via Credit Scores Needed To Qualify For A Kentucky Mortgage Loan Approval?
Credit Scores Needed To Qualify For A Kentucky Mortgage Loan Approval?
Category: FHA
How to qualify for a Kentucky FHA Home Loan ?
via How to qualify for a Kentucky FHA Home Loan ?
How do I qualify for an FHA loan in Kentucky?
Kentucky FHA loans allow buyers with down payments as little as 3.5% to buy a home, and with many state-sponsored down payment assistance programs like KHC or Kentucky Housing Agency down payment asssitance program of up to $6000 currently to use for your own down payment, Kentuck borrowers using FHA loans can can get the loan with zero money down.
They’re are other down payment assistance programs in KEntucky see below:
KACO Down Payment Assistance Program
Louisville Metro Housing Grant
Covington Kentucky Grants and Northern Kentucky Grants to Buy a Home
Chenoa Fund Down Payment Assistance
Kentucky FHA loans allow up to a higher debt to income ratio than conventional loans which are restricted to 45 to 50% debt to income ratio, which is much lower than most Kentucky FHA loans. That means more Kentucky FHa buyers can qualify for a home loan in case if your co-borrower cannot go on the loan due to credit issues.
Do I qualify for an FHA loan in Kentucky?
They’re are many FHA Kentucky loans requirements, which can be confusing. Some lenders are tougher and will not lend even though FHA will insure the loan. So check around on your FHA loan questions
- Buy a property you will use as your primary residence
- Your credit score must meet the minimum requirements of the FHA and the lender (FHA requires a minimum of 500 for 10% down and 580 for 3.5% down; however, lenders often require higher minimums)
- The property you want to buy has to meet the FHA criteria and get approved
- Must meet debt-to-income requirements
- Clear Cavirs number
- 3 years removed from foreclosure sale date
- 2 years removed from Chapter 7 Bankruptcy
- 1 year in Chapter 13 plan with good pay history and permission from trustee
For a detailed explanation of the requirements, you can read the HUD handbook and check with prospective lenders.
Joel Lobb
Senior Loan Officer
Senior Loan Officer
(NMLS#57916)
Company ID #1364 | MB73346
text or call my phone: (502) 905-3708
email me at kentuckyloan@gmail.com
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). USDA Mortgage loans only offered in Kentucky.
All loans and lines are subject to credit approval, verification, and collateral evaluation
Joel Lobb
Senior Loan Officer
Senior Loan Officer
(NMLS#57916)
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. NMLS ID# 57916, (www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.
All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.
FHA’s New Student Loan Rule Could Impact Mortgage Borrowers
via FHA’s New Student Loan Rule Could Impact Mortgage Borrowers
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“Grossing-Up” Non-Taxable Income for a Kentucky Mortgage Loan Approval
“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)
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
Mortgage Loan Officer
Individual NMLS ID #57916
American Mortgage Solutions, Inc.
Text/call: 502-905-3708
fax: 502-327-9119
email: kentuckyloan@gmail.com
email: kentuckyloan@gmail.com
Latest FHA shift to mitigate risks may shut out some Kentucky home buyers wanting FHA Loans in 2019
via Latest FHA shift to mitigate risks may shut out some Kentucky home buyers wanting FHA Loans in 2019
Last week, the Federal Housing Administration took steps to mitigate risks to its single-family portfolio, announcing updates to its TOTAL Mortgage Scorecard that may flag some loans for manual underwriting.
The change applies to all loans with case numbers assigned on or after March 18th, meaning that it is likely to affect some of the loans currently sitting in an FHA lender’s pipeline.
Chatter among members of the lending community suggests a number of originators are unhappy about the changes, fearing that the end result may be that some of their borrowers will be shut out of FHA financing.
Some said the FHA did not go about implementing the changes the right way, creating confusion about how the risk is being mitigated, while others said they felt as if the rug had been pulled out from under them, and fear that borrowers who no longer qualify will be angry, according to email exchanges between lenders and mortgage brokers, shared with HousingWire.
For its part, the FHA said it is taking necessary steps to address some of the risk trends apparent in its single-family portfolio and flagged as concerning in its 2018 Report to Congress.
Specifically, FHA loans have seen a substantial increase in cash-out refinances, a drop in the average borrower credit score, and an increase in borrowers with high debt-to-income ratios.
In its letter about the Scorecard updates, the FHA said that the number of FHA refinances that are cash-outs increased 60% in 2018, and that almost a quarter of all FHA loans in 2018 had a DTI ratio above 50%.
