100% Financing for FL Teachers

Teacher - FloridaDid you know that 100 percent financing USDA is one of the most popular home loan options for FL teachers?   Many public government workers like Teachers, Police, EMT, Firefighters prefer the USDA mortgage because you can purchase a home with little money out of pocket.  Let’s face it, most government workers aren’t exactly making the huge salaries to afford large down payments for housing, teachers included.  Most Conventional loan program require at least 10% for a down payment…. who has that?

Not only is the USDA loan Florida’s last 100% home loan for non military buyers, it also allow many other great benefits :

  • Reduced monthly mortgage insurance or “PMI”. This allows for lower monthly payments.
  • Home seller can pay buyers closing costs.
  • Interest rates are low, and fixed terms.
  • No special first time home buyers class or school needed. No grant or waiting.
  • Any livable single family home is ok, as long as located in USDA approved area.

Read about all the USDA loan benefits here and see if getting pre approved for the USDA loan is loan is right for you!  Also check out the most commonly asked USDA FAQ’s here.   Please contact us at Ph: 904-302-6060 with questions.

Serving all of North Florida Teachers and public service workers – Duval County, Clay County, Baker County, Nassau County, Columbia County, Madison County, Bradford County, St. Johns, Flagler County, Volusia County. Alachua County, 100% Financing for FL Teachers

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USDA Loan Financing, Purchase Process

USDA Mortgage Florida

Purchasing a home is a pretty big deal for most people. This is certainly true for first time home buyers, many who use the 100% USDA for financing. Below we will discuss some of the USDA loan processing steps and what you can expect. USDA is a great choice for first time buyers since pretty much all of central south FL (Immokalee, La Belle, Moore Haven, Clewiston, Pahokee, Arcadia,  Okeechobee) is eligible for the program!

USDA Rural Housing Loan Pre Qualification:

The USDA loan application starts the entire loan process. Once a lender has gathered information about a borrower’s income and debts, a determination can be made as to how much the borrower can pay for a house. Since different loan programs can cause different valuations a borrower should get pre-qualified for each loan type the borrower may qualify for. In attempting to approve homebuyers for the type and amount of mortgage they want, lenders look at two key factors. First, the borrower’s ability to repay the loan and, second, the borrower’s willingness to repay the loan.

Ability to repay the mortgage is verified by your current employment and total income. Generally speaking, mortgage companies prefer for you to have been employed at the same place for at least 2 years, with no sizable gaps in employment history. The borrower’s willingness to repay the mortgage is determined by examining how the property will be used. For instance, will you be living there or just renting it out? Since USDA only permits home purchases for primary homes (owner occupied homes)  the home will be obviously occupied.

USDA Mortgage Programs and Rates:

To properly analyze a mortgage program, the borrower needs to think about how long he plans to keep the loan. If you plan to sell the house in a few years, an adjustable or balloon loan may make more sense. If you plan to keep the house for a longer period, a fixed loan may be more suitable. USDA loan are currently only available in a secure 30 year fix term. However, FHA loans do still offer adjustable rate terms. With so many programs from which to choose, each with different rates, points and fees, shopping for a loan can be time consuming and frustrating. An experienced mortgage professional can help clear the air and recommend the most suitable mortgage program based on your needs and goals.

USDA Mortgage Credit Reports:

Most people applying for a home mortgage don’t need to worry about the effects of their credit history during the mortgage process. However, you can be better prepared if you get a copy of your Credit Report before you apply for your mortgage. That way, you can take steps to correct any negatives before making your application.

A Credit Profile refers to a consumer credit file, which is made up of various consumer credit reporting agencies. It is a picture of how you paid back the companies you have borrowed money from, or how you have met other financial obligations. There are five categories of information on a credit profile:

  • Identifying Information
  • Employment Information
  • Credit Information
  • Public Record Information
  • Credit Inquiries

NOT included on your credit profile is race, religion, health, driving record, criminal record, political preference, or income.  If you have had credit problems, be prepared to discuss them honestly with a mortgage professional who will assist you in writing your Letter of Explanation or “LOE”  A loan officer knows there can be good reasons for credit problems and financial difficulties. Maybe you were laid off, hurt, etc.  If you had problems that have been corrected (reestablishment of credit), and your payments have been on time for a year or more, your credit may be considered satisfactory.

