Jan 11
19
How To Get The Maximum Arizona USDA Loan Size
What’s The Maximum Loan Size For a USDA Loan in Arizona?
You’ll be happy to know that the Arizona USDA Loan does not have a maximum loan size, which may be another advantage USDA has over it’s FHA counterpart.
The maximum loan size you can get will actually be determined by your qualifying repayment income.
Here is a simple 10 step process that you can use to ESTIMATE the maximum USDA Loan size you might qualify for. Today’s post is pretty detailed and all about math, so you may need to review it a couple times.
And we’ll use some example numbers, say an annual income of $50,000 with $575 in monthly debt payments for things like credit cards and auto loans.
Step 1 – Determine your Annual Income – in our example… $50,000
Step 2 – Verify that your annual income is within the allowable limits. You can find the current limits on the usda rural home loans dot com website.
Step 3 – Determine your gross monthly income. So just take the amount from Step 1 and divide it by 12. – In our example that would be $4,166 as our monthly income.
Step 4 – Determine the maximum monthly payments for ALL debt, including student loans in deferment. Use 0.48 as the factor. So in our example the maximum amount for all debt would be 0.48 times $4,166 which gives us $2,000.
Step 5 – Determine the maximum monthly MORTGAGE payment for your new USDA Loan. We use 0.38 as the ratio. So in our example 0.38 times $4,166 gives us a maximum mortgage payment of $1,583.
Step 6 – Subtract the monthly debt payments from Step 4. In the example that gives us 2,000 minus 575 for a total of 1,425.
Step 7 – Determine the maximum allowable total monthly mortgage payment, and that is just the smaller of Step 5 or
Step 6. In our example that would be 1,425.
Step 8 – Now you’ll need to estimate how much the monthly property taxes and hazard insurance would be. As a general rule, 1.2 percent of the property value will give us a good amount. In this example we’re going to look at a 150,000 house so will estimate the monthly taxes and insurance at $150.
Step 9 – Determine the principal and interest portion of the maximum monthly USDA Loan mortgage payment. So just take the number from Step 7 and subtract the number from Step 8. This will give you the maximum principal and interest portion of the payment that you would qualify for. In our example we have a maximum total payment of 1,425 with taxes and insurance of 150, so the maximum principal and interest payment would be 1,275.
Apply for a USDA Loan Online Now: Loan Application
Now for the fun part, Step 10 – use a USDA mortgage calculator to estimate the maximum loan size by using the number from Step 9 as a reference for the maximum principal and interest payment. I have a terrific mortgage calculator over at usda rural home loans dot com that you can use for this. For our example, it looks like our guy would have no problem qualifying for his 150,000 house.
I hope you found this Arizona Home Loan tip useful and would love to hear your comments.
To find out if you qualify for a USDA Loan call (520) 225-0380 or click on the Get Started on USDA tab above and ask for a quote. If you want to go ahead and get your application in, you can fill out my Arizona Home Loan Application Online here.
Similar Posts:
- Arizona USDA Rural Home Loans – What’s The Maximum Loan Size?
- USDA Loans Have Lower Monthly Payments Than FHA AZ Mortgages
- Is A USDA Home Loan Really $21,236 Cheaper Than An FHA Home Loan?
- How To Find Out If Your Income Qualifies Under The USDA Loan Income Limits
- How Much Can I Borrow WIth A USDA Rural Home Loan?
