San Diego's #1 0% Down USDA Home Loan 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 the ins and outs 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.
In this video I go over:
- The loan's main details and highlights
- How to find if the property address meets the needed criteria
- Where to find what the max income allowed is per your family numbers
- What the typical max debt to income (DTI) ratios are
- The differences of this loan versus an FHA, conventional, or VA
- and much more...
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Here's the main points and highlights:
➡️ It is *not* just for first time home buyers - it is for everyone. Whether you have never owned before - or have, that's fine.
➡️ This is for a home, townhome, or condo. I do not personally deal with vacant land, manufactured homes, nor mobile homes and have no idea if you can or can't with them.
➡️ This is *not* for a working farm - this is for a home, townhome, or condo that you will be living in.
➡️ It is address specific - as mentioned, think of the outskirts of San Diego, think countryside, think places like: Fallbrook, Pauma Valley, Ramona, Julian, Palomar Mountain, Campo, etc. Here is the direct link where you can put in the address of any property you might have an interest in and see if the address works. If it does, great - if not, it doesn't work going USDA.
➡️ 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.
➡️ Debt to income ratios (DTI) on this is a bit different. Generally speaking we use 29%/41% for the front end and back end ratios. But, I have seen as high as 34%/46% ratios.
Simplified, if you make $10,000 per month gross (before taxes) that means we can go *as high as* $3400 per month for a total housing payment and as high as $4600 per month in total debts (what's on your credit report + future housing payment / average gross income over 12 months).
But, please keep in mind - generally speaking we are at the 29/41 ratios.
➡️ Current credit score needed is a 580 middle fico score and/or the lowest middle fico score if you are applying with someone else. Generally speaking the higher your credit score, the lower your rates, and the more likely to get a higher DTI allowed.
➡️ There is no maximum loan amount. If you qualify for the loan, it's within all ratios, we have no max loan amount.
➡️ There is a low 1% upfront guarantee fee and an annual guarantee fee of 0.35% (compare that to an FHA loan with a 1.75% UFMIP and 0.80% monthly - the USDA is much lower.
➡️ If you have had a chapter 7 bankruptcy you can get a USDA loan 3 years from the discharge date.
➡️ If you have had a foreclosure you can get a USDA loan 3 years of the foreclosure date - that is the actual date you had to be out of the house and lost possession.
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:
Feel free to leave any comments or questions below – or, contact me here.
Your USDA Insider,