The USDA Guaranteed Home Loan Program in Maplewood is backed by the USDA – the United States Department of Agriculture.
It is a TRUE no money down home loan in Maplewood. Many people who take advantage of this program are able to get into their homes with little to no money out of their pocket.
BUT, there are several USDA Loan eligibility requirements in Maplewood that you need to meet in order to take advantage of this home loan program.
USDA Loans in NJ Requirements Explained:
The first requirement is that you cannot be a current homeowner.
If you already own your home but are planning to sell it, then you are still eligible in Maplewood! You just need to have your existing home soldBEFORE we can close the loan for your new home.
The next requirement is that your total annual household income cannot exceed the limits set by the USDA.
These income limits are based on market area and family size.
Another requirement is that you cannot have defaulted on a USDA loan in the past.
This means that if you’ve had a past USDA loan that has gone in to foreclosure, you unfortunately aren’t eligible.
How to take advantage of USDA Loans in NJ:
To take advantage of this program, the home has to be located in an eligible rural area.
But guess what, rural does not necessarily equal country! Homes do not have to be in a country setting.
In fact, there are many areas where entire counties and cities qualify for this program. The property has to meet minimum USDA Loan property standards.
The home must be in satisfactory condition, and this loan cannot be used to finance any sort of income producing property.
That means mini farms, and properties with farm acreage are not USDA Loans eligible.
2019 USDA Loan Eligible Areas in NJ: Map to Eligibility
Hey this is Chris the Mortgage Pro. In this video we're comparing conventional loans to FHA loans to VA loans which one's the best one? Which one's right for you? You know so many consumers are curious. Which loan is best for me? Today I want to help you figure out which one is going to benefit you and your family the most, for you a short-term and/or long-term goals because it's different for everybody. Now there are advantages to each one of these loans so some have lower interest rates, some have lower fees there's all kinds of different things to think about! Now most people have a tendency to just look at one thing. The payment! Which is cheaper? Well, it's understandable when you're buying a house you say, hey which which payment is cheaper? But, again how long you gonna be in that house? Is there PMI? Will the PMI disappear? When will it disappear? If the PMI is gonna disappear in five years butI'm gonna be here in 20 years, maybe this other loan is better a long term! So we have to look at these things as a whole. Now people ask you all the time what's today's interest rate? It's impossible to answer that question, because your finances and every person's finances are as different as fingerprints! When we look at the whole situation you have to understand that all these items, represent different risks to the lender and the higher the risk the higher the interest rate! The lower the risk for example if you put a lot more money down, obviously a lower risk right? Or if you have a higher FICO score lower risk, right? Well we have to look at these things as a whole to help you determine what interest rate you're gonna get and that also helps determine which program is right for you! Okay now it's time we're gonna get into the nitty-gritty we're gonna get into the comparison. Number one - conventional loan. A conventional loan has a minimum of a 620 FICO Score Credit score if you're not sure what a FICO score is that is your mortgage credit score. Now on an FHA loan some lenders go as low as a 500 my company goes down to a 550 the truth is nobody gets approved at 500 anyway and on a VA loan we're also looking at the same thing many lenders go to 500 company goes to 550. Okay PMI mortgage insurance and on FHA it's called MIP mortgage insurance premium now on a conventional loan what happens is it is very very dependent on what is your credit score somebody with a very high credit score might have a very low mortgage insurance payment, but if you have a 620 FICO score your mortgage insurance payment could be way high. Now on FHA FHA has pretty much standardized, here is your MIP rate remember they're the same thing they just call them something else here's your MIP rate it doesn't matter if you have a 620 a 580 a 550 or 800 FICO score makes no difference you're gonna pay the same rate. On a VA loan great news no PMI no MIP you got that one. Okay we're almost halfway through the video so hit the subscribe button and hit the like button I appreciate that now if you'd like to comment, I will answer every single question personally and of course you're welcome to share this with anybody you think it's valuable for! Okay Debt ratio! A debt ratio is the percentage of your gross. Gross income is before they take taxes out. A percentage of your gross income to your debt. Now on a conventional loan with a high FICO score they're gonna allow you or a 50% that includes your car payment your credit cards student loans alimony child support all those kind of things plus the new house payment, that should be no more than 50% now if you have a lowerFICO score, it's probably gonna be 45% that's how conventional works. Now let' stake a look at FHA with a 580 FICO score or above, here's what's basically going to happen. You're gonna probably be approved to a 56. 