Akfheapohfeoahfdlkhc xlayfo e you gotta be kidding me!!!! *UPDATE* usda loan thread

[SurelyYouJest]

How does an expense reimbursement count as income? Unless you don't pay to have her on your insurance. If they take the money out of your check the money they give her to cover it is not income.

 

[highland145]

Anyone else see the issue with this: If you make less money, you don't have to worry about PMI (which is insurance against not making mortgage payments). But if you make more than enough money you have to have insurance. Is Cuda and I the only ones who think this is assbackwards?

Edit: Also what the hell is the USDA doing in the mortgage business? Are you buying farmland?

Yes, ass backwards. I never denied someone a loan for making too much $$.

 

[pauldun170]

Health Insurance benefits are part of compensation. If the employee opts out of coverage, the portion that the employer would normally contributes to coverage is paid directly to the employee.

 

[pauldun170]

Yes, ass backwards. I never denied someone a loan for making too much $$.

http://www.usdaloanagency.com/what-is-a-usda-loan/

The USDA loan is designed for those buyers who do not qualify for other financing and do not have adequate housing.

The OP doesn't seem to fit that criteria since they already own a home and that they qualify for traditional financing.

 

[Juddog]

How about the OP goes with a conventional loan and just fronts 20% since he makes so much? It sounds like you are trying to scam the system by getting a loan made for poor folks even though you make a lot of money.

 

[jagec]

How does an expense reimbursement count as income? Unless you don't pay to have her on your insurance. If they take the money out of your check the money they give her to cover it is not income.

Money that gets deposited into your bank account is income. End of story. Just because it gets spent right away doesn't make it different.

OP, you need to figure out EXACTLY what factors into the income calculations. Would upping your 401k contributions, as suggested above, work? How about selling some Apple stock and taking the capital loss?

 

[Cuda1447]

How about the OP goes with a conventional loan and just fronts 20% since he makes so much? It sounds like you are trying to scam the system by getting a loan made for poor folks even though you make a lot of money.

I don't know why you are assuming I make so much money? I don't have 20% to put down right now. The USDA Loan isn't made for poor folks either. Besides, I'm only over the income limitations by $300 for the year, so you're telling me since I make $300 more than 'poor folks' I am some rich guy trying to scam the system? Come on man.

 

[Cuda1447]

Money that gets deposited into your bank account is income. End of story. Just because it gets spent right away doesn't make it different.

OP, you need to figure out EXACTLY what factors into the income calculations. Would upping your 401k contributions, as suggested above, work? How about selling some Apple stock and taking the capital loss?

I checked on 401k contributions, student loan payments, education expenses etc... none of those will lower the income they count.

 

[Cuda1447]

2 Things -

Can you reduce your income through any donations or deferals (sp)?

2 -

Why would you buy a house without having the 20% + fallback money? What if you get the house and you find problems??

There are lots of good reasons to buy a house without 20% down. Hell, I can make a case for buying a house with 0% down as being financially more prudent than buying a house with 20% down.

Just as an example, everybody that bought a house with 20% down in 2006... how'd that work out for them? They immediately lost that money/equity when the house market blew up. If you didn't put that money down though, you could just walk away from the house.


All of that said, our reasoning. We don't have 20% saved up. We didn't want to wait another year or two to save it up when the housing market and interest rates are likely to go up in that period. We make enough money to afford the mortgage payments, we just don't have the 20% saved up.

 

[Ricky Spanish]

I wish I had such problems.


:\

 

[SlickSnake]

The most meaningless and ridiculous topic title ever that has nothing at all to do with the meat of the topic.

This just F'n sucks. AGHAGHLEIAHGEOAHGOEGHAOGEAGUIEIOA;LHL

LOL, wut.

Go buy a nice RV and park it someplace scenic. Problem solved.

 

[Tweak155]

There are lots of good reasons to buy a house without 20% down. Hell, I can make a case for buying a house with 0% down as being financially more prudent than buying a house with 20% down.

Just as an example, everybody that bought a house with 20% down in 2006... how'd that work out for them? They immediately lost that money/equity when the house market blew up. If you didn't put that money down though, you could just walk away from the house.