The mortgage industry tends to create its own language, and credit rating is no different. Credit scoring is a statistical method of assessing the credit risk of a mortgage application. The score looks at the following items: past delinquencies, derogatory payment behavior, current debt levels, length of credit history, types of credit and number of recent inquires in the last 90 days. The most common score (now the most common terminology for credit scoring) is called the FICO score. This score was developed by Fair, Isaac & Company, Inc. for the three main credit Bureaus; Equifax (Beacon), Experian (formerly TRW), and Empirica (TransUnion).

FICO scores are simply repository scores meaning they ONLY consider the information contained in a person’s credit file. They DO NOT consider a person’s income, savings or down payment amount. Credit scores are based on five factors: 35% of the score is based on payment history, 30% on the amount owed, 15% on how long you have had credit, 10% percent on new credit being sought, and 10% on the types of credit you have. The scores are useful in directing applications to specific loan programs and to set levels of underwriting such as Streamline, Traditional or Second Review.

The following items are some of the ways that you can improve your credit score, thus improving your interest rate:

  • Pay your bills on time.
  • Keep Balances low on credit cards, under 50% of the limit.
  • Check that your credit report information once a year to insure it’s accurate.
  • Be conservative in applying for credit and make sure that your credit is only checked when necessary.

A loan applicant with a score of 720+ credit score is considered an A+ borrower. USDA loan borrowers in this category qualify for the lowest interest rates and their loan can close in a couple of days. A score below 680 but above 640 may indicate underwriters will take a closer look in determining potential risk. Additional processing documentation may be required before final approval.

Borrowers with credit scores below 620 are not normally not eligible for government mortgage financing. Most lenders will have in house requirements on minimum credit score requirements.  620 is the min requirement for most mortgage companies when offering USDA, FHA or VA home loans.   All things being equal, when you have less than perfect credit, all of the other aspects of the loan need to be stellar. Income stability, assets- savings, debt to income ratios  play a larger role in the approval decision. Keep in mind a sufficient credit score does not guarantee loan approval.  Every lender has additional requirements (overlays) in regards to any borrower that has a past Bankruptcy, Foreclosure, Short Sale. Credit patterns, such as a high number of recent inquiries or more than a few outstanding loans, may signal a problem. Since an indication of a ‘willingness to pay’ is important, several late payments in the same time period is better than random lates.

USDA Loan Underwriting:

Once the processor has put together a complete package with all verifications and documentation, the file is sent to the underwriter. The underwriter is responsible for determining whether the package is deemed an acceptable loan. If more information is needed, the loan is put into ‘suspense’ and the borrower is contacted to supply more information and/or documentation. If the loan is acceptable as submitted, the loan is put into an ‘approved’ status and then clear any outstanding loan conditions.

USDA Loan Closing:

Once the loan is approved, the file is transferred to the closing and funding department. The funding department notifies the broker and closing attorney of the approval and verifies broker and closing fees. The closing attorney then schedules a time for the borrower to sign the loan documentation.

At the closing the borrower should:

  • Bring a certified cashier’s check for your down payment and closing costs if required. Personal checks are normally not accepted by closing agents.
  • Review the final loan documents. Make sure that the interest rate and loan terms are what you agreed upon. Also, verify that the names and address on the loan documents are accurate.
  • Sign the loan documents.
  • Bring identification and proof of insurance.

After the documents are signed, the closing attorney returns the documents to the lender who examines them and assuming everything is in order, arranges for the funding of the loan.

Please click to the link →  to read all the most frequently asked USDA Rural Development questions.  Buyers that have questions about applying for the USDA can submit the information request form on the right side.  Serving homebuyers of rural central south Florida –  Immokalee, La Belle, Moore Haven, Clewiston, Pahokee, Buckhead Ridge, Arcadia,  Okeechobee FL, Avon Park, Lake Placid, Sebring.  www.UsdaMortgageSource.com  Ph: (904) 302-6060

2014, 2015 USDA Loan Financing, Purchase Process

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Q&A – How long does the USDA mortgage closing process take?

Question:  I’m about to be under contract on my first home. I would like to have an idea on how long the USDA mortgage process takes to complete so I have time to prepare for my move.