99%let's call it 57%, again that includes all your debts plus the house payment as a payment. Lastly we have a VA loan. Now a VA loan works very very different it looks at how much money is left over after paying all this stuff. And it's called residual income and everybody depending on what area of the country you live in and how many people in your family there's a certain formula for it. Now if you have 20% more than that just to give you an example if it was a thousand dollars but you have 20% more $1200 and a high FICO score you may even go up to 60 or 65% debt ratio which is unbelievable and its highest in the whole industry. Interest rate on a conventional loan you're often going to hear Fannie Mae, Freddie Mac those are conventional loans. On a conventional loan you are gonna have a higher interest rate than either FHA or VA. Onan FHA loan it's lower than conventional and right about the same as VA they have virtually the same interest rates. Down payment on a conventional loan you're usually looking at a 3% down payment. People ask me about a conventional loanFannie Mae Freddie Mac yes those are conventional loans. Now if we look at anFHA loan an FHA loan is gonna require a three and a half percent down payment as long as your FICO score is 580 or above. If it's 579 or below it requires a 10%down payment and of course for our veterans who honorably served, we thank you! You get a zero percent down payment loan. Okay so we talked about PMI, MIP mortgage insurance whatever you want to call it. But there's also something called upfront mortgage insurance. Now on a conventional loan there is no up front mortgage insurance, but those of you with a high FICO score might want to pay some, and they eliminate the monthly PMI payments forever,. So that's a big deal and that's only available on a conventional loan and it doesn't make sense unless you have a really good FICO score. On an FHA loan we take the loan amount and multiply it by 1. 75 percent we have to add that to the loan amount. Simple example - if you have a hundred thousand dollar loan 1. 75 percent is $1,750, we're gonna add that, so you'd actually be borrowing $101,750 upfront mortgage insurance. On a VA loan there's a couple of different scenarios here the first time use of a VA loan it's 2. 15%so on that same hundred thousand dollars it's two thousand one hundred and fifty dollars added on on a second time use it's three point three percent so that's three thousand three hundred dollars now it doesn't sound like the end of the world but if you're taking a four hundred thousand dollar loan and it's a second VA loan that's three point three percent that is $13,200, that may make you say mmm this other loan might be better. Now though lastly if you're a veteran who happens to be disabled 10 percent or more there is no upfront mortgage fee that there is no VA funding fee it doesn't exist for you. Okay seasoning from bankruptcy many Americans through the last few years they've had a hard time and they did file a bankruptcy on a conventional loan 4 years must have elapsed from the discharge not from when you started but from when it was finished before you're allowed to apply for a conventional loan. On an FHA loan it's only two years and on a VA loan it's only two years. Short sale seasoning. Well a lot of people ask what's a short sale? Well at a time when people owed more than the house was worth, they often went to the bank and said, hey my house is worth three hundred I owe four hundred and the bank accepted three hundred thousand dollars. That was called a short sale. Well if you have a conventional loan if you want to apply for a conventional loan it would be four years after a short sale. For an FHA loan it's three years must have elapsed from the time of the short sale and for a VA loan it's only two years. Again Vets win, they earned. A foreclosure well yes some people went into really hard times on a conventional loan we are looking at seven years before you can buy a home againOn an FHA loan it's only three years and For the vets - two years from a foreclosure okay Time back to work after an extended absence. Well on a conventional loan there is actually no real time frame but the lender will take a look they just want to make sure it's reasonable and everything is considered as a make sense situation you can be back to work for one month after or six months or a year off. On an FHA loan FHA guidelines require six months back to work with pay stubs proof they've been back to work for six months before they'll accept that income. On a VA loan it varies perl ender some lenders will accept right back to work some might want six months or three months a lot of them will require just get past the probationary period on the job and you're good to go. Occupancy on a conventional loan you can buy for a rental, you can buy for a second home if maybe you want to live in the mountains or down by the beach on the weekends or obviously for an owner-occupied property. For a FHA and VA loan it is owner occupied.
