Qualifying for a USDA Mortgage
Getting a USDA mortgage or qualifying for one has never been easier. There are a few things that you must know before trying to qualify for a USDA loan. They are the following.
1) The first and most important is where you plan on living or buying a home at. There is a property eligibility map on USDA website. Simply Google it and type in the home or location you are looking in to determine if your area is eligible. Most rural cities or rural locations are eligible for USDA financing. If your city is not, then try to see how far you may have to move from where you want to live to determine if USDA is a right fit for you. Sometimes you may just have to move 10-15 minutes from city limits and stay in the town you want to or be a 5-10 minute driver further from work but get the peace and quiet of living in the country and having a nice size yard for the kiddos to play in.
2) The second is how much your combined family makes in yearly income. This one is vital. Typically borrowers whose combined income is over 100,000 dollars a year in Indiana is not going to qualify. There is an income calculator to determine whether or not your family size and income will qualify. Family size is very important. 4 or under usually qualifies for the same income once you get over 5 it allows you to start making more money. You must combine total family income minus minors. You can also deduct child expenses from gross income.
3) The third is finding a lender who knows how to do these loans. Typically it takes about 5-6 weeks to close a USDA loan. Sometimes it can be done in 4 or less. The reason why is that USDA actually issues a final approval once the lender has you clear to close. Once you have a final clear issued by your lender it can take any where from 3 business days to 7-10 depending on how backed up USDA is.
The benefits of choosing a USDA loan over a traditional FHA or Conventional loan is that USDA qualifies for NO DOWN payment. Plus it only has a.35 basis points funding fee monthly where as FHA is.85 and Conventional varies based upon credit score and down payment. USDA loans are becoming the go to mortgage for borrowers who are located in rural areas or USDA eligible areas. Find out if you qualify today!
