Louisville Kentucky Mortgage Loan Officer originating FHA, VA, KHC, Rural Housing, USDA, Fannie Mae Mortgage Loans. Call or Text 502-905-3708 or Email me at Kentuckyloan@gmail.com NMLS#57916 Equal Housing Lender. Not Endorsed or Affiliated with any Government Lending Agency. I have over 18 years experience originating Kentucky Mortgage Loans. Put my experience and trust to work for you today. Free Pre-Approvals and Credit Report Same Day!
The first step to qualifying for an FHA loan is to work with a loan officer at an FHA approved lender. General FHA guidelines that the loan officer will discuss with you include:
Documenting an employment history over the last two years. FHA guidelines consider the last two years of employment and look at a steady pay history or employment with the same employer.
Providing a valid social security number and proof that you’re a resident of the United States. There are exceptions for resident aliens, but these exceptions will vary by lender.
Producing the necessary down payment. FHA loans require a minimum down payment of 3.5% when buying a home — but the down payment may be a gift under certain conditions.
Performing the necessary due diligence. The property will need to be inspected by an FHA appraiser and an FHA approved appraisal must be done.
Assessing how much you can afford.Although there is some flexibility, the total monthly mortgage payment generally should not exceed 30-32% of your gross monthly income.
Assessing your level of debt. Your total debt should not be more than 43% of your gross monthly income. Again, there is some flexibility with this number, but this is a good guideline.
Note from mortgage professional, Albert Bui, “the 43% DTI to income is mainly a guideline max for many loans out on the market to comply with certain qualified mortgages (QM) guidelines however in reality the max on FHA I’ve seen is 46.99% on the front ratio (housing payment only) and 56.99% on the backend when factoring in all other obligations. So this means you can borrow up to 46.99% on the front ratio for your housing payment but it doesn’t mean the borrower should max it out, rather they “can.”
Knowing your credit score. Minimum credit scores now apply with FHA loans and can vary by lender. A credit score of 580 and above requires a 3.5% down payment, and a credit score of 500-579 requires a 10% down payment. Credit score requirements will vary by lender.
According to Mr. Bui, “a 3.5% down payment is the min however there are many down payment assistance (DPA) programs that will either grant you the 3.5% for free with no repayment’s, offer the borrower a 3.5% community 2nd loan that is silent (no payment) and may be forgivable after a certain period of time, or a 2nd that has a silent payment but is due at a certain period of time or payoff in the future. So you can bring in as little as $0.00 with qualifying income or additional requirements.”
Disclosing prior bankruptcies. If you have had a bankruptcy that has been discharged, the waiting period is 2 years.
Disclosing prior foreclosures. If you have had a foreclosure, the waiting period is 3 years, and you must have good credit
2016 Kentucky mortgage waiting period for foreclosures and short sales for specific situations
Kentucky Conventional Loans
Foreclosures: 7 years from the foreclosure completion date (some applicants may qualify for a conventional loan only 3 years after with extenuating conditions including wage earner death, illness or job loss)
Short Sale/Deed in Lieu-Short Sale:
7 year with less than 10% down of primary residence
4 years with 10% down on the purchase of a primary residence
4 years with 20% down on the purchase of a primary, secondary or investment property purchase
2 years with extenuating circumstances, only with 20% down
Kentucky FHA Loans
Foreclosures: 3 years from the foreclosure completion date and transferred back to the lender to the credit report date
Short Sale: 3 years from the title transfer date
Kentucky VA Loans
Foreclosure: 2 years from foreclosure completion date and date transferred back to the lender
Short Sale: 2 years from previous sale closed date and new owner transfer date
Kentucky USDA Loans
** If the mortgage debt that was foreclosed, was included in a Bankruptcy – then the KY USDA Home Loan waiting periods after foreclosure “waiting period” of 3 years, starts from the date of the discharge of the Bankruptcy. Because it can take 6 months or more for Banks to process the Foreclosure, and transfer title, this is a tremendous plus.
: 3 years from foreclosure completion date or sheriff sale of home
You will be asked to provide proof of self-employment as well as a 2-year income history to prove your “taxable” earnings.
Part-time income: 1-2 year history of earnings required along with confirmation of employment.
Pension income: 2-year history of earnings via cheque slips and/or bank account statement showing pension deposit.
Disability income: must be long term and confirmed with documentation.
Child Support or Alimony: can be used if the divorce or separation agreement confirms the amount though some lenders will also want to see proof it has been deposited to your bank account for last 3-6 months too
Seasonal Employment: minimum 2 year history of earnings required along with T4s and/or Notice of Assessments and employer confirmation.
Rental income: lease agreements and/or tax returns confirming amount of the rents from rental properties or legal suites.
2 years income tax documentation for part-time, bonus, or overtime to use an two year average.