hey this is Rich from Rich on Moneytoday we're going to talk about VA loans how to get a VA loan everything about VAloans I'm going to get through quickly before I do that let me first talk alittle bit about Who I am again my name is Rich Carey I have a website calledwwww rich on money. Com and it's a website where I talk about real estate Ihave 20 properties that are paid off they're all in Alabama I've collectedthem mostly while serving overseas in the military as I talk about how I dothat on my website I have a conservative conservative approach to investing andto real estate and I kind of talk about all that stuff on there so if you wantto be awesome I recommend subscribing to my blog andsubscribing to this YouTube page also give this a video a thumbs up if youlike it and I'm going to talk about this VA loan stuff today so um leave me acomment about what you're planning on doing with your va loan whether youalready have one or you're just trying to get one or where you're planning onbuying a house just let me know what your situation is I'd love to know allright here we go let's get into it how to get a VA loanwhat is a VA loan a VA loan is a it's a mortgage that helps veterans finance thepurchase of a home with good learn good loan terms in an interest rate they'retypically better than what you'd see on other mortgages VA loans are notactually made by the VA they're made by lenders you know just random lenders abunch of different lenders out there will give VA loans the VA is the onethat actually gives a guarantee the VA and the VA doesn't guarantee the wholeloan a lot of people think they guarantee the whole thing the VAguarantees about 25 percent of the loan that gives but that gives the lenders alot more breathing room to give you a lower rate to give you no moneyand you know just to make it easier for military members to borrow money and sothere's no there's this thing called a yeah where I got to find the name ofthat thing County loan limit and the county loan limit for most locations is484 is that right yeah 484 thousand dollars three hundred and fifty that'slike the max you can ball no money down without having to put some extradownpayment on top when you get into more expensive areas it's actuallyhigher than that like Honolulu Denver it goes up to seven hundred twenty-sixthousand dollars and there's a chart that you can link to on my website thattells you what it might be for your area if you think yours might be higher thanthe 484 but there's no limit to how much you can borrow but there is a limit tohow much you can borrow without needing a down payment so I just kind of wantedto point that out who can get a VA loan well you know something there's likethis list of criteria if you are it's open to veterans active duty servicemembers National Guard reservists and there's just like this list of differentthings depending on you if your active duty then you've served at least 90consecutive days during wartime or 181 days during peacetimeyeah six years of service the National Guard you have a spouse of a servicemember who has died in the line of duty like you can go on the website and lookup and see if you think you can get a VA loan and then what you really need to dothough is get a Certificate of Eligibility a CoA and you're gonna getthat from by talking to a lender or that there's actually three different ways toget a Certificate of Eligibility but that's real you'll actually know you'llknow that you're good and you're gonna and that you can get a loan and you canget that three different ways you can apply online using a VA ebenefits portalyou can apply through a VA approved we can apply by mail using a form 26 - 18 8 0 and you have to provide like some proof that want certain documents andthen when you have a Certificate of Eligibility you know you're good to geta loan so who can qualify for a VA loan I guess I mean like income and createyou know credit score I'll say credit score of 620 is about what you needthat's pretty low if your credit score is like a lot lower than 620 I don'tthink you should be trying to get a house loan you should probably be tryingto fix whatever's going on with your financial situation and worrying aboutgetting a house later but 620 can get yourself a loan the theaverage the national average of 699 so it's lower than the national averagethere isn't an income threshold but they want to see stable income and they wantto see if you have enough money left over at the end of the month to pay yourbills and do different things like that you'll be able to like I mean you shouldget pre-approved just like you would for a normal conventional loan go getpre-approved for a VA loan and then you'll have an idea where you stand Iwant to give you the pros and cons of a VA alone some pros there is no privatemortgage and certain insurance no PMI you have to pay those are catch to thatlater but usually if you have less than 20% down you got to pay private mortgageinsurance and that's kind of expensive well that doesn't exist with VA loanshooray next Pro low interest rates they can be as low and then they sometimescan be lower than a conventional loan that's because of the guarantee that theVA can give and that's awesome no money down is usually higher risk but becauseof the guarantees the VA is they guarantee 25 percent of the loan up to acertain limit they can afford to give us low lower interest ratestotally awesome thank you VA thank you government the next Pro I want to talkabout no money down that's a big one being able to finance a property that nomoney down is a huge blessing it can get very interesting because you can even dono money down on a two Plex three Plex four Plexand you can live in that