The average credit scores for FHA borrowers has also declined, falling to 670 in 2018 – the lowest average since 2008.
Combined, these factors are signaling untenable risk for the agency as they flag the potential for the program to drain the Mutual Mortgage Insurance Fund.
“Federal Housing Commissioner Montgomery has publicly stated numerous times in recent months that FHA must seek the right balance between managing risk and fulfilling its mission of supporting sustainable home-ownership,” the FHA said in its letter.
“To be successful long term, FHA must maintain the integrity of its insurance endorsements,” it continued. “This includes assessing the causes of the increase in higher-risk credit characteristics in the portfolio and making prudent and necessary changes to re calibrate and adjust its policies as warranted to manage credit risk.”
The agency said the updates to its Scorecard are just the first step it will be taking to address these risk factors.
“FHA will carefully monitor the impact of this change and is preparing to implement additional changes to maintain a better balance of managing risk and fulfilling its mission,” the agency stated.
I can answer your questions and usually get you pre-approved the same day.
Call or Text me at 502-905-3708 with your mortgage questions.
Email Kentuckyloan@gmail.com
Call or Text me at 502-905-3708 with your mortgage questions.
Email Kentuckyloan@gmail.com
—
Joel Lobb
Mortgage Loan Officer
Mortgage Loan Officer
Individual NMLS ID #57916
American Mortgage Solutions, Inc.
10602 Timberwood Circle
Text/call: 502-905-3708
fax: 502-327-9119
email: kentuckyloan@gmail.com
email: kentuckyloan@gmail.com
Joel Lobb (NMLS#57916)
Senior Loan Officer
Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
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#57916 http://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.
AFR announces homebuyer program to grant 2% of purchase price, 6% of closing costs
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%
- 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
- 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
- Any borrower on the loan application is a current, retired, or volunteer, which includes:
- 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
Repair Escrows for Kentucky USDA, FHA, VA, Fannie Mae Home loans
via Repair Escrows for Kentucky USDA, FHA, VA, Fannie Mae Home loans
Maximum Repair Escrow Amounts for Kentucky Mortgages:
Kentucky Fannie Mae Loans:
The cost of completing improvements must not represent more than 10% of the “as completed” appraised value of the property.
Kentukcy FHA Loans:
There is no maximum amount to be held in escrow for the cost of repairs required by appraiser.
Kentucky FHA Loans: (HUD REO):
The maximum limit of cost of repairs for escrow holdback is $10,000, plus $1,000 contingency included in the loan amount.
Kentukcy VA Loans:
There is no maximum amount to be held in escrow for the cost of repairs required by appraiser.
Kentucky USDA Loans:
The maximum amount to be held in escrow for repairs required by appraiser cannot exceed $5,000.
Getting a Home Inspection In Louisville Kentucky- List of Home Inspectors Louisville, KY
via Getting a Home Inspection In Louisville Kentucky- List of Home Inspectors Louisville, KY
Kentucky Approved HUD Home Inspector List below I
HUD’s Inspector Roster was eliminated effective August 2, 2018, as announced in Federal Register Docket No. FR-5457-F-02, dated July 3, 2018.
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Inspectors as of 12/21/2018 (45 records were selected, 45 records displayed.) |
| Name | ID Number | Address | Phone | Status | Approval State |
| WILOUGHBY, DANNY G | A022 | 215 CLUB OAK COURT LOUISVILLE, KY 40223 |
(502) 653-3688 | Active | KY |
| AUBREY, DELMUS | A380 | 3903 BOWMAN LANE CHATTANOOGA, TN 37416 |
(423) 954-2655 | Active | KY |