Thank you – J. Naples / Orlando, FL

Answer: Once you are under a fully approved contract, the USDA mortgage closing process will take around 35-45 days to complete.  The exact time depends on the city/county your new home is located. Once the lender underwriting is complete, your USDA home loan has to go through a secondary approval process with the USDA / Rural Development office.  The USDA office has different turn times that can change frequently. However, 40 days is a safe bet to complete the entire processing/closing process here in Florida ( as of October 2014)

Need a USDA home loan pre approval ? Please contact us at www.UsdaMortgageSource.com or just send  the short request form on the right side to be contacted →

USDA Mortgage Source is Florida’s Primary resource for all 100% USDA / Rural Development mortgages. Pensacola , Ocala , Clearwater , Bradenton and everywhere in between – please visit our main web site at www.UsdaMortgageSource.com or call 904.302.6060 to learn more about the benefits of 100% USDA / Rural Development home loans here in Florida. We are available to serve you seven days a week.

Servicing the following Florida cities and counties:

Apopka | Aventura | Boca Raton | Bradenton | Brandon | Cape Coral | Clearwater | Clermont |Cocoa Beach | Coconut Creek | Coral Gables | Crestview | Crystal River | Daytona Beach | DeLand | Deltona | Delray Beach | Destin | Dunedin | Englewood | Fernandina | Flagler Beach | Fort Lauderdale | Fort Myers | Fort Pierce | Fort Walton Beach | Gainesville | Green Cove Springs | Hallandale | Hobe Sound | Hollywood | Homestead | Inverness | Jacksonville | Lakeland | Lake City | Lake Mary | Live Oak | MacClenny |Melbourne | Miami | Milton | Mount Dora | Naples | Ocala | Ocoee |Ojus | Orange Park | Orlando | Ormond Beach | Palatka| Palm Bay | Panama City | Pensacola | Pompano Beach | Port Charlotte | Port St. Lucie | Punta Gorda | Santa Rosa | Sarasota | Siesta Key | Springhill | St. Augustine | St. Petersburg | Sunny Isles | Tallahassee | Tamarac | Tampa | Titusville | Venice | Vero Beach | Weeki Wachee | Wesley Chapel | West Palm Beach | Winter Garden | Winter Haven | Winter Park | Winter Springs | Zephyrhills | Florida | Fla |FL

Alachua | Baker | Bay | Bradford | Brevard | Broward | Calhoun | Charlotte | Citrus | Clay | Collier | Columbia | Dade | De Soto | Dixie | Duval | Escambia | Flagler | Franklin | Gadsden | Gilchrist | Glades | Gulf | Hamilton | Hardee | Hendry | Hernando | Highlands | Hillsborough | Holmes | Indian River | Jackson | Jefferson | Lafayette | Lake | Lee | Leon | Levy | Liberty | Madison | Manatee | Marion | Martin | Monroe | Nassau | Okaloosa | Okeechobee | Orange | Osceola | Palm Beach | Pasco | Pinellas | Polk | Putnam | St. Johns | St. Lucie | Santa Rosa | Sarasota | Seminole | Sumter | Suwannee | Taylor | Union | Volusia | Wakulla | Walton | Washington | County | 2014, 2015, USDA mortgage closing process

 

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Frequently asked USDA RURAL Housing Loan questions

Each day we receive many questions regarding the USDA mortgage here in Florida. Below we have outlined some of the most frequently asked USDA Rural Housing loan questions.

Do you have a question?  Just submit the info quick request form to the right side → and a USDA Rural Loan Specialist will contact you.

Question: Is the USDA Rural Housing program only for first time home buyers? J.Levy – North Port, FL

Answer: No! the program can be used by any qualified home buyer – not reserved for only first time homeowners. However, applicants that currently own a home will have additional restrictions.

Question: Will I required to take some kind of first time home buyers class with the USDA loan program? F. Simmons – Winter Haven, FL

Answer: No class or education is required with the USDA loan!

