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USDA loan applicants must have their loans both prequalified and preapproved before they can fully obtain a USDA mortgage. Through the loan prequalification, the loan underwriter checks your basic information to determine your eligibility. As soon as your loan has been prequalified, your USDA loan application now has to be preapproved and you will have to go through the financial eligibility process. Once completed, your lender will provide you and your realtor with a rough estimate of how large of a loan you qualify for.
Prequalification Process:
One of the very first thing that you have to do is to prequalify your USDA loan application. This will help you understand if you are eligible for your desired property and could possibly hold you back from prematurely applying for a loan you are not eligible to receive. At this point, you're only asked about some basic information or estimates of your finances.
Some common information that would be checked is your credit rating, a rough estimate of the value of the property that you'd like to purchase, your current gross income, and the debts and other assets that you posses.
By going through this process, you will be provided with the necessary information that will help you prepare to find and finance your dream home.
Having your loan preapproved gives you a much clearer picture of what homes you can afford to purchase. That’s the reason why most realtors and sellers alike take your offer more if you have your preapproval letter.
During the preapproval process, your loan underwriter will check your credit history, tax returns and W2, your current pay stubs, employment history or any evidence of your generated income, as well as any of your banking or even investment documents or statements,
Once you have your USDA home loan preapproved, you'll be one step closer to becoming a fulfilled homeowner. However, it's important to know that having your loan preapproved doesn't automatically mean that your USDA home loan application is a guarantee. There are still certain requirements or conditions that have to be met for your loan underwriter to process your USDA home loan. It would be best to coordinate with a real estate agent who knows the USDA home mortgage process to guide you with through the final steps of the loan application process.
USDA guaranteed home loans are made to assist low-income borrowers get their very own home. However, the USDA does have strict limits in order to ensure that each loan is made to assist low income borrowers.
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Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.