you have to live in it actually you can live in thatfour Plex as long as you live in one of the units you can actually rent out theothers and take those all as income in fact the income from those other eunuchscan actually count towards you qualifying for the loan boy that'sawesome another pro no prepayment penalty now it's kind of rare to haveprepayment penalties this days but VA loans never have prepayment penaltieshere's a con or a bad part of getting the VA loan I said there's no privatemortgage insurance all right but there is something called a funding fee and sothey're gonna get you right they're gonna get you they they're gonna you'regonna pay you know at least a two point one five percent fee on the entire loanif you're gonna be no money down that can be rolled into the loan but you'regonna pay that so that's kind of like another form of a PMI private mortgageinsurance not super excited about that but it's the price to pay to fund the VAand to have no money down that can become lower I think as you pay 10% of20% down but I would argue in that case you might as well just go with theconventional loan the next con I want to talk about is a VA appraisal a lot oftimes when you buy a house with a mortgage the lender is going to order anappraisal and they're gonna make sure everything's hunky-dory this isdifferent than that this is a VA appraisal they're a little more analabout it they're looking for different things they want to make sure the houseis like safe and they're like they actually won't allow the house to be inbad shape at all like it can't be a fixer-upper if there are a lot of thingsthat are broken they will let you close so they're more strict than a normalappraisal would be and if they find things they don't likethey're gonna make somebody fix it before closing so there's two problemsthat the VA appraisal can can can cause for you one is they can make you theycan find a bunch of things that have to be fixed before closing and slow down orprevent the loan from going through number two is the appraisal can come intoo low and that can cause you to have to bring more down payment to the tableto get the loan closed just a problem with the VA the VA appraisal appraiserscan I've heard can be a pain in the ass there's just something to think aboutagain a quick pause to plug myself again if you're enjoying this please like itplease share it tell your friends tell your family rah-rah-rah give me like athumbs up on the youtube there and leave a comment for me thank youthe VA loan process I'm gonna go through like the loan process pre-approvalfinding a property putting a property under contract and underwriting you wantto get pre-approved you just like before you go out and find a property and makean offer you get a letter from the bank saying we've already looked at this guyand we're pretty sure that he qualifies for at least this much money and soyou're gonna have to give them a bunch of your you know w-2s and tax forms andinformation up front so they can give you this like pre-approval letter andyou'll want to do that then you want to go out and find a property which meansyou want to work with the real estate agent should you work with the realestate agent because you got a payment big fat Commission yes you should butyou want to find a very good real estate agent and make sure that they're earningtheir money that 3% to 6% they're gonna know that 3% they're gonna get half ofthe 6% at 3% they're gonna get make sure they're earning it what I've done a lotof my career is I've told real estate agents you're not meeting my needs andif you're not meeting them I'm gonna find somebody else and in some casesI've went and found somebody else they're gonna make a lot of money fromyou so make sure you're happy with them and if you're not happyreal estate agents don't sign something that that means it can't change agentsor something don't don't sign that exclusivity paperwork or whatever theywant you to sign that just tell them like look if I'm unhappy with you I'mgonna I'm gonna change it's just like a common very common sense thing but youneed to go out and find that property you need to put the property undercontract that's the next part of the process putting it under contractinvolves you having certain contingencies right you can say I wantto buy this house and so here's my offer and we're gonna put this under contractbut I'm not gonna buy it unless the following things I'm not gonna buy itunless the VA law or the VA appraisal comes in high enough I'm not gonna buyit unless I do another inspection and I make sure that there's nothing wrongwith a house that I can't accept I'm not gonna buy it you know unless I getfinancing right you can put in these contingencies and that's very importantwith putting the property under contract then there's the underwriting processthe underwriting part is like it's under contract now the real magic happensnow the paperwork gets going now the lender orders the the VA appraisal whichis that thing that I actually you know I've told you is a little bit scarysometimes so that all goes on while the while the appraisal is going on andyou're going and you're finding out that there might be little things that haveto be fixed you can ask the seller to fix it or maybe he's gonna say no andyou have to fix it or maybe you got to walk away while that's going on they'relooking at your financials and they're like oh wait this looks funny give usmore information about this and whenever they have a question you seem to getthem that information very fast so it doesn't slow anything down the next partof the process when they're happy with the appraisal happy with all thepaperwork then you can go to closing right