4 years must have elapsed from the discharge not from when you startedbut from when it was finished before you're allowed to apply for aconventional loan.
On an FHA loan it's only two years and on a VA loan it'sonly 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 wentto the bank and said, hey my house is worth three hundred I owe four hundredand the bank accepted three hundred thousand dollars.
That was called a shortsale.
Well if you have a conventional loan if you want to apply for aconventional loan it would be four years after a short sale.
For an FHA loan it'sthree years must have elapsed from the time of the short sale and for a VA loanit's only two years.
Again Vets win, they earned.
A foreclosure well yessome people went into really hard times on a conventional loan we are looking atseven years before you can buy a home againOn an FHA loan it's only three years and For the vets - two years from aforeclosure okay Time back to work after an extendedabsence.
Well on a conventional loan there is actually no real time frame butthe lender will take a look they just want to make sure it's reasonable andeverything is considered as a make sense situation you can be back to work forone month after or six months or a year off.
On an FHA loan FHA guidelinesrequire six months back to work with pay stubs proof they've been back to workfor six months before they'll accept that income.
On a VA loan it varies perlender 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 probationaryperiod 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 inthe mountains or down by the beach on the weekends or obviously for anowner-occupied property.
For a FHA and VA loan it is owner occupied.
Hopefullythis video will help you need a decision making process which loan is right foryou but if you still stuck, reach out to me call me, text me, email me and if youwant this information for free go to www.
Info click onthe tips page we have a download button right for you and of course I want tohelp you fire your landlord.