Question:  Can I include closing costs into my USDA loan? H Kincaid  – Gainesville, GA

Answer: Yes, you will have two options to do this.  First, the most common way is to negotiate your contract to have the home seller pay your closing cost. USDA Rural Development will permit the  seller to pay up to 6% of buyers USDA closing costs and prepaid escrow items.  Another option is to roll your closing into your loan given the appraised value is high enough to support it.  To use this option, the home must appraise higher than the sales price. USDA will permit buyers to roll in or include closing costs up to the appraised value of the home, not the just the sales price.  You can also do a combination of these two options. Please click here for more info on closing costs

Question: How much are the USDA loan closing costs and pre-paid escrow items? J Collier – Tallahassee, FL

Answer:  The exact amount of closing costs, etc will depend on many different variables like your loan amount, current tax assessment on the home, homeowners insurance policy amount, among many other items.  Generally speaking 3-6% of the sales price depending on how high the sale price is.

Question:  Does the USDA program have a loan amount limit, or a cap on how much I can borrow ? D. McCoy – Deland, FL

Answer: There is no loan amount limit with the USDA RD program, home buyers qualify based on their debt and income. Please read here for more information. 

Question: I found the perfect USDA eligible home, but it needs some repairs. Can I borrow extra money in my loan to pay for new carpet and a new fence in the back yard?  J Vasquez – Winter Haven FL

Answer: Short answer is no, only closing costs can be included in your loan – assuming the appraised value is higher than sales price.

Question: I was reading the USDA housing program allows for 102% financing – does this mean we can receive 2% extra for repairs or money back. N. Zimmerman – Naples FL

Answer: The USDA 2% guarantee fee is the one time funding fee that is required by USDA Rural Housing.  All government loan programs require the funding fee, this fee is included or rolled into your loan amount.  Please click here to read a similar question. In addition to this, the USDA loan also requires a monthly mortgage insurance premium like FHA loans but much $$ less each month. ( most know this as PMI)

Question: I found a home that I like, but it has some issues with the roof and electrical.  Will this pass USDA home inspection requirements ? L. Jefferson – Cape Coral, FL

Answer: USDA ( like FHA and VA) follow many of the same HUD requirements when it comes to the property condition.  Generally speaking –  any safety, electrical, plumbing, structural, HVAC, Roof, or WDO termite issues will probably need to be corrected before closing.  It really depends on the seriousness of the problem and whether it will be required to be corrected before closing. Keep in mind many bank owned homes are being sold “as is” they will not correct or repair anything in most cases.  The house has to generally be in decent overall condition.  Now this doesn’t mean the house as to be perfect, every house has some little issues that are to be expected.  The idea is to insure home buyers are purchasing a home in generally sound condition and don’t get in over their head with bad problems right after closing. Homebuyers looking to purchase a home that needs extensive repairs ( and money to do so) should read about the FHA 203K loan.

Question:  What houses are approved for USDA mortgage financing in my area? What type of properties are permitted?  Jose V – Clermont, FL

Answer:  USDA Rural housing is for ANY single family home, townhome, condo that is located in a USDA eligible location.  The house can be a short sale home, bank foreclosure,  REO, for sale by owner….doesn’t matter.  The important factor is the physical location of the home, it must be located in a Florida rural housing approved location. Existing mobile manufactured homes are not permitted under the USDA program. Building a new home on your own land or lot is also not permitted. However, purchasing a new home (new construction) from a builder is permitted.  Click here to view the USDA map for FL as this will show you all the approved locations in FL.  Many locations just outside of Orlando, Jacksonville, Tampa are currently eligible. Do not assume your location is not USDA Rural housing eligible before checking or calling us, you may be surprised!  If your location is not USDA approved, be sure to check into the FHA home loan here. FHA is a great alternative for home buyers looking to purchase in more populated locations.

Question:  I put a contract in a home and was wondering if I need to pay a deposit of some sort?  J. Bryan – Ocala, FL

Answer:  Yes, typically a deposit will be required from the seller to show your “good intentions” on following through with the purchase.  This is often called a escrow binder deposit or good faith deposit ,etc.  For homes in the $100,000 – $200,000 range – typically a $500- $1,000 deposit is customary in Florida.  Some buyers may decide to give more to strengthen their offer and make it look better.  Any deposit money paid in advance will be applied towards the purchase of the home.  Buyers will often times get this deposit money back in the event of appraisal, financing or home inspection issues. It really depends on the contingencies written into the contract, but the items listed above are pretty standard. Insure you check with your realtor.

