We're being booted from our rental because the landlord wants to let his daughter move in and we can't find anything else around here for even remotely the same price. Even rotted out single wide mobile homes are going for $1800/month.
I was turned onto USDA loans by someone and it seems like as long as we make under $65k/year we can qualify for like $336,000 in loans with 0% down.
Is there any catch? The rates seem to start at 3.5% of you're under the $65,000 income limit which would put our monthly payments like $300 below renting.
Is there any catch?
idk much about USDA loans but I will say that owning a house is expensive in the sense that you'll want a larger safety margin in your budgeting than you might otherwise consider if you were renting. Is there room in your budget for 2-3% of the value of your house in maintenance every year? Probably double that for the first few years because unexpected things will go wrong. On top of that, you'll find out about all sorts of minor defficiencies in subsystems and want to dedicate saving for that too even though you won't be addressing/fixing those for a while. The way I was advised to think about it by my boomer parents is that the mortgage payments are the minimum you'll pay every month for the house.
I want to add that none of this is meant to be discouraging, but I found it useful to think about when planning, budgeting, and buying my first house.
It's pretty overwhelming, like I feel like I'm walking towards a cliff of homelessness because of how volatile and agressive the rental and housing market is right now.
Literally every home I see for sale is listed as "sold in 2020 for $160k, listed for sale in 2022 for $375k"
Rentals are even worse with the history being like $800/mo in 2020 and now it's $2200/mo. There's also only like 6 places available in the rental market right now.
Only reason USDA even came up is because of the direct loan program. If we can tick all the boxes there's a chance of getting mortgage assistance and getting an effective 1% interest rate which would put us about $400/month below average rental prices. If we were at market, that interest would balloon to almost 80% of my salary (which is already 4x minimum wage) for a 1300sqft ranch built in 1965...
I believe USDA loans only apply to suburban zones. And Co-op buildings are not allowed.
I remember trying to get a loan for buying a house in a dense urban area (or more dense than suburbia) and I was denied.
Doesn't matter for me because my town is considered entirely rural