4 Things Needed to Get Approved for a Mortgage Loan In Kentucky


I wish it were that easy.  There are 4 basic things that a borrower needs to show a lender in order to get approved for a mortgage in Kentucky.  Each category has so many what ifs and sub plots that each box can read as it’s own novel.  In other words, each category has so many variables that can affect what it takes to get approved, but without further adieu here are the four categories in no particular order as each without any of these items, you’re pretty much dead in the water:

Income

You need income.  You need to be able to afford the home.  Without it, forget it!  But what is acceptable income?  Basically, it all depends on the type of loan that a borrower applies for.  Jumbo, V.A., USDA, FHA, Conventional, Super Jumbo?  Let’s just say that there are two ratios:
  1. First Ratio – The first ratio, top ratio or housing ratio.  Basically that means out of all the gross monthly income you make, that no more that X percent of it can go to your housing payment.  The housing payment consists of Principle, Interest, Taxes and Insurance.  Whether you escrow or not every one of these items are factored into your ratio.  There are a lot of exceptions to how high you can go, but let’s just say that if your ratio is 33% or less, generally, across the board, you’re safe.
  2. Second Ratio– The second ratio, bottom ratio or debt ratio includes the housing payment, but also adds all of the monthly debts that the borrower has.  So, it includes housing payment as well as every other debt that a borrower may have.  This would include, Auto loans, credit cards, student loans, personal loans, child support, alimony….basically any consistent outgoing debt that you’re paying on.  Again, if you’re paying less than 43% of your gross monthly income to all of the debts, plus your proposed housing payment, then……generally, you’re safe.  You can go a lot higher in this area, but there are a lot of caveats when increasing your back ratio.
What qualifies as income?  Basically, it’s income that has at least a proven, two year history of being received and pretty high assurances that the income is likely to continue for at least three years.  What’s not acceptable??????  Cash income, short term income and income that’s not likely to continue.

Assets

For the most part this is fairly simple.  Do you have enough assets to put the money forth to qualify for the downpayment that the particular program asks for.  USDA says that there can be no money down.  FHA, for now, has a 3.5% downpayment.  Some loans require 20% down.  These assets need to be validated through bank accounts and sometimes gifts.  Can you borrower the down payment?  Sometimes.  Generally if you’re borrowing a secured loan against a secured asset you can use that.  But rarely can cash be used as an asset.  TALK TO YOUR LOAN OFFICER FIRST when discussing what’s acceptable?

Credit

Whewwwwwwwwwwwwwwwwwwwwwwwwwwww.  This can be the bane to every borrower, every loan officer and every lender……and yes, to every realtor.  How many times has a borrower said my credit’s good, only to find out that it’s not nearly as good as a borrower thinks or nearly as good as the borrower needs.  Big stuff for sure.  620 is the bottom score (again with few exceptions) that lenders will permit.  Below a 620, then you’re in a world of hurt.  Even at 620, people consider you a higher risk that other folks and are going to penalize you or your borrower with a more expensive loan.  700 is when you really start to get in the “as a lender we love you” credit score.  720 is even better.  Watch your credit!!!!!  Check out my post:

Appraisal

In many ways this is the easiest box.  Why?????  Generally, there’s nothing you can do to affect this.  Bottom line here is…..”is the value of the house at least the value of what you’re paying for it?”  If not, then not good things start to happen.  Generally you’ll find less issues with values on purchase transactions, because, in theory, the realtor has done an accurate job of valuing the house prior to taking the listing.  The big issue comes in refinancing.  In purchase transactions, the value is determined as the

Lower of the value or the contract price!!!

That means that if you buy a $1,000,000 home for $100,000, the value is established at $100,000.  Conversely, if you buy a $200,000 home and the value comes in at $180,000 during the appraisal, then the value is established at $180,000.  Big issues….Talk to your loan officer.
For each one of these boxes, there are over 1,000 things that can effect if a borrower has reached the threshold to complete that box.  Soooooooooooo…..talk to a great loan officer.  There are so many loan officers that don’t know what they’re doing.  But, conversely, there’s a lot of great ones as well.  Your loan is so important!  Get a great lender so that you know, for sure, that the loan you want, can be closed on!
Joel Lobb
Senior  Loan Officer

(NMLS#57916)
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
 Fax:     (502) 327-9119
 
 Company ID #1364 | MB73346
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Author: Louisville Kentucky Mortgage

I have helped over 589 Kentucky families buy or refinance their home over the last 18 years. Realizing that this is one of the biggest, most important financial transactions a family makes during their lifetime, I always feel honored and respected when I am chosen to originate their personal home loan. You can count on me to deliver on what I say, and I will always give you honest, up-front personal attention you deserve during the loan process. I have several advantages over the large banks in town. First, I can search and negotiate for your loan options through several different mortgage companies across the country to get you the best deal locally. Where most banks will offer offer you their one set of loan products. I have access to over 10 different mortgage companies to broker your loan through to get you the best pricing and loan products that may not fit into the bank's program due to credit, income, or other underwriting issues. You will not get lost in the shuffle like most borrowers do at the mega banks; you're just not a number at our company, you are a person and we will treat you like one throughout the entire process. Give us a try or let us compare your options on your next mortgage transaction. Call me locally at 502-905-3708. Free Mortgage Pre-Qualifications same day on most applications. Email me at kentuckyloan@gmail.com with your questions I specialize in Kentucky FHA, VA ,USDA, KHC, Conventional and Jumbo mortgage loans. I am based out of Louisville Kentucky. For the first time buyer with little money down, we offer Kentucky Housing or KHC loans with down payment assistance. This website is not an government agency, and does not officially represent the HUD, VA, USDA or FHA or any other government agency. NMLS# 57916 http://www.nmlsconsumeraccess.org/ Joel Lobb Senior Loan Officer (NMLS#57916) American Mortgage Solutions, Inc. 800 Stone Creek Pkwy, Ste 7, Louisville, KY 40223 phone: (502) 905-3708 Fax: (502) 327-9119 kentuckyloan@gmail.com Company ID #1364 | MB73346 http://mylouisvillekentuckymortgage.com Equal Housing Lender

22 thoughts on “4 Things Needed to Get Approved for a Mortgage Loan In Kentucky”

  1. I’ve been looking around on the web trying to get some ideas on how to get my personal website coded, your overall layout and style are excellent. Did you actually code it yourself or did you hire a programmer to do it on your behalf?

  2. Do you guys expect the income ratios to change on February 1st, 2011 when the the condo lending guidelines are set to revert back? I really have not found a lender in Nashville who could weight in so I searched online and you guys certainly seem to be qualified to answer this opinion question. Thank you in advance.

  3. Pingback: VA -

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