Category: 2019 kentucky first time home buyer programs

“Grossing-Up” Non-Taxable Income for a Kentucky Mortgage Loan Approval

“Grossing-Up” Non-Taxable Income for a Kentucky Mortgage Loan Approval


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“Grossing-Up” Non-Taxable Income

Did you know that you can gross up non-taxable income?

You may gross up non-taxable income for income qualifying purposes. The non-taxable income source being “grossed-up” must be documented.

Non-taxable income refers to types of income not subject to federal taxes, which includes, but is not limited to:

  • some portion of Social Security Income;
  • some federal government employee Retirement Income;
  • Railroad Retirement benefits;
  • some state government Retirement Income;
  • certain types of disability and Public Assistance payments;
  • Child Support;
  • military allowances; and
  • other income that is documented as being exempt from federal income taxes.

The percentage to be grossed-up varies by agency:

  • FHA the greater of 15% or the appropriate tax rate for the income amount
  • USDA 25%
  • VA 25%
  • Freddie Mac  25% or the amount of the current federal and state income tax withholdings tables
  • Fannie Mae 25% or the amount of the current federal and state income tax withholdings tables
  • Jumbo – 25% (see guidelines for specific restrictions)

 

mortgage qualification

 

Now let’s talk about what it takes to qualify for a mortgage.

First off, you’ll need an adequate credit score, along with sufficient income to make the proposed mortgage payment each month.

[What credit score do I need to get a mortgage?]

Generally speaking, a credit score below 620 is considered subprime in the mortgage world and will make qualifying for a mortgage that much more difficult. But it’s still possible depending on lender and loan type.

If you’ve got previous foreclosures on your credit report, things will get even more problematic and you may not even be eligible for a certain period of time.

But if your credit score is above 740 and you’ve got some decent credit history to back it up, you should have access to the lowest mortgage rates and a wide array of loan options.

Credit scores in between should still work, though there might be pricing hits associated, which all else being equal, may bump up your interest rate.

Tip: Lenders want to see a minimum of 3 active credit tradelines with two-year history on each to assess your creditworthiness.

As far as job history goes, it’s important to show the mortgage underwriteryou’ve had (and still have!) a steady job, typically for two years or longer.

This essentially proves that you will continue to receive regular income to make those costly mortgage payments each month for the next 30 years.

If you just graduated and have held a job for a mere two months, don’t expect to qualify for a mortgage unless your new position directly correlates with what you studied in school.

For example, if you went to medical school, and now have a job as a doctor, this might be sufficient to qualify for a mortgage.

But if you were an art history student who has been working as a flight attendant for two months, mortgage lenders probably won’t feel comfortable lending to you just yet. Make sense?

When seeking out your mortgage, you’ll also need to consider the mortgage down payment requirements, which vary depending on the type of loan you’re after.

While there are still some zero down mortgages around, namely VA loans and USDA loans, it certainly helps to set aside some assets so you’ve got something to put into your home purchase.

Obviously, the amount of money needed will also vary based on the purchase price of the home. If you want a more expensive house, expect to put more down in order to qualify.

If we’re talking about a mortgage refinance, you’ll need a certain amount of home equity to qualify for the mortgage, as determined by loan-to-value ratioconstraints.

Use Common Sense and Think Like the Mortgage Lender

  • Would you approve YOU for a mortgage?
  • If not, address those red flags immediately
  • Don’t guess, run the actual numbers with a professional
  • And ask plenty of questions if you’re unsure about anything early on

When it comes down it, it’s all pretty much common sense. Do you think you can/should qualify for a mortgage?

Do you have a track record of making on-time payments, carrying large amounts of debt and paying it down, holding a job, and saving money?

Are you ready to make a big commitment? If you were the bank, would you lend you a mortgage…hmm.

[How much house can I afford?]

I would guess that most prospective homeowners could assess the situation beforehand and determine if they should be granted a mortgage.

But without running the numbers, you won’t know for certain. So be sure to do plenty of calculations and speak with a loan officer or two to see where you stand.

They’ll be able to get you a quick answer so no one’s time is wasted.

What You Need to Qualify for a Mortgage

Here’s a general list of what you need to qualify for a mortgage. Keep in mind that qualification requirements vary greatly by lender and loan type.

In some cases, you won’t need all of these things, but it should certainly make life easier to satisfy everything on this list.

  • Credit History – minimum of 3 active tradelines with 2-year history on each (credit score minimums vary)
  • Job History – at least 2 years on same job or in same line of work (recent graduates with new jobs in certain fields like doctors and lawyers may be exempt)
  • Income – verifiable income (tax returns, pay stubs) for the past two years that satisfies debt-to-income ratio limits
  • Assets – enough to cover down payment, closing costs, and at least two months of mortgage payments (known as reserves)
  • Rental History – proof of clean rental history for the past two years is also important to show the lender you have a propensity to pay on time each month (those currently living with their parents may be excluded from this rule).

