Got approved for a USDA but have questions

[Anonymous]

I was approved for a USDA loan up to $103,000.

I really want to get this house I like, it has everything I been looking for! The question is I know there are out of pocket/up front costs.

Earnest money I have to pay $1,000

What other out of pocket costs?

I know I may have to have 2 months mortgage payment reserves.

When do all these costs have to be paid? I will have $3500 in hand but not until Late January/early February. Is there anyway I can get the process started without having to pay much. I do have $1,000 in cash I can use for earnest money.

My Loan officer said I needed to pay off some credit card balances, do I really need to since ive already been approved?

[SSTO]

My LO pre-qualified me for the USDA loan a couple of weeks ago.  I didn't want to be pre-approved yet because I didn't plan on looking until next year.  He said that it looks like I'd be approved for up to $130,000.00.  When I asked about the earnest payment, he said not to worry because I don't have to pay anything up front with the USDA loan.  Are you sure that you'll need to pay the earnest fee? It seems on here that some people pay and some don't need to.  I'm worried about out of pocket costs too with the USDA loan, as I really don't have much saved. 

[newmomnewme]

Bump, I would like to hear the responses to these questions as well. My mortgage broker submitted my "review" approval application last week, then I get pre-approved from a lender, then make an offer, then back to USDA???

[Anonymous]

With USDA loans, the down payment and some closing costs can be financed through the loan. Your LO should be able to tell you of some possible out of pocket expenses, such as the the home inspection. The home inspector needs to be paid at the time of the home inspection.

This is a great website explaining earnest money deposits:

 http://www.realtor.com/home-finance/homebuyer-information/understanding-the-earnest-money-deposit.as...

As for the credit card balances, these are probably conditions from the lender. They will approve the loan under these conditions ( you pay off these cards, get them some additional documents, etc). They may come back with more and more conditions as the loan moves forward. When I bought my house, we had new conditions coming back from the lender every few days, and it pushed the closing back an entire month :/

You should really ask your LO about all of these things, they should be able to explain the out of pocket costs involved with a price range of these expenses for your area. 

[Ms-Thang38]

we are in the process of buying a home USDA in GA...the only money we have/will spend is about $1,000 for appraisal...inspection... & earnest money...we are waiting for ou file to be sent to UW with USDA..

[maghome]

I just closed on a USDA loan on Friday. My lender was out of state (Florida) I live in Ohio. I did everything online. I had to pay $500 earnest money, appraisal $455, and home inspection $450 upfront. You can ask the seller to pay for closing costs. My seller wouldn't. My lender gave me a credit of $1500.00 and I only had to bring $1600 to closing. The home I bought was $141,000. So if you can get the seller to pay for closing costs including prepaids you will not have any out of pocket expenses. I did not have to pay off credit cards but my dti was less than 30%. Hope this helps.

[newmomnewme]

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@maghome wrote:

I just closed on a USDA loan on Friday. My lender was out of state (Florida) I live in Ohio. I did everything online. I had to pay $500 earnest money, appraisal $455, and home inspection $450 upfront. You can ask the seller to pay for closing costs. My seller wouldn't. My lender gave me a credit of $1500.00 and I only had to bring $1600 to closing. The home I bought was $141,000. So if you can get the seller to pay for closing costs including prepaids you will not have any out of pocket expenses. I did not have to pay off credit cards but my dti was less than 30%. Hope this helps.

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@Anonymous @ maghome. My broker sent my package to USDA last Thursday or Friday.....I am looking to purchase new construction and was told that the builder can't break ground until the weather warms a bit. Do you think I will have to resubmit everything?? Or will the do an appraisal without the house being built? 

[Anonymous]

I am told by my realtor I need $1000 earnest money because it is a HUD owned home, When do I pay this $1000? Also I am being told I have to pay an appraisal fee which is a few hundred dollars. When will I need to pay this? I want to get the ball rolling o purchasing this home but right now all I have is the $1000, I will have around $3500 at the first of February. Should that be enough time to start the process now?

[Anonymous]

I had to pay $500 earnest, $425  home inspection/terminte, and $450 appraisal.  Keep in mind if there is an issue on the apprasial and the appraiser needs to go back to reinspect it is another $150 each time.  

[sunnysideup]

We are in the process of buying a house with a USDA Guaranteed loan.  We had to pay $1000 earnest money because we are buying a Homesteps property and that is what they required.  We had to pay that in a certified check to the seller's realtor once our contract was accepted.  The appraisal fee had to be paid a few weeks later when we started the paperwork process.  Our appraisal fee was $485.  We also had to come up with $60 for a termite inspection since the one that the seller had on the house was more than 60 days old.  As of right now, that is all we have had to come up with, but it was all within a very short time frame.  It all had to be carefully documented, and we could not use a credit card for any of it.  We had to show bank statements, cancelled checks, etc. to prove where it came from. 

Each lender has their own requirements, policies, etc.  Their underwriter might require something that USDA doesn't necessarily need.  There can be other hidden fees in this process.  For example, the house we are buying uses propane.  We were fortunate with this house to have a seller who was willing to provide a tank and fill it with the minimum amount at their cost, but at the previous house we tried to buy, the seller was unwilling and we were going to have to come up with $800 to install a propane tank (because they require everything in the house to work for the USDA appraisal - including heat, water, etc.) and fill it with propane.  Also, think about the fact that once you close on the house, you might have hook up fees or utility costs to get things running.  Fortunately for us, we will be using the same utilities as our current residence, so most of ours will just be a slight transfer fee rolled into our next bill.  Last, some people have said they have to come up with a certain amount of money to fund the escrow for the insurance and taxes.  We only had to have three months, and they are rolling ours into the loan.  At closing, we will get the appraisal fee and earnest money back, but they roll it into the loan.  Good luck!!!