liverichly

You're welcome!

Hey there! Your screenname sounds familiar but I can't quite put my finger on who you are. All things considered, if you qualify for both, then USDA will result in a little lower monthly payment than FHA will. The interest rates are the same, if not identical, but USDA has a 1% guarantee fee (can be financed) whereas FHA has a 1.75% upfront mortgage insurance premium (also can be financed), and USDA has an annual guarantee fee of .3% whereas FHA has an annual mortgage insurance premium of .55%. FHA allows you to buy anywhere, whereas with USDA you have to buy in rural areas that aren't too populated. Your loan officer may have already provided the website for you to check, but if not then it's https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do and click on "Single Family Housing Guaranteed", then "Accept", and then finally it'll bring up a map where you can enter in addresses or zoom in and look at the USDA eligible area boundaries. USDA does 100% financing whereas FHA requires a minimum of 3.5% down. With USDA, if the home appraises for higher than the purchase price, then you can increase your new loan amount and that difference is applied towards your closing costs. So, for example if you are buying a home for $250k and it appraises for $255k, and you have $10k of closing costs, then you can get a $255k loan amount to pay for $5k of the closing costs so you only have to pay the remaining $5k of the closing costs out of pocket. Those are the biggest differences between the two.

You're welcome. I hope it all works out for you!

Thank you for the additional info and sharing more about your situation. It sounds like you’re doing a lot of things right. Regarding relocation assistance, while I can’t speak to every program out there, there are sometimes grants or financial assistance options for individuals relocating due to disasters. FEMA’s programs are often tied to staying within the affected state, but some nonprofit organizations or state-level housing authorities might offer broader assistance. It may be worth reaching out to the Michigan State Housing Development Authority (MSHDA) to see if they have programs for incoming buyers who have been displaced from disaster areas. For down payment assistance MSHDA is a key resource and I believe their programs would be OK with the BK seasoning. MSHDA isn't the only down payment assistance program though, just one of the better ones for the state of Michigan, and it requires your household income be within a certain level. There are national down payment assistance programs that don't require income to be within certain levels though. Your sons could also potentially help. The son with an 800 credit score could co-sign if he can document at least 1 year of schooling prior to his employment. The son with a steady income of $52,000 could help as well, and he can immediately obtain a credit score by becoming an authorized user on your credit card that has at least 6 months of history. With your planned transfer to Grand Rapids and the accompanying raise, your income will qualify as long as you can get a transfer letter stating all of the specifics (transfer date, new location, job title, rate of pay). If either of your sons are relocating away from their place of employment, their income would also need to continue afterwards as well. Since you’re open to living near Byron Center, USDA financing could still be a great choice if you find a property in an eligible area, which Byron Center is but as soon as you go north towards Grand Rapids it changes to an ineligible area. FHA loans, with their 3.5% down payment requirement (or covered through down payment assistance or a gift), is a good backup option. Finding a real estate agent familiar with Grand Rapids and its surrounding areas could help, as they can often connect you with trusted loan officers. Look for professionals who are responsive and take the time to educate you about your options. Hope this information helps. Feel free to reach out with additional questions.

Hi Lynn, USDA mortgages are 100% financing, but require you to buy in a rural area. https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do is the website to search for eligible areas, or you can always reach out to a mortgage loan officer and they can look up where the eligible areas near where you want to buy are. Anyplace on the below map that isn't shaded in orange is an eligible area.. If you want to buy in one of the orange shaded areas then FHA financing can be obtained with just a 3.5% down payment + there are down payment assistance programs that can cover the entire 3.5% down (even some assistance programs that will give you money towards the closing costs too, although at this time of year sellers are usually willing to pay those for you). Both USDA and FHA financing will be OK with the amount of time since your BK discharge. You can only use the income from people who will be on the mortgage, but both USDA and FHA financing work with lower credit scores, so there is a chance he might be able to go on the loan and then his income could help you qualify. In order use your current $42k/year of income to qualify to buy a home in Michigan the income must continue after you move to Michigan, so if it's a remote/work from home position that is perfect. If you have to work at a physical office then they'd need to transfer you to a local office within commuting distance of the new home you'd be buying. The counseling education certificate from Fannie Mae HomeView isn't required for FHA or USDA financing but it looks good to an underwriter, so you'll want to provide that to the loan officer you eventually select to help you out.

I'd check out AMEX or Discover, they both offer personal loans. I'd avoid financing the renovations with credit cards. Do you own real estate and are you willing to take out a HELOC on your property to finance the renovations for your MIL's home?

That rate on FHA is high for those scores - should be closer to 6.250%. At a $410k sales price the 3.5% down payment would be $14,350. If the total out of pocket will be $24k then that means there are $9,650 in closing costs. Depending on where in the U.S. the property is that might be in line or not, it's tough to say. You'd have to share the Loan Estimate to get more precise analysis.

FHA requires a 3.5% down payment, so whatever the sales price is it'll be 3.5% of that. $24,000 is 3.5% of $685k (roughly). Is that the amount you are trying to get pre-approved for? A 6.7% rate is on the higher side for FHA, but it's normal for conventional these days. What are your and your daughter's credit scores?

