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09-27-2012 10:57 PM - edited 09-27-2012 11:00 PM
We called a local credit union (HVFCU) to see what paper work we would need to go in and apply for preapproval. We spoke with him about our financial situation, credit and expectations. He was extremely helpful and gave us some great advice. Then he proceeded to send us to the CU website to fill out an online application for a mortgage pre approval. He told us what to include so our application would not be automatically approved as it has to go to USDA after he does his part. Application was filled and we verified next day everything wennt through and he had received our info.
Now we are a little confused about a few things.
We are worried this might have been a mistake on the LO part and it will delay our home search. Apparently we are being given the run around by agents because we still don't have out preapp. letter. They just won't show us homes until we do... well at least they tell me to forward it to them when I get it "so THEN I can show you homes" We feel my husband's finalcials are solid we've just had a hard time saving as we have to pay rent in NYC + utilities and the rest which can leave you living paycheck to paycheck. So we feel very sure in looking before we are pre approved... we know what we want to afford but just need the reassurance that USDA will be able to guarantee our loan.
Should he have requested papers from us? Do you think this will delay us?
Has anyone had any experience with USDA in NY? The LO told us it should be about a week for us to get the pre approval...our biggest fear is that is not a true pre approval and it might not "count" to local agents to show us homes.
They've already pulled his report (CBC INNOVIS - we believe that's what it was) 4 days ago.
any imput would be greatly appreciated.
09-28-2012 09:00 AM
The USDA has nothing to do with pre-approval. Your lender should either pre approve you or not, based on their knowledge of USDA requirements. From what I see, you would be fine for USDA as long as your income wasn't too high for your county/area. Lenders can get an automated preapproval from USDA, but they don't have to from what I understand.
However here is what I would do if I were you. I would google and find some mortgage outfits in your area or state that specialize in USDA loans. They will probably specialize in FHA, VA, and USDA, but that's fine. You want someone who knows what they are doing. And unless a LO and underwriter does a bunch of USDA loans, they are clueless on the process. Find a USDA specialist and work through them. The requirements are all the same, as is the low rate. With what you provided, you should have absolutely no problem locking down a USDA loan. But you have to work with someone who knows the process or it will end up like mine. It will drag out and they will continually ask you for documents because they aren't prepared for the USDA submission process. I am in the middle of it myself, so please take my word for it.
09-28-2012 10:40 AM
We called around to different places on the "approved lenders list" and the few realtors we spoke to told us they were the people to go in the area as they do most of the USDA loans in the area we are looking for homes.
I thought USDA had to approve the amount they were willing to guarantee for us? We want a 200k home but know we can afford a little more so we are worried we will get a house for say 215 and then not be approved. I think I might just be stressing it. The LO told us which papers they require and to have them ready so we can just send them right over once we find a house and make an offer. He told us what to expect to be approved for the area and our income. The maximum income guidelines are 93k for that area so we should be fine....
He claims to have been USDA loans for years and told us we didn't need to worry at all just be patient.
Hopefully everything else runs smoother the rest of the way for you.
09-28-2012 11:11 AM
That seems to be a little backwards from what I experienced. My lender needed a property address in order to preapprove me. So I had a couple showings and before I could make an offer on the house we like, I went and got preapproval which was pretty painless. This circumvents the issue you are having. With your credit outlook, a preapproval won't be an issue.
Also, to see how much USDA will approve you for (a rough guideline), USDA typically limits the house PITI to 31% DTI. There are waivers to get more than 31% DTI, but as a general rule, you can determine how much USDA will allow you to borrow.
09-28-2012 11:17 AM
Chaz, I think its more of a 29/41 DTI
09-28-2012 11:24 AM
I'm so new to all this... is DTI WITH mortgage right??
our CC are reporting a $100/monthly payment. SO if say my husband has a montly gross of 6500 they would approve us for say around $1900 mortgage (including insurance and taxes ). That would put us at 31....
We were informed to get the pre approval BEFORE we look at homes. So we didn't love a 200k but the USDA only thought we could afford 180k.
Let's see how this plays out... thanks!