All of that said, our reasoning. We don't have 20% saved up. We didn't want to wait another year or two to save it up when the housing market and interest rates are likely to go up in that period. We make enough money to afford the mortgage payments, we just don't have the 20% saved up.

I didn't mean you necessarily had to put the 20% down, I just meant you should have that much saved up at minimum. If you can get a deal with no PMI and a low interest rate, that's great. But part of what helped me get 2.75% was the 20% down payment on this house, so that helps too.

It sounds like you PLAN on letting the bank take the problem for you buying an overpriced house (if that's what ends up happening). That's just irresponsible.

 

[DrPizza]

Just a mathematical thought - while it'll cost you $2500 extra for PMI (is that figure accurate?) Don't forget that if you have your wife forgo the $100 a month, that you're really only coming out $1300 ahead each year, since you're giving up $1200. (Adjust for taxes as you will.) If the gets rid of that $100 a month - will she be able to get it back in the future?

Alternatively from that, can you "share" commissions with a coworker - give him credit for some of your sales this month, he makes more money now - and he gives you credit for a couple sales next month. He comes out ahead, and you come out ahead.

 

[pmv]

Would acquiring more dependents help? Have a child or formally adopt some ATOTers?

 

[DrPizza]

I didn't mean you necessarily had to put the 20% down, I just meant you should have that much saved up at minimum. If you can get a deal with no PMI and a low interest rate, that's great. But part of what helped me get 2.75% was the 20% down payment on this house, so that helps too.

It sounds like you PLAN on letting the bank take the problem for you buying an overpriced house (if that's what ends up happening). That's just irresponsible.

WHY should he have that much saved up? "Well, because, how dare you want to buy a house that you can afford the payments on, without spending a couple of years wishing first, and putting money into a savings account."

I have no clue where you got the speculation that he's buying too expensive of a house for his budget.

Though, it brings up a question - the OP is selling his house? OP, does this mean you have so little equity in your current house that after it sells, you won't have enough to cover 20% of your new house? Certainly, you must have some equity that would at least allow you to get a chunk of that 20% - so you wouldn't end up paying that PMI for too long.

 

[Cuda1447]

WHY should he have that much saved up? "Well, because, how dare you want to buy a house that you can afford the payments on, without spending a couple of years wishing first, and putting money into a savings account."

I have no clue where you got the speculation that he's buying too expensive of a house for his budget.

Though, it brings up a question - the OP is selling his house? OP, does this mean you have so little equity in your current house that after it sells, you won't have enough to cover 20% of your new house? Certainly, you must have some equity that would at least allow you to get a chunk of that 20% - so you wouldn't end up paying that PMI for too long.

We do have equity in our current house. We also had budgeted for some renovations and repairs on the new house, so we had a good portion of that money set aside.


As for the guy you quoted... yea I'm basically ignoring him now. I don't know why he thinks its 100% necessary to have 20% saved up. It would be silly to wait 2 years to buy this house and when the prices appreciate 10% each year (or even 5 if we scale it back some) and then we are just losing out on all that equity. Granted, our house would appreciate more during that time, but still.


All in all though, we can afford our new house just fine. We could put down ~ 10% if we really wanted, but had only intended on doing 5% at most, saving the rest for fixing up a few things that need to be done to the house.

As far as the PMI goes, yea will probably have to pay it for 2-3 years I figured. Not the end of the world, but certainly wasted money. In addition, I REALLY don't trust whichever bank ends up with my loan to be all friendly and nice when it comes time to get rid of my PMI. From my understanding of how the process works you CAN have PMI removed once you reach 20% LTV. However, the bank doesn't HAVE to remove the PMI. The only negotiating chip I would have is threatening to refi somewhere else. And that only works if rates are similar or lower a few years from now, unlikely. In addition, if I did go that route and they called my bluff, I'd have refi costs which is even more wasted money.

Instead I was hoping to just make $300 less this year and qualify for the USDA loan we wanted and not have to deal with all this other crap.


Plus, even if we get PMI removed, our interest rate is still going to be .5% higher with a conventional than with the USDA loan. More wasted money cause we make $300 to much, haha.