Question: I owned a home a few years ago, can I purchase a new home with USDA loans. I thought the USDA program was only for first time home buyers? D Clayton – High Springs, FL

Answer: Yes you can! Any qualified buyer can use the USDA program to purchase their next home. The program is not reserved only for first time homeowners.

Question: Is there any USDA loan restriction on how long I must live in my home, or when I can sell my home? B. Gadsden – Port St. Lucie, FL

Answer: No, the USDA mortgage does NOT have any prepayment or early payoff penalty. You can pay off your loan and/or sell your home whenever you like without restriction.

Question: is there a limit on how much income my household can make each year with the Rural Development program ?  Where do I find this information? L. Bolden – Brandon FL

Answer: Yes, each county has a different limit based on a verify of factors  – number or members in the household, elderly and disabilities. Please click the underlined link to read more about USDA income limits in Florida.  Please remember, the USDA income limits apply to ALL members in the household that generate income, Not only the parties on the loan application. If your income appears to be close to the limit, please contact us so we can formally review with you.

Question:  My income is currently under the USDA Collier County limit right now, what happens if I get a raise at my job and my income goes over the limit in the future?  J. Carney – Marco Island, FL

Answer: The only concern is your household income at the time of closing, not in the future.

Question:  What kind of credit score do I need to pre qualify for a USDA loan?  J Duval – Sarasota, FL

Answer: We currently require a minimum credit score of 640.  However, this min credit score requirement does not guarantee USDA financing. USDA Rural housing has other requirements in place for borrowers that have any past bankruptcy, foreclosure, or short sales.  Mortgage qualifying requirements have changed drastically over recent years, and still are. Contact today for the latest approval requirements.

Question: I understand the USDA loan is 100% financing. But I have some money saved up and I would like to contribute a down payment, can I do that?   K. Stanford – Spring Hill FL

Answer: For sure! USDA will permit buyers to put 3%, 5%, etc down payment if they choose. However, the program is geared toward buyers that do not have the means ( down payment) for a conventional home loan.  If you have 20% for a down payment for example, you will do a standard conventional mortgage.

Question: My realtor informed me that I cannot get a USDA loan if the house has a pool, is this correct? A. Myers  – Lakeland FL

Answer:  Pools are permitted with the USDA program. However, the value of the pool cannot be included in the appraisal, this can cause a problem in some cases with the value. Click here to read more about USDA loans and pools  ( Note: this rule will likely be changing in December 2014 to include pools in appraised value)

Question:  I found a property I would like to write a offer on today. But the house is located on a dirt road and my lender said USDA program requirements will not permit this.  Can you clarify this for me before I submit my offer. J Spencer – Homosassa FL

Answer: USDA follows HUD handbook requirements on road guidelines. Basically the road must provide safe vehicle and public access from a public or private road.  Additionally, all roads are required to have an all weather surface and maintained by a road maintenance agreement by all home owners on the street or homeowners association.  Some dirt roads (county maintained especially) are fine and generally approved.  Please contact us for additional clarification.

Question: Can I use the 100% USDA loan to purchase an investment home?   W. Quinn – Palm Coast FL

Answer: USDA can only be used to purchase a primary residence. Second home and investments properties financing are not permitted.

Question: I have determined that my area in Lee County is eligible for the USDA housing.  What do I need to get together for the USDA loan application and approval process?  G. Miller –  LeeHigh Acres FL

Answer:  Please click here to read about being prepared for your USDA loan application.

Question: I have my USDA housing application complete and have already started looking at houses online.  Do I need to use a certain realtor for this, or will any real estate agent work?  L. Allen – Sarasota FL

Answer:  Any realtor will be ok, just be sure they are working for you and you are happy with them.  If you need assistance, let us know, we would be happy to make the connection for you. We have great partnering realtors throughout Florida that understand USDA loan well.  Read more about Realtors by clicking here

Question: I was told that the USDA loan takes a real long time to close, is this true? K. Russell – St. Cloud FL

Answer:  As of September 2014 – the entire process in Florida takes about 35-40 days from full contract to closing. These turn times can change, so contact us for updates.  Unlike other loans, USDA loans go through a two part approval process with the lender and the actual USDA Rural Development office.  Because of this, the process will take a week or so longer when compared to conventional or FHA home loans.  Small price to pay since the program is 100% financing and has greatly reduced monthly mortgage insurance.

