Step 1 of the USDA Loan Process: Pre-Qualify with USDALoanInfo.com
A pre-qualification provides an estimate of what you can afford based on the information you provide to your loan specialist. It helps to have a USDA Loan Checklist on hand when going through the whole process.
A typical pre-qualification only reviews the credit of an applicant and not their income documentation.
It gives you a starting point for what purchase price you can afford. After-all you are joining the buying instead of renting group!
Step 2 of the USDA Loan Process: Receive Your Pre-Approval Letter
A pre-approval is a much more comprehensive process. All of your income documentation will be thoroughly reviewed.
Once you are approved and receive your pre-approval letter, sellers are more likely to take your offers serious as you have taken the necessary steps to ensure a smooth loan approval process.
It is important to note that a pre-approval doesn’t guarantee a USDA loan.
There are often stipulations that must be met in order to close and fund a USDA loan.
Step 3 of the USDA Loan Process: Find Your Dream Home
Once you’re pre-approved, the next step is to find a knowledgeable or experienced realtor and start the home search.
It is important to let your loan specialist know what agent you are working with and what properties you are interested in.
Your specialist will be able to determine whether the home is in an eligible area and if you can be approved for it.
Step 4 of the USDA Loan Process: Make An Offer
After you have found your home and your loan specialist has researched the property, it is time to make an offer.
Your agent should already be aware that you are using a USDA loan and should prepare your offer so that the seller pays all closing costs.
If you cannot negotiate closing costs into your offer, know that the USDA loan program does allow gift funds from family and non-family members to pay for closing costs.
Additionally, if a home is bought for less than the appraised value, the instant equity in the home can be used toward closing costs or repairs.
Step 5 of the USDA Loan Process: Processing and Underwriting
Once your offer is accepted and a contract is signed by all parties, your lender will need to set up an appraisal of the property to ensure the dwelling meets USDA home loan standards.
If a property does not meet standards, it must be fixed before closing.
During this time an underwriter will review your information to ensure that there have been no major changes since the pre-approval.
Once underwriting approves the loan and all closing conditions have been met, a closing date will be scheduled.
Step 6 of the USDA Loan Process: Closing and Moving In
At closing, you’ll sign paperwork, finalize your USDA loan and take ownership of your new home.
Congratulations all that’s left from here is to move in.