 

[Cuda1447]

Just a mathematical thought - while it'll cost you $2500 extra for PMI (is that figure accurate?) Don't forget that if you have your wife forgo the $100 a month, that you're really only coming out $1300 ahead each year, since you're giving up $1200. (Adjust for taxes as you will.) If the gets rid of that $100 a month - will she be able to get it back in the future?

Alternatively from that, can you "share" commissions with a coworker - give him credit for some of your sales this month, he makes more money now - and he gives you credit for a couple sales next month. He comes out ahead, and you come out ahead.

We don't have enough time to wait for another month and the commission check to roll in and bring my earnings down. Believe me, that was a thought.

 

[Tweak155]

WHY should he have that much saved up? "Well, because, how dare you want to buy a house that you can afford the payments on, without spending a couple of years wishing first, and putting money into a savings account."

I have no clue where you got the speculation that he's buying too expensive of a house for his budget.

Though, it brings up a question - the OP is selling his house? OP, does this mean you have so little equity in your current house that after it sells, you won't have enough to cover 20% of your new house? Certainly, you must have some equity that would at least allow you to get a chunk of that 20% - so you wouldn't end up paying that PMI for too long.

I don't see it as spending a "couple years wishing" first. If you're at the point in life where you're ready to a buy a house and you don't have money set aside (20% is not asking a lot) and it will STILL take you years to get to 20%, perhaps buying a house isn't the greatest idea.

I honestly don't care what people do with their money as long as they aren't making other people pay their bills. It is just a suggestion to avoid stressful times. Getting all defensive about someone suggesting having extra money is just another sign you shouldn't be buying.

 

[Cuda1447]

I don't see it as spending a "couple years wishing" first. If you're at the point in life where you're ready to a buy a house and you don't have money set aside (20% is not asking a lot) and it will STILL take you years to get to 20%, perhaps buying a house isn't the greatest idea.

I honestly don't care what people do with their money as long as they aren't making other people pay their bills. It is just a suggestion to avoid stressful times. Getting all defensive about someone suggesting having extra money is just another sign you shouldn't be buying.

I just want to have a conversation. I'm not defensive. Try to see my point for a second.

In my opinion, it is financially smart to buy, even if you don't have 20% down and here is why.


In my area, house prices have risen nearly 15% year over year and are expected to continue at that pace. Let's use fictional numbers here. Let's say the house I am buying is 200k. If it rises in value 15% the next year, it will rise in value to 230k. Now if I'm being totally honest, I think home prices rising 15% year over year is ridiculous, but that's whats predicted in my area. But let's cut that in half. Let's pretend it raises 7.5% to a value of 215k. In that one year, I have in essence made $15k. I did that by putting down 0% (under USDA guidelines). So now I have made 15k on a zero dollar investment. In addition, I kept money on hand. Let's pretend I had 20k on hand for a 10% down payment if I wanted. I keep that money in the bank, which is a buffer in case something happens. In addition, that money can also be invested and earn interest.


If I choose to wait till I have 20% down. Let's look at what I would miss out on. Same scenario. Let's pretend it takes 2 years. 7.5% increase year over year, for an increase in sale price of the house 30k. So now I've saved up, 40k (from 20k) but the house is going to cost me 30k more. So I've esssentially LOST money. All that, by being patient and waiting for my 20%.


This is not taking into account rising interest rates either. Which will cost you even more money.

In a rising market, waiting till you have 20% down is not only not necessary, it is financially stupid.

Most people assume we are in a rising market and have rising interest rates. So it is financially sound to make the purchase with 0% down, or 10% down rather than waiting even a year.



Now just to play devils advocate. If I were buying this house in a market I expected to go down, it is also silly to put 20% down. First of all, you really shouldn't buy in a market you expect to go down. But let's just pretend you do anyway. You buy a house in 2006, the market goes down to 2009 levels. You have to move across the country for a new job, sick family member, whatever. You need to sell your house and you are going to take a loss on it. Well if you put 20% down you've lost ALL of that equity you had. So you've essentially, literally lost $40,000. If you had put 0% down and kept that money in the bank, you could short sale the house and walk away while still keeping that $40,000 in the bank.



