USDA Direct Loans a Good Option?

I got turned down by a bank for a USDA direct loan. I am making between $2600- $3000 a month with about $ 250 in debts. My credit was 743, but the bank said my DTI was too high, and some income couldn't be verified. Is it a hassle to apply for a USDA direct loan? As in a lot of red tape? Landlord is selling the house I am living in soon, and I don't want to rent any more..

1 Answer

  • 2 months ago

    Unless you looking for a specific loan, you can't get turned down for DTI.Before selecting a home, you need to get pre-approved.  This will tell you home much you are allowed to borrow. 

    You haven't mentioned what your verifiable income is.  Let's pretend it is $2600 a month.  That would allow you to purchase a place for up to about $93000. 

    - If you were considering buying the property you are currently residing in, if the purchase price is more than $93000 = your DTI is too high.  This takes into account the expenses you will incur when you own the house, not the $250 you owe right now.

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