You're welcome. Nice choice in automobile. FHA loans don't have an income limit, so someone making a lot of money wouldn't disqualify them. If they didn't want to use FHA financing and had their heart set on using conventional instead, then you could be a non-occupying co-borrower on the loan with your daughter. Your income + debts and her income + debts would be used to determine what she could qualify for. When owning other real estate the calculation isn't so straightforward, you'll need to supply tax returns and housing payment related documents for the homes you own, along with standard documentation of your own income (whatever the source is - W-2, self-employment, retirement, etc).

Understood on his debt, he created it so he can deal with it. The excess funds from the sale of your home that aren't being brought in on the new home also count towards your reserves. The rates for shorter term loans aren't that much lower (usually about .125% for a 20-year and .250% to .375% for a 15-year) and even though you plan to pay it off much sooner than 30 years having the option to make a lower 30-year payment in any particular month in case it's ever needed could be helpful. Sounds like you'll be in a good position to move forward in just your name when the time comes.

If the tax lien has been filed in the same county they are buying in, then they'll need to switch their financing type to FHA. FHA has loan limits, however, so if they are financing more than the FHA loan limit in their county then it made sense why they applied for conventional financing instead. FHA loan limits can be looked up at https://entp.hud.gov/idapp/html/hicostlook.cfm - select the state, type in the county name (or don't, it's not a requirement), and then hit "send" and it'll bring up something that looks like the below (the below is for counties in California, where I'm at). If they are purchasing a house, then it'd be the "one family" limit. Two, three and four family limits refer to if they were purchasing a duplex/2-unit, triplex/3-unit or quadplex/4-unit property and living in one of the units. The FHA county loan limit varies depending on the HUD median sales price in that county (or MSA, in the situation of a major city like San Francisco, Los Angeles, Chicago, Atlanta, Charlotte, etc.), but all counties will go up to at least $498,357. Keep in mind that is the loan limit, not the sales price. Sales prices have no limit. MSA Name MSA Code Division County Name County Code State One-Family Two-Family Three-Family Four-Family Median Sale Price Last Revised Limit Year SAN FRANCISCO-OAKLAND-BERKELEY, CA 41860 36084 ALAMEDA 001 CA $1,149,825 $1,472,250 $1,779,525 $2,211,600 $1,595,000 01/01/2024 CY2024 NON-METRO 99999 ALPINE 003 CA $503,700 $644,800 $779,450 $968,650 $438,000 01/01/2024 CY2024 NON-METRO 99999 AMADOR 005 CA $498,257 $637,950 $771,125 $958,350 $388,000 01/01/2024 CY2024 CHICO, CA 17020 BUTTE 007 CA $498,257 $637,950 $771,125 $958,350 $284,000 01/01/2024 CY2024 NON-METRO 99999 CALAVERAS 009 CA $498,257 $637,950 $771,125 $958,350 $375,000 01/01/2024 CY2024 NON-METRO 99999 COLUSA 011 CA $498,257 $637,950 $771,125 $958,350 $367,000 01/01/2024 CY2024 SAN FRANCISCO-OAKLAND-BERKELEY, CA 41860 36084 CONTRA COSTA 013 CA $1,149,825 $1,472,250 $1,779,525 $2,211,600 $1,595,000 01/01/2024 CY2024 CRESCENT CITY, CA 18860 DEL NORTE 015 CA $498,257 $637,950 $771,125 $958,350 $280,000 01/01/2024 CY2024 SACRAMENTO-ROSEVILLE-FOLSOM, CA 40900 EL DORADO 017 CA $763,600 $977,550 $1,181,650 $1,468,500 $635,000 01/01/2023 CY2024

I ran the numbers and your income alone should be fine to execute your plan. I used your $73k/year salary and $35k/year of bonus income, used the new car payment along with your son's car payment, added $400/mo for misc. debt payments (student loans and credit cards) and the DTI is coming out to around 42.5% if you use a 7% interest rate. Anything up to 45% usually has no problem qualifying, assuming credit is solid, which 700+ scores are considered. Debt ratios all the way up to 50% can qualify for conventional financing if there are enough compensating factors (30% down & having plenty of money in the bank afterwards are both considered strong compensating factors). To answer your other question, the car loan payment isn't included in your DTI if it'll be paid off by the time you close on the mortgage. The only exception is a car lease, due to having to give the car back at the end of the lease and new transportation would immediately be needed. As far as your hubby's credit cards, if you don't pay them off with the equity after you sell, then what is the other plan to pay them off? What are the interest rates on the credit cards? If you don't use the sale proceeds to pay the cc debt off, then what else are you going to do with that money to make more money? Keep it in savings? Invest in stocks? I ask because having debt costs interest, so if you aren't going to eventually use the equity to pay them off then you should find a place to put that money so it makes more than the interest on the credit card debt. Otherwise paying off the credit card debt might make the most sense financially.

Someone with a tax lien can still qualify for a mortgage as long as they've set up a payment plan and payments have been made on time. The easiest types of mortgages to get approved for in that situation are FHA, VA and USDA financing, however Fannie Mae loan programs will also allow someone with a federal tax lien to remain unpaid at closing as long as the lien wasn't filed in the same county as the home that's being financed. Do you know what type of financing they were trying to qualify for?

Could be tough with a 120+ day mortgage late, but I'll check around for you.

Oh, yes, I misunderstood and thought you had purchased the home all cash. What MM/YY were the mortgage late payments and were they all 30-day lates or did any of them go 60, 90 or 120 day late? How much do you owe on your existing mortgage balance now?