Question: How are the interest rates on USDA loans compared to other mortgage programs like FHA, etc?  A. Franklin – Tavares, FL

Answer:  USDA 30 year fix mortgage interest rates are pretty much in line with all the other government mortgage programs like FHA and VA loans.  However, USDA loans have significantly lower monthly mortgage insurance (PMI) when compared to FHA loans.  In fact the monthly mortgage insurance ( known as annual fee)  is nearly three times less when compared to FHA loans. The FHA loan is currently 1.35% (max 96.5% financing) and the USDA RD program is .50%.  This is important to remember and is a big benefit of USDA loans.  Even if you have savings and can do the FHA loan, you may want to consider the USDA loan due to the reduced mortgage insurance costs. Interest rates do change on a weekly, and sometimes daily basis until the homebuyer is locked in. Home Buyers will typically lock in their interest rate once they have found the perfect home and have a contract and set closing date.

Question: My realtor informed me that the USDA property eligibility map was changing October 1st 2014. Many locations that are currently eligible for the 100% USDA program may not be in the near future. Can you clarify?  M. Broward – Kissimmee, FL

Answer:  This is a great question, and a very important one! As of 9/2/2014 – The current USDA eligible approved map (approved housing area) is set to change Oct 1st 2014. After Oct 1st 2014 there is expected to be a change especially in the surrounding communities outside of Orlando, Jacksonville, Tampa and others. To avoid any interruption in the event of a change, buyers want to insure they are under full contract no later than 9/15/2014. Remember, it takes the lender a few weeks on average to underwrite the loan file and send to USDA for final commitment. Once the file is received by USDA (before Oct 1st) the subject property address is protected of any map changes.. even if you close after Oct 1st. Please bookmark the blog and check back for any updates regarding the map changes. Also feel free to contact us with any questions.  The current USDA approved map can be found here. Please note, this does not impact any homeowners that already have a USDA loan and want to refinance to a lower interest rate.

Question: Do you have a USDA mortgage payment calculator or some place I can figure up my monthly mortgage payment?  E. Sanders – Lake Placid, FL 

Answer:  For sure, just visit http://www.usdamortgagesource.com/blog/ and look down at the lower right side of your screen. There you will find a USDA monthly payment calculator that will include principal, interest, monthly taxes, home insurance, monthly mortgage insurance. Tip – be sure to add 2% to your loan amount to factor in the 2% USDA guarantee fee that will be rolled into your loan. Example: if you are purchasing a $150,000 home at 100% financing with no down payment, be sure to input $153,000 for your loan amount.

Question: I currently have a USDA loan, what are my options to refinance my loan  into a lower rate? Unfortunately I do not have any equity in my home.   L. Sanders – Ocala FL

Answer: Please click here to learn about the USDA Pilot Refinance program available here in Florida.

Do you have a question about the USDA loan application or lender pre approval process? Let us help by calling ph: 904-302-6060 or submitting the short request form on the right side of your screen →

Serving Florida & Georgia, please be sure to visit our main site at www.UsdaMortgageSource.com for basic program details.

Purchasing a home not located in a USDA area? Learn about the FHA home loan by clicking here.

Frequently asked USDA RURAL Housing Loan questions, Q&A, 2014, 2015

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September 2014 USDA Interest Rates

Low interest rates

The beginning of September brings us low USDA mortgage interest rates, pretty much the same as last month. Rates over the last 30 days have been at their lowest level in all of 2014. Rates are staying the low 4% range depending on loan program, credit score, etc.  It’s a great time to take advantage of the USDA 100% financing here in Florida.  In addition, those homeowners that currently have a USDA mortgage should learn about the USDA Pilot Refinance program while interest rates are still low.  The USDA Pilot refi program allows homeowners to refinance into a new low rate regardless of loan to value – learn more about all the USDA Rural refinance FAQ’s here.

 

Questions about current USDA home loan rates?  Just submit the quick form on the right side or call ph: 904-302-6060

September 2014 USDA Interest Rates

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