| PAPPERT, CHRIS F | A901 | 4880 MARYBROOK DR KETTERING, OH 45429 |
(937) 436-3676 | Active | KY |
| EPLING, RICHARD J | B387 | 121 NORTH CUMBERLAND ST MORRISTOWN, TN 37814 |
(423) 581-5583 | Active | KY |
| FLICK, FERDINAND J | B637 | 3771 POWNER RD CINCINNATI, OH 45248 |
(513) 574-5784 | Active | KY |
| TOLLIVER, JAMES R | B931 | POST OFFICE BOX 304 MOUNT WASHINGTON, KY 40047 |
(502) 428-6361 | Active | KY |
| JONES, TIMOTHY E | C894 | 6960 US RTE 52 RIPLEY, OH 45167 |
(937) 392-1561 | Active | KY |
| HUFF, TONY | D730 | 2200 AIRPORT RD, SUITE 60 OWENSBORO, KY 42301 |
(270) 686-8525 | Active | KY |
| GILBERT, DOUGLAS W | E074 | 225 SUBSTATION ST LONDON, KY 40741 |
(606) 878-9265 | Active | KY |
| MCCRACKEN, GARY D | E404 | 403 SUNSET DR LAWRENCEBURG, KY 40342 |
(502) 680-5066 | Active | KY |
| CONNOLLY, MICHAEL | E412 | 508 MARCIA AVE HAMILTON, OH 45013 |
(513) 896-5434 | Active | KY |
| HOLLAND, CHARLES T | F096 | 405 GLENVIEW HTS NEW ALBANY, IN 47150 |
(812) 948-1333 | Active | KY |
| HOLLAND, CHARLES T | F096 | 405 GLENVIEW HTS NEW ALBANY, IN 47150 |
(812) 948-1333 | Active | KY |
| CARR, THOMAS F | G177 | 2805 KEARNEY CREEK LANE LEXINGTON, KY 40511 |
(859) 396-0607 | Active | KY |
| SCHUTZMAN, JOSEPH A | H965 | 2472 KREMERS LANE VILLA HILLS, KY 41017 |
(859) 341-8582 | Active | KY |
| TERRY, WAYNE | I920 | 253 MASSEY LANE CARYVILLE, TN 37714 |
(865) 426-7614 | Active | KY |
| VOTOLATO, FRANK J | I969 | 266 NORWOOD DRIVE EAST BERNSTADT, KY 40729 |
(606) 843-0162 | Active | KY |
| TODD, WILLIAM | J716 | 129 DONNA DRIVE HOPKINSVILLE, KY 42240 |
(270) 885-4700 | Active | KY |
| BUTCHER, BRAD S | J980 | PO BOX 996 SOMERSET, KY 42503 |
(606) 451-0695 | Active | KY |
| SWINDLER, ROBERT M | K001 | 1811 ABERDEEN DRIVE LOUISVILLE, KY 40205 |
(502) 452-9623 | Active | KY |
| POYNTER, DARRELL F | K421 | 1244 BETHLEHEM ROAD PARIS, KY 40361 |
(859) 421-4966 | Active | KY |
| GREGORY, WILLIAM | M043 | 5945 ABBOTT DR. NASHVILLE, TN 37211 |
(615) 331-8495 | Active | KY |
| ELKINS, HUGH | M320 | P.O. BOX 627 RUSSELLVILLE, AL 35653 |
(256) 332-4157 | Active | KY |
| YOUNG, DON L | N031 | 160 FERNWOOD DRIVE LONDON, KY 40741 |
(606) 224-2495 | Active | KY |
| BOTTS, KENNETH G | N291 | 720 HIGHLAND AVE FLATWOODS, KY 41139 |
(606) 615-4454 | Active | KY |
| ROHRBACK, JEFF L | N729 | 1081 SULPHUR WELL ROAD NICHOLASVILLE, KY 40356 |
(859) 887-5992 | Active | KY |
| KIPER, TROY K | N939 | 5101 MT HOLYOKE DRIVE LOUISVILLE, KY 40216 |
(502) 608-3474 | Active | KY |
| JONES, ROBERT B | Q082 | 100 RACHELS COURT HENDERSONVILLE, TN 37075 |
(615) 824-4060 | Active | KY |
| PARSON, JOSEPH A | Q297 | 450 BASELINE DRIVE MOREHEAD, KY 40351 |
(606) 462-7017 | Active | KY |
| SHRUM, JERRY | S012 | 605 GAYLEMORE GOODLETTSVILLE, TN 37072 |
(615) 851-8630 | Active | KY |
| WILDER, LARRY | S017 | 1224 MELINDA FERRY ROAD BULLS GAP, TN 37711 |
(423) 923-4087 | Active | KY |
| HARDEN, LES H | S289 | 33 LUMLEY AVE FORT THOMAS, KY 41075 |
(859) 640-9376 | Active | KY |
| WOOSLEY, DWAINE | T023 | 6210 ELANOR COURT FLOYDS KNOBS, IN 47119 |
(502) 643-6937 | Active | KY |
| BRUNS, SCOTT A | T967 | 339 BRIARCLIFF ROAD DAYTON, OH 45415 |
(937) 545-6664 | Active | KY |
| WRIGHT, GARY | U254 | 97 TOLLGATE TRAIL LONGWOOD, FL 32750 |
(407) 647-1800 | Active | KY |
| CAMPBELL, ERNEST | U433 | 802 BUFFALO ST., #12 JOHNSON CITY, TN 37604 |
(423) 928-1000 | Active | KY |
| CARPENTER, BOBBY M | V373 | 5 BATH AVENUE OWINGSVILLE, KY 40360 |
(606) 674-2554 | Active | KY |
| SCOTT, THAD W | W658 | 4569 LONGBRIDGE LN LEXINGTON, KY 40515 |
(859) 457-1451 | Active | KY |
| SPEARS, JAMES C | W717 | 143 TUFTS LN FAKKUBG WATERS, WV 25419 |
(304) 274-3720 | Active | KY |
| GAGE, KERRY R | X236 | 195 MITCHELL DRIVE VINE GROVE, KY 40175 |
(270) 635-3870 | Active | KY |
| CLOYD, RUSSELL G | X533 | 10960 EAST BEND RD UNION, KY 41091 |
(859) 586-9170 | Active | KY |
| POYNTER, ROBERT | X985 | 4389 MARY INGLES HIGHWAY COLD SPRING, KY 41076 |
