Tuesday, March 27, 2012

USDA DIRECT home loan - Sub Prime at Best

USDA Rural Development has many home loans and grants available but few people really know about them.  Maybe that is because their web sites are not user friendly.  It is almost as if they use a different language than we common folk.  Or maybe it is so people don't know about the Government waste. (sorry)

The USDA Direct home loan is a sub-prime loan at best.  It is government funded, and most times the mortgage payments are also subsidized by the government.  Well, hello.  That is 100% paid for by the tax payers even without the subsidy. 

Many of the qualifying buyers are on food stamps.  In fact until Oct of 2011 the food stamps were considered INCOME and calculated into the debt to income calculation.  I'm thinking, ... they are going to pay their mortgage with their food stamp card???  Really?

In all fairness if this program was used as originally intended, for first time buyers of low income, it would be a good program.  Politics have turned it into a welfare program.  Obviously the delinquency rate is very high.   There are many repo's on the market but that is only after USDA has given them programs (with no payments at all) for a very long period of time.  You won't find this on their web site.

If your are a first time home buyer of low income this is a program you might want to research.  It can be a good program if it is not abused.

This is a video that covers the direct home loan guidelines.  If you have questions send us an email and we will try to find the answers on the USDA site.  Again, not user friendly.

This is a good program if it is not abused.

The best home loan on the market is the USDA Guaranteed home loan.  No money down and the guidelines are just like a conventional loan.  Check out the usda guidelines


Wednesday, March 21, 2012

VA Loan Processing Tips

It does not matter if you are thinking about a VA loan or a FHA loan you should do some simple research before you ever apply.  You may be thinking about a VA loan but depending on your situation, a FHA or USDA loan may be a better option.  I hope this post will help you better prepare so you can decide which loan is best for you.

These are the things you need to do first so you can consider your options:
  • Your credit history and your credit score, ...  Pull your credit from all three repositories
  • Do research on the guidelines for all types of loans.  These two links will get your started:  VA credit guidelines and FHA credit guidelines.  Don't worry, they don't sell anything and they don't do mortgages.  They will also help you find answers to your questions if you send them an email.  They don't share or use your info.
  • Calculate your DTI
  • Determine how much money you have for a down payment.
  • Do your research, research, research, and research again.  You should understand the guidelines as well as your average loan officer.
  • Get your documentation together.  There will be so much needed your will be sick of it!
The three best loans on the market today are: VA, FHA, and USDA (USDA has two types).  If you have the patience to watch this video it will help you see the major areas of consideration.  You still have to do your research afterwards.  You can't get out of it.

Most loans now take anywhere from two to three months to close.  There are some things you can do ahead of time to help your underwriting process go smoother.  This is a short video and it has good information.  In fact, many loan officers miss this stuff.  Don't you, ... be prepared.

Going through the loan process can break your heart if you don't understand the guidelines before you apply.  I have people sending me questions and input all the time and it just breaks my heart.  If you don't believe me go to:  Good grief, how long does it take .  This will scare the britches off of you.  Read the comments.

Hope this helps.  If you still have questions just send us an email.

Sunday, March 11, 2012

Credit Score - Not

Many people are confused about what their credit score or fico scores are calculated from.  These are some of the items that might be found on your credit report but are not part of the credit score calculation.

This information really has nothing to do with the credit guidelines for a VA Loan other than they are things that might show up on your report.  I've created this post because I get so many questions from people about this stuff.  You can check out the actual guidelines at: http://www.va-guidelines.com/va_credit_guidelines.htm .

Rental Agreements:  These only show up on your report if you live in an apartment complex and you don't pay your rent.  Many apartment complexes do report to credit reporting agencies if you get far behind in rent and/or move while you still owe them money or if you damage the apartment.  If this occurs it does have an impact on your score.  If it does not happen, rental agreements don't even show up on the report and of course are not calculated in your score.

Marital Status:  This has absolutely no impact on your score.  However, your report will show accounts that you are jointly on with your spouse or previous spouse, or any other person.  The status of that account is considered in the score.  Again, they don't care if you are married, divorced, or whatever.  They only look at account history.

Age:  Your date of birth is on your report but not part of score calculation.  If it is or ever does, ... I'm Telling My Mom!!

Salary:  Absolutely not in the calculation of your score.

Occupation:  Not in calculation.

Employment History:  This is not used in calculation but may show up on your report.

Receipt of Public Assistance:  Not on Report or in score.

Here is a short video that covers the above information:

If you go to our va guidelines site and cannot find the answers to your questions send us an email from the site and we will help find the answer for you.

Good Luck.