Many Florida Lake and Volusia County homebuyers with limited cash savings are drawn to the USDA RD mortgage. The USDA Rural home loan is one of the few programs that still allows buyer to purchase a home 100% financing here in Florida. So, what is the trick for prequalifying For USDA loan, exactly what are the steps are involved in the for USDA loan pre approval process?
Before we dig too deep, it’s important to understand exactly what a “pre qualification” and “pre approval” actually mean in the mortgage world. USDA pre qualification means that based on the information you the buyer has provided to your USDA mortgage specialist, you generally meet the guidelines that are set for USDA home loans.
This is sort of generic since none of your underwriting documentation (paystubs, assets, W2, and tax returns) is verified at this point. A basic loan pre qualification just gives you the buyer a good idea on whether or not you can obtain an USDA approval and the approximate dollar amount. The loan officer will tell you based on your credit, debts and income if you are likely to be approved and for how much.
Now, the USDA pre APPROVAL process gets into a little more detail. During this USDA pre approval process everything is verified. To get your USDA loan pre approval you will first speak with an USDA loan officer either on the phone, online or face to face. The loan specialist will ask you a few general questions to get an idea about your current situation, your goals, your income and the amount of funds you will have when it comes time to close on your new Florida home.
The loan officer will ask:
Monthly Income: This is the amount of total household income from all borrowers that will be on the USDA loan. If you will be the only person on the loan, then only your income will be used. Keep in mind; this is the monthly gross income, the income before any withholdings are deducted. Income will be verified by pay stubs, W2’s and tax returns for the past two years.
Your Current Employment Status: Along with how much income you make each month, your USDA loan specialist will want to know the nature of your job, what you do there and how long you’ve been at your current employer. USDA mortgage pre approvals generally ask for approximately two years of current, full time employment. If you have part-time income in addition to your regular job, be prepared to provide two years worth of part time income from that job as well. All job history will be verified by standard employment verification.
Savings and Assets: Your USDA loan officer will also prequalify you based upon the amount of money needed to close on an USDA loan plus allow for additional closing costs that may be associated with the new USDA loan. This amount doesn’t necessarily mean how much money you have in your bank accounts today, but how much you will plan on having when it comes time to close on your new home. Furthermore, this doesn’t mean you need money saved up as the USDA loan is 100% financing. It just depends on your home purchase contract and the details. However, like all other loan programs, the USDA program requires closing costs. These closing costs can be paid by you the buyer, or the sellers.
Ok, now that we discuss the difference between USDA loan pre approval and pre qualification, let’s talk about what should home buyers be doing …. and NOT doing once pre approved. First, home buyers do not want to change employment without talking to their loan advisor first. Your USDA loan pre approval is strongly based on your current employment. In addition, if your income changes ( up or down) please relay this information to your loan advisor ASAP. Applicants also want to insure they don’t purchasing anything big, charge up credit cards, or take out any new lines of credit. All of these things could significantly impact your debt to income and the loan pre approval.
To get your full USDA loan pre approval, all it takes is a little time and answering a few questions. Once you have determined that you’re ready to make the move and apply for a 100% USDA mortgage, your loan advisor will then begin the documentation process that will complete the USDA application process.
Questions? just submit the short Info Request Form on the right side of this page for fast service. Mobile users can find the Info Request Form here. You can also contact us at 7 days a week at ph: 800-743-7556
Borrowers purchasing in non rural eligible areas please be sure to check into the FHA home loan at www.fhamortgagesource.com
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