San Diego's #1 0% Down USDA Home Loan Secrets Revealed 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 secrets you might not know of the $0 down USDA mortgage loan right here in San Diego.
✍️ As a friendly reminder, 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.
In this video I will go over:
- How much cash $$$ out of pocket you will need...
- The max income limits allowed....
- If there's lower monthly payments than FHA or conventional loans...
- Where it works (location wise) in San Diego...
- If you MUST be a first time home buyer....
- and more.
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Here's the Secrets:
➡️ Secret #1 - Very Little Cash Out of Pocket
We already know that we can get 100% financing with a USDA loan. But, we can also finance in the 1% up front loan guarantee. And, we can also ask the seller to pay closing costs, use a lender rebate (video explains), or a combination of the 2. That limits our cash down, limits cash for closing costs, and keeps more money in your pocket. Expect to put about .5% to 1% of the sales into escrow as the good faith deposit (fully refundable if we get enough in closing costs), expect to pay a licensed home inspector about $500 +/- directly, expect to pay a licensed home appraiser about $500 +/- directly, and that's about it.
➡️ Secret #2 - Higher Income Limits Than You Might Think
There is an income limit. You can use this direct link to see if your income falls within the guidelines of being okay. If your income is that amount or lower, depending on your family size - you are golden. If not, you cannot go USDA.
However, to give some examples I checked for a family of 4 people, with 2 adults, and 2 kids under 18, and the max income allowed for ths example is: $143,040 per year or $11,920 per month.
(If you have child care expenses, and the child or children are 12 or under, you can potentially have a higher income).
So, if you make this amount or less for your entire household - you are great.
➡️ Secret #3 - Lower Monthly Payments Than a Conventional or FHA Loan
The great thing about the USDA loan is the fact that, generally speaking, has a lower 30 year fixed interest rate than an FHA or conventional loan, has a lower upfront guarantee than an FHA loan does (conventional doesn't have one), and lower monthly mortgage insurance than an FHA or conventional loan.
➡️ Secret #4 - Works in More Areas Than You Might Realize
Yes, it is address specific and only works on the outskirts of San Diego - but, you might be surprised which areas might be included based on it's address. Parts of Oceanside, Vista, Bonsall, Fallbrook, Rainbow, Pauma Valley, Escondido, Borrego Springs, Ramona, Alpine, Boulevard, Campo, Descanso, Dulzura, Jacumba, Jamul, Julian, Lakeside, Mount Laguna, Palomar Mountain, Pine Valley, Potrero, Santa Ysabel, and others.
➡️ Secret #5 - You Do *Not* Need to Be a First Time Home Buyer
It doesn't matter if you have never owned before, or have, the USDA loan is fine for anyone. While there are some down payment assistance programs that are just for FTHB - the USDA loan is not.
➡️ Bonus Secret #6 - Other $0 Down Options Available
If the USDA loan doesn't work for you - maybe due to location, or debt to income ratio issues, or max income allowed, etc - there are other options available. If you have been, or are, in the military you can get a $0 down VA loan - and, of course I have down payment assistance loans as well.
Here's the cash out of pocket you can expect:
➡️ 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 credit towards your closing costs at the close of escrow 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,