(859) 802-8561 | Active | KY |
| CHILDERS, MICHAEL S | Y141 | 185 RAVENSWOOD DRIVE ELIZABETHTOWN, KY 42701 |
(270) 737-4226 | Active | KY |
| BOWLING, JACK J | Z723 | P.O. BOX 88 BONNYMAN, KY 41719 |
(606) 436-6214 | Active | KY |
| COREY SR, DAVID L | Z912 | 777 LOCKHOUSE ROAD FALLING WATERS, WV 25419 |
(304) 274-9000 | Active | KY |
Text/call 502-905-3708
kentuckyloan@gmail.com
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
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.
What kind of credit score do I need to qualify for a Kentucky Mortgage Loan in 2019?
What kind of credit score do I need to qualify for a Kentucky Mortgage Loan in 2019?
Credit scores play an important part in getting approved for a Kentucky Mortgage loan. Your credit scores consist of 3 digits and range anywhere from the low-end of 300 to a high score of 800 range on the top-end. Most borrowers are going to fall in the 500, 600, 700 range, with a few in the 300 and 800 ranges.
The higher the score the better it is for chances of getting approved for a Kentucky Mortgage loan and getting better terms as far as rates, closing costs and mortgage insurance.
There are three main credit bureaus in the United States that lenders will pull from Experian, Equifax, Transunion. Most loan programs will take your middle score. So For example, if you have 629 on transunion, 690 on equifax, and 577 on Experian, your middle credit score would be 629.
The credit score that mortgage lenders use is the fico score. They’re different credit scoring models out there, so keep that in mind, that even though you may get your credit score from Credit Karma or Credit Sesame, this is not your true fico scores that lenders use in Kentucky to approve you for a mortgage loan.
Credit Score vs Credit Karma: what’s the difference?
Different Kentucky Home Loan Programs require different credit score requirements. I will discuss each below:
- Kentucky FHA Mortgage loan credit score requirements:
- The minimum credit score is 500 for Kentucky FHA loans. However please keep in mind these two things: 1. Lenders credit their own overlays to increase the credit score threshold, most being 620, and secondly, if your credit score is below 580, you would need 10% minimum down payment, and if the credit score is over 580, then you can go with the minimum 3.5% down payment.
- Obviously if you have a higher credit score, this will increase your chances of getting approved for a Kentucky FHA Mortgage and possibly better rates and closing costs options.
- Kentucky VA Mortgage loans requirements :
- VA does not have a minimum credit score requirement, but if the credit score is below 620 few lenders will do the loan, but I am set up with several Kentucky VA lenders where I have closed them down to a 560 credit score, but the borrower had good compensating factors such as: large down payment, low dti ratios, good job history and good residual income with no previous bankruptcies or foreclosures.
- I would suggest if your credit scores are below 580, I would suggest on working on getting the scores up before you applied for a VA mortgage loan.
- A lot of lenders will do a rapid rescore which in some cases can increase your credit scores in as little as 7-10 working days.
- The federal Department of Veterans Affairs (VA) guarantees loans for current and former members of the military and their families. VA loans provide very favorable terms to eligible borrowers and have limited qualifying requirements. You can get a VA loan with no down payment so long as the home isn’t worth more than you pay for it, and there’s no minimum credit score to qualify. You also don’t have to pay for mortgage insurance, although you do have to pay an up-front funding fee of of between .5% and 3.3% of the loan amount unless you fall within an exception for disabled vets or military widows or widowers.
