Home Loan Process : Here are the steps to take when buying a home

Call USDA Home Loans Direct with your questions?

1. Contact one of our Lenders to make an application for your home loan. Here they take down your basic information and find out what your goals are. What areas do you want to live in? How much do you want your payment to be? Do you want to buy a new home or build a home?

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2. Get Pre-approved: Here you will receive a letter of credit approval. This means that you meet the preliminary requirements to secure a loan with the USDA. The purpose to get pre-approved in advance is to find out what you qualify for and so that you can manage your expectations. Also, in order to write a contract on a home to buy or build you will have to have an approval letter.

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3. Start looking for a home that fits within the approval parameters. We will put you in touch with one of our local USDA agents to help you find a home or builder to build a home. You will meet with the agent to look at a list of home, discuss what your needs and wants are and start the quest from there. The USDA loan is available in small towns, cities and communities. It’s also available on the outskirts of major metropolitan cities. With the USDA loan eligible properties are single-family homes, townhomes, condos, modular homes. Mobile homes are not eligible. Homes with swimming pools, major repairs, flood zones will be difficult get financing for.

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4. Once you find a home that you want to buy, you will make an offer on the home. If your offer is accepted you will sign a sales agreement with the seller or builder. This is when the loan process begins. In most cases you will be required to submit some sort of good faith money to show your sincerity in buying the home. This money can be refunded to you at closing.

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5. USDA Loan is prepared. Here we gather your documents to start preparing the loan. You will submit tax returns, pay-stubs, and bank statements, W-2'S. A USDA loan application will be sent to you for signing. You will sign this and send it back to us.

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6. Inspections will be done on the property. General property inspection, termite inspection. If the home has a well and septic these will have to be inspected as well. Appraisal is ordered. Assuming all inspections came back satisfactory we will order appraisal. The appraisal is a very important part of the process. It will determine how much the home is actually worth, site any potential hazards, affirm that you are not overpaying for the property.

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7. Loan gets submitted to a USDA underwriter. Here they review everything to make sure the loan meets all the qualification requirements. This process takes about two weeks

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8. Get a commitment letter from the underwriter. This means the loans is approved and there are conditions that need to be satisfied in order to close. We will contact you to satisfy those conditions

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9. Loan is cleared to close. This means everything has been satisfied and the loan can move into closing. Loan gets submitted to USDA for review to get the Guarantee on the loan. You go to closing to sign the final paperwork. You will go to the title company or real estate attorney’s office to do the closing. Such companies as Stewart Title, Chicago Title or a local real estate attorney office. The real estate attorney will go over the loan documents with you, we will send the funds to the real estate attorney to give to the seller or builder. Once all the documents have been signed your loan will be funded and complete.

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10. You move into the house. Closing is complete; you are given the keys and title to the property. You will generally skip one to two months of house payments after closing. Your loan will be serviced by with Chase Bank or Wells Fargo. You can make your payment to them directly by simply walking into your local branch, set up online payment or auto draft.