If you can’t satisfy these basic requirements, you may want to keep renting, saving, and working on your credit until you can.

Or consider adding a co-signer who is better qualified to apply for a mortgage.

Either way, don’t be discouraged. There are lots of home loan programs and creative options out there to suit all different needs. As noted, one lender may say no while another says YES.

Read more: Tips for first-time homebuyers.

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916
 
American Mortgage Solutions, Inc.
 

Text/call:      502-905-3708

fax:            502-327-9119
email:
          kentuckyloan@gmail.com
 
 

 

http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu

 

AFR announces homebuyer program to grant 2% of purchase price, 6% of closing costs


Down Payment Grant Kentucky Home Buyers down to 580 Credit Score
DPA Grant from AFR for 2% Grant to Buy a Home Down to a 580 Credit Score. 1.5% still needed from borrower to satisfy FHA loan requirements

American Financial Resources announced its new down payment assistance program that will provide grants for homebuyers, and caters especially to teachers, military members and first responders. The program will grant up to 2% of the purchase price and up to 6% of closing costs.

Source: AFR announces homebuyer program to grant 2% of purchase price, 6% of closing costs

DPA Advantage Program Guidelines

Borrower Eligibility – Must meet one of the following three categories outlined below

  • First-time Home Buyer
    • Purchasing the subject property
    • Will reside in the subject property as their principal residence
    • Has no ownership interest in any residential property, for a period three years prior to the date of application.
      • The exception will be for an individual who is a homemaker or single parent with no ownership interest in a principal residence, other than a jointly owned property with a former spouse, during the three-year period prior to the date of the application
  • Borrower(s) Income
    • The borrower, or borrowers if multiple applicants on the loan application, income must be equal or less than 140% of the state or county median income regardless of family size
      • To determine the median income use the following web tool to determine median income https://homeready-eligibility.fanniemae.com/homeready/
      • Borrower(s) income must be less than the median income * 1.4
      • If overtime income is not used to qualify the borrower, then the overtime income doesn’t not count towards the 140%
      • The income that the underwriter will use to qualify the borrower is what will be compared to the 140%
  • Current or Retired Employment or Volunteer/Non-Paid Member
    • Any borrower on the loan application is a current, retired, or volunteer, which includes:
      • First responder (includes police officer, firefighter, public safety officer, paramedic, EMT)
      • Educator (includes Sunday school teacher, tutor, day care provider)
      • Medical personnel (includes nurse, doctor, phlebotomists, health ambassador, Red Cross worker)
      • Civil Servant in Federal, State, or Local Municipality
      • Military Personnel
  • Borrower(s) must complete an 8 hour, first-time Homebuyer education course from a HUD approved Housing Counseling Agency. Click Here for a list of HUD approved counseling agencies
    • Online counseling is acceptable. Click Here for an example of one national counseling agency
    • Only one borrower must take the first-time Homebuyer education course
    • If the borrower has already completed another approved course that will be acceptable provided the course expiration is after the closing on the loan

Down Payment Requirements from Homebuyer

  • When factoring in the DPA Advantage grant the borrower is responsible for a down payment equal to 1.50% of the purchase price (FHA 3.50% down payment, minus DPA Advantage Programs 2.00 Grant)
  • The borrowers 1.50% down payment responsibility can come from flexible sources such as a family member gift or a loan against a 401k retirement account

Eligible Properties

  • Existing homes
  • New Construction
  • Includes: single-family one-unit residence, townhomes, detached, condominiums, and modular homes

Interest Rate

  • The interest rate on the DPA Advantage Program is significantly higher than a standard FHA Loan

Loan Type:

  • FHA 203 (b)
  • FHA 203 (k) Standard
  • FHA 203 (k) Limited
  • FHA Repair Escrow

Maximum Purchase Price

  • The maximum purchase price is the lower of FHA maximum County loan limit or the conforming loan limit, which is currently $484,350
  • Click Here to determine the maximum base loan amount for a FHA Loan, based on the County in which the property is located

Maximum Debt-To-Income (DTI)

  • Maximum DTI limit is 48.99

Minimum Credit Score

  • FHA: 580

Multiple Property Ownership

  • Not permitted

Occupancy Type

  • Primary residence only
  • Non-occupant co-signers allowed, so long as the primary borrower meets one of the three requirements for the DPA Advantage Program

Repayment Requirements and Affordability Period

  • None. Completely forgivable grant
 
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
 


Text/call 502-905-3708
kentuckyloan@gmail.com

http://www.nmlsconsumeraccess.org/
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/

— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

 

2019 Kentucky First Time Home Buyer Loan Programs


via 2019 Kentucky First Time Home Buyer Loan Programs

 

 

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Kentucky Housing Loans with Government Shutdown


Source: Kentucky Housing Loans with Government Shutdown

 

