The USDA Guaranteed Home Loan Program in Montgomery is backed by the USDA – the United States Department of Agriculture.
It is a TRUE no money down home loan in Montgomery. Many people who take advantage of this program are able to get into their homes with little to no money out of their pocket.
BUT, there are several USDA Loan eligibility requirements in Montgomery that you need to meet in order to take advantage of this home loan program.
USDA Loans in NJ Requirements Explained:
The first requirement is that you cannot be a current homeowner.
If you already own your home but are planning to sell it, then you are still eligible in Montgomery! You just need to have your existing home soldBEFORE we can close the loan for your new home.
The next requirement is that your total annual household income cannot exceed the limits set by the USDA.
These income limits are based on market area and family size.
Another requirement is that you cannot have defaulted on a USDA loan in the past.
This means that if you’ve had a past USDA loan that has gone in to foreclosure, you unfortunately aren’t eligible.
How to take advantage of USDA Loans in NJ:
To take advantage of this program, the home has to be located in an eligible rural area.
But guess what, rural does not necessarily equal country! Homes do not have to be in a country setting.
In fact, there are many areas where entire counties and cities qualify for this program. The property has to meet minimum USDA Loan property standards.
The home must be in satisfactory condition, and this loan cannot be used to finance any sort of income producing property.
That means mini farms, and properties with farm acreage are not USDA Loans eligible.
2019 USDA Loan Eligible Areas in NJ: Map to Eligibility
Hey this is Chris Trapani themortgage Pro! Today I want to introduce you to what is a pre-approval, how doesit work, how do you get one what do I need it for?! Okay here's why you need to bepre-approved! One - you can't go see a house, fall in love with some house andthen find out you're not approved or not approved for that amount. That's reallynot wise on your part and it's really not good for the realtor to show youhouses if he doesn't know you could be a pre-approved. Plus what happens is everyoffer must go to the listing agent. The listing agent will present it to theseller of the house, but if they're not pre-approved well, wheres the pre-approvalletter? Wheres the DU? That's called the desktop underwriter approval goes rightthrough fannie mae's website if you're not approved they're not gonna acceptthe offer but how do they know if you're approved or not so it's really not wiseto do that you're better off going through the approval process with me I'mgonna help you I'm gonna hold your hand it's not that complicated! Okay so people ask all the time what'sthe difference between a pre-qualification and a pre-approvalwell I'm gonna start with what is a pre-qualification here's how it works Ican make a phone call to you we can talk a couple of minutes hey what's yourcredit score Harry oh okay 650 great Harry how much money do youmake great that sounds good what are your debts like Harry okay wecan have this long conversation and I'm gonna ask you all the details do youhave a bankruptcy are you a first-time homebuyerare you married do you have children are you divorced do you pay child supportthey pay out I'm gonna ask you all these kind of questions and you know it takes15 minutes ten minutes or so and I can pre approve you based on my 27 yearsexperience I'm gonna know that you're pre-qualified to buy a house but it'snot the same as a pre-approval. Okay so here's what a pre-approval is you'veanswered all those questions for me already awesome now show me on paperwhat do I mean well you told me that you make $32 an hour on your job I need tosee you pay stubs so I can actually enter it into the computer so we knowexactly and calculate exactly what your income is you told me your credit scorewas a 650 well sometimes I've run it and guesswhat it's a 690 that's awesome even better sometimes I run it when you thinkit's a 650 and you run it off one of those consumer type credit reportagencies and it actually turns out to be a 580 so we need to really know for apre-approval exactly what your score is we also need to know how much debt doyou have and a lot of people say well Chris my car payment is $400 a monthwell it's really four hundred and forty two dollars and fifty cents you don'tget qualified off the four hundred you have to get qualified with the exactamount same thing with credit cards I spend about 50 bucks a month well ifit's fifty three we got to count those three dollars every little thing countshow do you get paid do you get paid hourly do you get paid salary a lot oftimes most people we'll actually miss calculate theirincome really bad so we have to take a look at all of these things you havemoney in the bank Oh Chris you know I got 12 grand and I look at the bankstatement and it says ninety two hundred well I just wrote a check to pay my billlet's see I have to know these things so I could do a full pre-approval once Ihave all your data usually two years taxes sometimes three I enter everythinginto a computer I'm running it right through Fannie Mae and Freddie Mac'swebsite I am looking at your credit it's gonna evaluate your credit it's gonnaevaluate how much money you have saved how much is in your 401k and which is anannuity whatever the amount of money you have oh you're gonna get a gift it'sgoing to evaluate that it tells me okay you've been on the job for one year ineight months what about your previous job we're gonnaevaluate that it's gonna run through a computerized algorithm and it's gonnagive us what we call an approve eligible that's exactly what we're looking forand then we could start the home buying process okay I'm gonna take this even to thenext level it's better than being pre-approved guess what that is it'sactually being approved how do I do that well I'm gonna take all thatdocumentation that I have analyzed my assistants have analyzed we've enteredinto the computer and we're actually gonna submit it to the underwriter theunderwriter is the person who approves or denies the file they are think of itin legal terms they are judge jury and prosecuting attorney all in one and I amthe defense attorney representing you and the judge jury and prosecutingattorney underwriter they're making believe you a lying cheating andstealing trying to get that loan through so I have to forensically prove on paperthat you're telling the truth they're gonna look at all the numbers everythingI've already put in and they're gonna issue the approval do you know howpowerful that is when you go to make an offer now you're out seeing homes with arealtor you make an offer but you're not making an offer from a position ofweakness oh is this loan going to get approved weget to make an offer state this loan is already underwriter approved sometimesthat actually helps you get a better price okay now I'm really excited for youbecause you are approved I want you to go see the houses now I want you to gofall in love with the houses now I want you to make offers on that house is yourdream house and I want you to have a letter in your hands that says I'malready approved to buy this house that's an awesome thing to do andtogether we're gonna fire your landlord.
Hey guys, Austin Schneider here, and today we're gonna got through the pros and cons of a USDA loan. (jazzy music) Pro number one is that there is an option for no down payments. Con number one is that there's some geographical restrictions. Because this program is meant to support purchasing a home in rural areas, there are geographical restrictions that could cause quite a long commute if you are working in the city. Pro number two, there's some flexible credit guidelines. There's the 640 minimum, and if you do have a few dings, you're probably gonna still be okay. Con number two is that there's some income limits. You do have to meet income limits that are based off of the median income in the area you're living in. Pro number three is that the interest rates are typically lower than your standard conventional loan. Con number three is that you can't get out of the mortgage insurance. While it is a little bit lower with the USDA loan, it's still gonna add to your overall costs. Thanks so much for watching. For more on USDA loans, for the pros and cons, check out our blog atTheMortgageReports. Com. Thanks so much for watching, we'll see you on the next one.
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