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First timer questions
DH and I are currently going through a pre-approval process. We are applying for the USDA rural 100% financing loan. It has taken a month and a half so far and we still do not have an answer. We have provided all of the request documents (pay stubs, W-2's...) and the loan officer said yesterday that everything is now in the hands of the underwriter. We do not have a house in mind yet. We haven't even contacted a realtor yet or begun to look at any houses (well, except for online) as we are waiting to hear back about the pre-approval.
My questions:
Does a pre-approval normally take this long?
Once we have our pre-approval, what should be the next step? (I assume it's contacting a realtor)
Do we just call the realtor listed on some of the house we like from online? Then they can show us others that aren't their listings? (no one in our family owns a home so we don't have any agents recommended)
If we have the pre-approval process completed, does that make closing a bit easier?
Any other helpful information you can suggest?
TIA!
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Re: First timer questions
Does a pre-approval normally take this long?
I just pre-qualified instead of all the way pre-approval so mine was done that day but my understanding is for full pre-approval it does go to the underwriter. A month and a half sounds like a really long time to me.
Once we have our pre-approval, what should be the next step? (I assume it's contacting a realtor)
Once you have your pre-approval then you will just go and find your house!
Do we just call the realtor listed on some of the house we like from online? Then they can show us others that aren't their listings? (no one in our family owns a home so we don't have any agents recommended)
I gave my realtor a list of houses that I liked and he came back with some similar listing that I might like. Ultimately, I found my house online. I really like redfin if they are available in your city to hunt online for houses.
If we have the pre-approval process completed, does that make closing a bit easier?
Yes, you will have much less paperwork to submit to the underwriter when you actually find a house and should be able to close really quickly. It always looks really good with making offers.
Any other helpful information you can suggest?
Take your time and find a good place that you love. It will be stressful and you might be like me and think there is nothing for you but there is. Remember that flooring and wall colors can easily be changed but that the layout is functional for you. Good luck!
Just to clarify on finding a realtor. Make sure you read some reviews and that they seem to match what you want. Don't just go with some guy who is selling a house you like. I found my realtor through redfin. If they are available in your city then you can see reviews on there. The reviews on redfin are all from people who bought through the site so I trusted them more than anywhere else.
Hopefully someone can answer your first question who has done a USDA loan but we got pre-approved for a conventional mortgage and we had to fill out the mortgage application at that time and they ran our credit but it didn't go to underwriting until we had selected a house and had a contract on it. So as far as pre-approval that took a day, now that we signed a contract on the house it did take about 5 weeks to get through underwriting. So if that's what needs to be done for a USDA loan then that's probably not overly long.
Definitely contact a realtor but I would necessarily contact a realtor selling a house you are interested in because you could get into a dual agent situation (where one agent is representing both the seller and buyers) and it never turns out really well in the end. We found our realtor at an open house. Months before we were serious about buying we hit up open houses just to see what we liked/didn't like and what was out there in our price range. We just really hit it off with one of the realtors, we liked how he approached things, really enjoyed teaching us about houses and the whole buying process (we're first time buyers) and just liked his personality. We did end up finding our house via an open house/online but our realtor did show us a number of houses and really helped walk us through how to look at houses (how to compare different types of sidings, the age of the roof, condition of windows, etc)
Pre-approval does make closing a bit easier in that most of the paperwork is already filled out, you just have to provide more recent paystubs/bank statements. That is if you go with the bank you are pre-approved from. It might be different with USDA, but we just got pre-approved at one bank and then when we had an offer in, we shopped around. It turned out the original bank had the best deal so we stayed with them. It still has taken some time to close (granted we asked for a long closing period, offer in april, close next week since we found the house early and our lease isn't up until July) but that is mostly due to underwriting and we really haven't had to do much at all.
After offer, many of the bank we shopped around with did warn us that the usual 30 day close is sort of a thing of the past. It can be done but now it's usually 45-60 days as the underwriters are really making sure they dot their i's and cross their t's. It didn't matter to us as we had well over 60 days between the offer and when we wanted to move.
Good luck and I'd do some open house browsing now to get an idea of things and perhaps find a great realtor
I didn't think preapprovals took that long-- mine was done in a day. I'm not sure if it is because of the type of loan that you are trying to get though. A month and a half just for preapproval sounds very excessive.
Do NOT go with the realtor who is selling the house that you like! Think about it--> they are getting double commission, so they're not going to be playing for you. They are going to be playing for the seller to get a higher sale price. I suggest asking friends and family for suggestions. We got ours from a co-worker of mine, and we love her.
I read some conflicting stories about dual agents that I found interesting. Basically if you go with a dual seller, they are more likely to push the sellers to accept your offer because they won't have to "share" the commission with the buyer?s agent. Meaning they will get 100% commission. So even if you offer a lower price than say someone who has a buyer?s agent or another realtor, they will get more of a commission from the lower offer if they are the dual agent.
My Blog
Dream of a better world...where chickens can cross the road without having their motives questioned.
My Blog
Dream of a better world...where chickens can cross the road without having their motives questioned.