San Diego's #1 0% Down USDA Home Loan Q & A in 2021
(Please note, this video was created prior to 2021 - but, these loan amounts, and loan details below, have been updated for 2021...)
✍️ In this video I break down some common questions I get of the $0 down USDA mortgage loan right here in San Diego.
✍️ This mortgage loan is great for anyone that wants to live on the outskirts of San Diego (think Fallbrook, Pauma Valley, Ramona, Julian, Palomar Mountain, Campo, etc), doesn't have a down payment, extremely low interest rates (think low to mid 2's), and lower monthly mortgage insurance than an FHA or conventional loan.
This this video I will answer:
- The click notes version of the loan...
- Possible scenarios on how much payments might be...
- Type of properties that work...
- Is this loan REALLY possible...
- What if I have had a foreclosure or bankruptcy...
- and more...
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Here are the most popular questions:
❓ Question #1 - I Love Your Videos - Sometimes I Just Don't Have the Time to Watch - Can You Break Down the USDA Loan as Simply as You Can?
➡️ Answer #1 - Yes, the loan is address specific - you can see if a specific address works here.
Then, it has a max income limit depending on how many people are in your household - you can enter in your own basic details here.
You need a minimum credit score of around 580.
You can have a max 34%/46% debt to income ratio (with great credit otherwise 29%/41% is the normal max).
Those are the major points.
❓ Question #2 - I Get USDA Loans Have Lower Interest Rates, Lower MI, and Therefore Will Be a Lower Mortgage Payment - How Much Would it Be for "X"?
➡️ Answer #2 - Yes, without you filling out an application, providing supporting documents, and running your credit and knowing your score, and DTI ratios - here's general numbers I give so you can have a rule of thumb.
It costs about $550 per $100,000 financed for a total housing payment - that's principal, interest, taxes, homeowners insurance, and mortgage insurance (if there's HOA add that on top).
Keep in mind - a USDA loan does *not* have a maximum loan amount - if you qualify, regardless the sales price, it works:
$300,000 x $550 = $1,650 per month
$400,000 x $550 = $2,200 per month
$500,000 x $550 = $2750 per month
$600,000 x $550 = $3,300 per month
$700,000 x $550 = $3,850 per month
$800,000 x $550 = $4,400 per month
$900,000 x $550 = $4,950 per month
$1 Million x $550 = $5,500 per month
❓ Question #3 - What Types of Properties Can I Get a USDA Loan For?
➡️ Answer #3 - I personally just work with homes, town homes, and condos. You need to live in the property as owner occupied. So, I do *not* work with land, mobile home, manufactured homes, or working farms.
❓ Question #4 - I Am Confused - This Loan Sounds Too Good to Be True - What Am I Missing? Why Doesn't Everyone Get One?
➡️ Answer #4 - Let's keep in mind it's address specific. So, that automatically cuts out everything in San Diego in metro areas or think higher populated areas like North County Coastal, San Diego Coastal, San Diego Central, South Bay, most of North County Inland, some of East County.
Besides that - if your income is less than the max allowed, your credit score is decent, and the debt to income ratios work - than, there's no catch.
❓ Question #5 - I Have Had a Foreclosure (or Bankruptcy) Can I Still Take Advantage of a USDA Loan?
➡️ Answer #5 - Yes, if you had a chapter 7, it's 3 years from the discharge date. We would need your chapter 7 paperwork *and* discharge - that's usually around 60 pages.
If you have had a foreclosure - that's 3 years as well. And, we need the foreclosure paperwork.
If you have had a short sale - that's 3 years as well. And, we need the short sale paperwork.
Here's how much $$$ you will likely need out of pocket
➡️ Deposit - You should count on putting between 1% to 2% of your sales price - as your deposit into escrow - within 3 days of your offer being accepted. This is totally negotiable between the buyer (you) and the seller. I have helped clients with as little as $500 into escrow. But, keep in mind with the low inventory in San Diego, and lots of offers on each property, that's not a likely scenario.
Please keep in mind this is 100% refundable - if it's not used and refunded back at the close of escrow.
➡️ Home Inspection - You *should* use a licensed home inspector to check out the property to understand the kind of shape it's in. Do you HAVE to? No, just highly recommended. Depending on if it's a home or townhome/condo it will be somewhere around $250-$500 +/-.
Keep in mind - you can choose to inspection anything you want. The roof, septic, plumbing, electrical, pool, spa, foundation, etc.
➡️ Home Appraisal - You will need to get a home appraisal on the property since you are getting financing. You pay this directly to the appraiser. This has nothing to do with the buyers agent (me), the listing agent, the seller, the lender, etc. This will be around $500 +/- depending on if it's for a conventional or FHA loan.
My offer to you: If you use my services for the real estate and loan I will refund back after the close of escrow (aka after checks are sent out) whatever you spent on your home inspection and appraisal as my way of saying "thank you" for utilizing my services.
Basic documentation needed from you (or you and co borrower):
✔️ Copy of your drivers license (screen shot is fine)
✔️ Copy of your social security card (screen shot is fine)
✔️ Last 30 days paychecks (you should get these from your employer via email and PDF each time you are paid).
✔️ Last 2 months bank statements - all pages (You just log into wherever you have a bank acount online and save the last 2 months via PDF.)
✔️ Last 2 years taxes and W2's - If you do not have them you can get them from the IRS website here.
✔️ Latest statements if you have anything like: 401(k), retirement, stocks, bonds, mutual funds, etc
✔️ If you are self employed we will need last 2 years taxes and W2's (if applicable) as well as year to date profit and loss sign and dated (you can do this - doesn't need to be a CPA).
✔️ We can potentially need more depending on this like: pay or collect child support, have been divorced, have had a short sale or foreclosure, have filed bankrupcty, have rental properties, etc.
Here's your steps to begin:
1) Fill out my online application in 10 minutes or less at www.scottsloanapp.com
3) Once I get the needed supporting documents from you I will double check th application, your needed supporting documents, pull your credit report (it's currently $38 +/- and I pay for that), and get back to you with best scenarios.
Here's more San Diego USDA home loan videos below:
• 5 SD USDA Program Secrets
• SD USDA Program Q & A
• SD USDA Program Needed Documents
Feel free to leave any comments or questions below – or, contact me here.
Your USDA Insider,