Partial Federal Government Shutdown

Affects Loan Programs

The partial shutdown of the federal government is affecting some of the first mortgage programs through Kentucky Housing Corporation (KHC).
RHS Guarantee Loans
  • KHC will not purchase or close a loan without the RHS Conditional Commitment and tax transcripts.
Verification of Employment (VOE) on Conventional, FHA, and RHS Loans for Federal Employees
  • KHC will require a VOE within 10 days prior to closing.
  • The only exceptions will be conventional loans for military personnel who use their Leave and Earnings Statement (LES), or if their employment was validated by Desktop Underwriter (DU) service and follows all conditions.
Flood Insurance
  • KHC will follow agency guidelines that are in place during the partial federal government shutdown.
Federal Tax Transcripts and Social Security Validation
  • If federal tax transcripts or validation of social security numbers are required per underwriting, or are listed as an automated underwriting engines (AUS) finding within DU, then applicants will be required to provide copies prior to closing or purchase of a loan.
KHC Interest Rate Lock

If you have an existing interest-rate lock that will need an extension due to the partial federal government shutdown, please email your loan officer at the KHC lender handling your loan. 

6 options for buying a home with little or no money down in Kentucky


via 6 options for buying a home with little or no money down

 

First Time Home Buyer Options for  Kentucky Homebuyers in 2019

 

6 options for buying a home with little or no money down


Here’s what you need to know when you have little or no money to put down on a home!

Source: 6 options for buying a home with little or no money down

Guidelines Changes on Student Loans for Conventional Fannie Mae, USDA, FHA, and VA Mortgage loans in Kentucky for 2019


via Guidelines Changes on Student Loans for Conventional Fannie Mae, USDA, FHA, and VA Mortgage loans in Kentucky for 2019

Kentucky Homebuyer Loan Options for 2019.


via Kentucky Homebuyer Loan Options for 2019.

 

https://firsttimehomebuyerkentucky.wordpress.com/category/2019-kentucky-first-time-home-buyer/

IN 2019 KENTUCKY FIRST TIME HOME BUYERCREDIT SCORESDEBT RATIODOWN PAYMENTFHA LOANFICO SCOREKENTUCKY FIRST TIME HOME BUYERKENTUCKY MORTGAGE CREDIT SCOREKHC LOANPRE-APPROVAL LETTERUSDA LOANVA MORTGAGE KY

 

Kentucky Homebuyers Down Payment Grants for 2019


PRMI_Dreammakerdec 16Kentucky First Time Home Buyer Loans for 2019$6000 Kentucky housing grant for 2019 first time home buyersa8a1e-unnamed2B2528152529via Kentucky Homebuyers Down Payment Grants for 2019

Here are action steps you can take right now to buy a home in Kentucky in 2019

1. Focus on your credit score

FICO credit scores are among the most frequently used credit scores, and range from 350-800 (the higher, the better). A consumer with a credit score of 750 or higher is considered to have excellent credit, while a consumer with a credit score below 620 is considered to have poor credit.

To qualify for a mortgage and get a low mortgage rate, your credit score matters.

Each credit bureau collects information on your credit history and develops a credit score that lenders use to assess your riskiness as a borrower. If you find an error, you should report it to the credit bureau immediately so that it can be corrected.

2. Manage your debt-to-income ratio

Many lenders evaluate your debt-to-income ratio when making credit decisions, which could impact the interest rate you receive.

A debt-to-income ratio is your monthly debt payments as a percentage of your monthly income. Lenders focus on this ratio to determine whether you have enough excess cash to cover your living expenses plus your debt obligations.

Since a debt-to-income ratio has two components (debt and income), the best way to lower your debt-to-income ratio is to:

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.

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 45% 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.

3. Keep credit utilization low on your credit cards

Lenders also evaluate your credit card utilization, or your monthly credit card spending as a percentage of your credit limit.

Ideally, your credit utilization should be less than 30%. If you can keep it less than 10%, even better.

For example, if you have a $10,000 credit limit on your credit card and spent $3,000 this month, your credit utilization is 30%.

Here are some ways to manage your credit card utilization:

  • set up automatic balance alerts to monitor credit utilization
  • ask your lender to raise your credit limit (this may involve a hard credit pull so check with your lender first)
  • pay off your balance multiple times a month to reduce your credit utilization

4 . Look for down payment assistance in Kentucky

There are various types of down payment assistance, even if you have student loans.

Here are a few:

  • FHA loans – federal loan through the Federal Housing Authority
  • USDA loans – zero down mortgages for rural and suburban homeowners
  • VA loans – if military service
  • Kentucky Housing Down Payment Assistance of $6000

There are federal, state and local assistance programs as well so be on the look out.

If you want a personalized answer for your unique situation call, text, or email me or visit my website below:

Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.
10602 Timberwood Circle 
Louisville, KY 40223
Company NMLS ID #1364

Text/call: 502-905-3708

email: kentuckyloan@gmail.com

https://kentuckyloan.blogspot.com/