here's the thing I like to talkabout I never go to closing you can go to the closing if you've never been to aclosing a man is what go to wine it's kind of interesting I guess the firsttime it's not interesting that the the third or fourth or fifth timeI don't go to closings you know you can have like your real estate agent that'srepresenting you or somebody else just you can have a power of attorney thatsays you can sign for me and you don't even go to the thing and I don't evenbother going anymore they're all there are alternatives to VA loans and I'lltell you about some of them there's something called an FHA loan an FHA loanis something where you can get is something that's available to everybodynot just military members that meet certain criteria and it's only threepoint five down if you qualify for it so it's something you could check on lookinto it and you have to have at least a 580 credit score which is really low andif you don't have 580 then you got to put 10% down and you do need to pay PMIright 1. 75 percent up front and in in a monthly payment on top of that so theyget you on PMI but three point five down payments not bad then there's somethingcalled a USDA loan a USDA loan is actually called the section 502 singlefamily housing guaranteed loan program it's a zero down payment mortgageavailable in qualified rural or suburban areas it's actually available in about97% of the country the 3% is not available in is essentially in bigcities right every super you know high populated areas essentially like ifyou're in a fairly big city it's probably not available there you shouldcheck check if it's available in your area USDA loans so you can qualifyit's for it's for families that are low to moderate income so you should be likemaking less than a hundred thousand to qualify for this type of loan theyactually want people to be under a hundred thousand to qualify for this notover there's a conventional loan and I'll tell you why I like a conventionalloan in some cases over a VA loan I like a conventional loan because if you havethe 20% down you won't pay the private mortgage insurance and you won'tthe funding fee that's like two point one five percent with the VA law so onthe long run you'd save money over the long run with a conventional loan and20% down over you know a VA loan and you would have put some equity into theproperty and some people are nervous about not putting equity into a propertyme being one of them and buying stuff no money down interest rates of the VAloans they're gonna be lower because of the guarantees that VA is able to giveso that's great and you can refinance with a VA home loan there's twodifferent types of refinances you can do you can do a cash out refinance I thinkyou have to pay point five percent funding fee for that or actually no Ithink it's higher I think it's a higher fee that is you need to pay a prettyhigh you need to pay a higher fee for the cash out refinance they might belike the same the same fee as the original and you got to fill a bunch ofpaperwork you gotta do the the inspection again but you can pull cashout right if the house is worth a hundred thousand more then you do arefinance for the new value of the house and you get a brand new loan but youkeep that you can keep the extra equity as cash and then spend it wherever youwant and that's awesome actually I wouldn't do that but some people mightsay that's awesome they could take the money and do something else some peoplewould take the money and invest in more real estate and they grow faster andthat might be a smart move but if you spend it on like you know whiskey andhookers then that might not actually be a good idea male or female hookerseither one you know equally bad so there's also something called aStreamline refinance interest rate reduction refinance loan I think I saidrefinance try it twice the Streamline refinance also known as interest ratereduction refinance loan that is the one that has a very low fee you just pay thepoint five percent funding fee and then like some verysimple closing costs I think you don't have to order an appraisal becauseyou're not pulling cash out you're simply refinancing to a lower rate itcould happen very fast it's very easy go for itlast point I'm gonna make please like this please subscribe please go to mywebsite and check it out give me some comments last point I'm gonna make youcan assume a VA loan this is very strange but you can assume a VA loanwhat does that mean if I had a VA loan I could let somebody else who wouldqualify for a VA loan assume that loan from me they could take over thepayments take over my interest rate take over my monthly payments and take overthe balance of the loan for me and it would just transfer to them instead ofthem getting an entirely new loan and just like you know me paying off my loanand them getting a new loan literally could just change the loaned over tothem they could assume my loan that could be very lucrative if I got my loanthree or four years ago and that interest rates have went up a lotthey're higher now I could sell somebody a loan that has a lower interest rate sothat's very interesting something to look intoone thing you two things you want to make sure of you want to make sure thatthe bank releases you you know the responsibility to repay the loan if youdo this and you want to make sure that the VA gives you your credit back sothat you can get a VA loan somewhere elseonce you've transferred this VA loan to somebody else the two things you want todo that's everything I have on VA loans in this blog post and on this videotoday I hope it's been helpful this is rich on money signing out.
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