In short, there is not a single good reason to put down 20% even if you have the 20% to put down, in these scenarios (No PMI etc...).

The only consideration you need to make when purchasing the house is whether or not you can afford the payments etc. The amount of money you choose to put down has no bearing on that. So when you say things like "If you can't afford to put 20% down, you shouldn't be buying this house" I feel it is extremely short-sighted and just pop-financial advice. It's something you've probably read in a magazine and just reiterate to be true, without actually thinking about the 'why' behind things.


I mean no disrespect with any of that. And if you disagree with me, I am open to the conversation.

Cheers!

 

[Tweak155]

I just want to have a conversation. I'm not defensive. Try to see my point for a second.

In my opinion, it is financially smart to buy, even if you don't have 20% down and here is why.


In my area, house prices have risen nearly 15% year over year and are expected to continue at that pace. Let's use fictional numbers here. Let's say the house I am buying is 200k. If it rises in value 15% the next year, it will rise in value to 230k. Now if I'm being totally honest, I think home prices rising 15% year over year is ridiculous, but that's whats predicted in my area. But let's cut that in half. Let's pretend it raises 7.5% to a value of 215k. In that one year, I have in essence made $15k. I did that by putting down 0% (under USDA guidelines). So now I have made 15k on a zero dollar investment. In addition, I kept money on hand. Let's pretend I had 20k on hand for a 10% down payment if I wanted. I keep that money in the bank, which is a buffer in case something happens. In addition, that money can also be invested and earn interest.


If I choose to wait till I have 20% down. Let's look at what I would miss out on. Same scenario. Let's pretend it takes 2 years. 7.5% increase year over year, for an increase in sale price of the house 30k. So now I've saved up, 40k (from 20k) but the house is going to cost me 30k more. So I've esssentially LOST money. All that, by being patient and waiting for my 20%.


This is not taking into account rising interest rates either. Which will cost you even more money.

In a rising market, waiting till you have 20% down is not only not necessary, it is financially stupid.

Most people assume we are in a rising market and have rising interest rates. So it is financially sound to make the purchase with 0% down, or 10% down rather than waiting even a year.



Now just to play devils advocate. If I were buying this house in a market I expected to go down, it is also silly to put 20% down. First of all, you really shouldn't buy in a market you expect to go down. But let's just pretend you do anyway. You buy a house in 2006, the market goes down to 2009 levels. You have to move across the country for a new job, sick family member, whatever. You need to sell your house and you are going to take a loss on it. Well if you put 20% down you've lost ALL of that equity you had. So you've essentially, literally lost $40,000. If you had put 0% down and kept that money in the bank, you could short sale the house and walk away while still keeping that $40,000 in the bank.



In short, there is not a single good reason to put down 20% even if you have the 20% to put down, in these scenarios (No PMI etc...).

The only consideration you need to make when purchasing the house is whether or not you can afford the payments etc. The amount of money you choose to put down has no bearing on that. So when you say things like "If you can't afford to put 20% down, you shouldn't be buying this house" I feel it is extremely short-sighted and just pop-financial advice. It's something you've probably read in a magazine and just reiterate to be true, without actually thinking about the 'why' behind things.


I mean no disrespect with any of that. And if you disagree with me, I am open to the conversation.

Cheers!

It seems you may have missed where I said you don't have to put it *down*, just have it available. You're focusing on an argument I'm not making. Even if you don't throw it into equity, it is money you may need for something missed during inspection, maybe some new furniture, etc.

 

[Cuda1447]

It seems you may have missed where I said you don't have to put it *down*, just have it available. You're focusing on an argument I'm not making. Even if you don't throw it into equity, it is money you may need for something missed during inspection, maybe some new furniture, etc.

Gotcha, I may have missed it. I see your point. I don't think 20% is necessary in reserve cash, but I see your point.

 

[BoomerD]

Akfheapohfeoahfdlkhc xlayfo e

I'm disappointed...I thought this thread was going to be about a vacation in Wales or Iceland...

 

[Cuda1447]

**Update in original post** Now we do qualify for USDA?