- Kentucky USDA Mortgage credit score requirements:
- According to their guidelines, USDA will go down to a 580 credit score, but most lenders will want a 640 credit score. USDA uses an online system to underwrite the risk of the loan, and scores under 640 are very difficult to get approved.
- Validating the Credit Score. Two or more eligible tradelines are necessary to validate an applicant’s credit report score. Eligible tradelines consist of credit accounts (revolving, installment etc.) with at least 12 months of repayment history reported on the credit report. At least one applicant whose income or assets are used for qualification must have a valid credit report score
- The Rural Housing Service (RHS) operates under the federal Department of Agriculture to guarantee loans for rural home-buyers with limited income who can’t obtain conventional financing. The upside is that Kentucky USDA loans require no down payment. The downside is that they charge a steep up-front fee of 1% of the loan amount (which can be paid off over the entire loan term) and an annual fee of 0.35%.
- Credit score over 680: Perform a basic level of underwriting to confirm the applicant has an acceptable credit reputation. Perform additional analysis if the applicant’s credit history has indicators of unacceptable credit as noted in Paragraph 10.7 of this Chapter.
- Credit score 679 to 640: Perform a comprehensive level of underwriting. Underwrite all aspects of the applicant’s credit history to establish the applicant has an acceptable credit reputation. Credit scores in this range indicate the applicant’s reputation is uncertain and will require a thorough analysis by the underwriter of the credit to draw a logical conclusion about the applicant’s commitment to making payments on the new mortgage obligation. The applicant’s credit history should demonstrate his or her past willingness and ability to meet credit obligations.
- Credit score less than 640: Perform a cautious level of underwriting. Perform a detailed review of all aspects of the applicant’s credit history to establish the applicant’s willingness to repay and ability to manage obligations as agreed. Unless there are extenuating circumstances documented in accordance with this Chapter, a credit score in this range is generally viewed as a strong indication that the applicant does not have an acceptable credit reputation.
- Little or no credit history: The lack of credit history on the credit report may be mitigated if the applicant can document a willingness to pay recurring debts through other acceptable means such as third party verifications or cancelled checks. Due to impartiality issues, third party verifications from relatives of household members are not permissible. Lenders can develop a Non-Traditional Credit Report for applicants who do not have a credit score in accordance with Paragraph 10.6 of this Chapter
Kentucky Fannie Mae and Freddie Mac Conventional Credit Score Requirements
These are considered “conventional loans’ that can be often be obtained with a 3% to 5% down payment. Of course, there are higher standards for conventional home financing. The most common minimum credit score requirement to get approved today is a 620 FICO. This type of score is typical for people that have high credit card balances or a few delinquent payments in their past. The general consensus on Freddie Mac and Fannie Mae loans in Kentucky is that a 620 score is the entry-point to qualify, but you will need a thorough documentation of income with credit scores in the 620 to 640 range. You will have a better shot to be approved for a mortgage backed by Fannie or Freddie with a 680-credit score and less strenuous underwriting.
- Competitive Mortgage Rates and Fees
- Monthly Mortgage Insurance Is Not Always Required
- Ideal for First Time Home Buyers with Good Credit
Common Misconceptions About Credit Scoring
Credit scoring is a mystery to many and it even surprises us occasionally. Below are examples of common misconceptions we hear all the time
If I pay off my balance every month so it should show a zero balance on my credit report: Wrong!
Credit card companies will usually report your ending balance on your monthly statement. So even if you pay off your credit card every month, it will not show a zero balance on credit. A bad scenario for someone’s score would be the following: Credit limit is $1,000 and the card owner charges $900 but pays off the balance once the statement is received. The card will report a $900 balance that is 90% of the credit limit and that will hurt the credit score as 30% of a credit score is balance compared to credit limits as a percentage.
I will lower my credit limits to make my credit look better. Wrong!
Do not put your credit limits too low! Again, 30% of your score is balance compared to credit limits. For instance if you charge $1000 per month on a $10,000 limit card, the balance is 10% of the limit which is very good. On the other hand, if you lower the limit to $1500, the balance is 67% of the limit which hurts the credit score.
I will close my credit cards to help my credit report. Wrong! most of the time
Having a good mix of credit types is very important to have a great credit score. I will say this again, 30% of the score is balance compared to credit limits on revolving accounts and if someone doesn’t have any open cards, then a lot of points are being lost on a score. Most experts say that having 2 or 3 revolving accounts that report to all 3 bureaus with low balances compared to the limits is the magic number for the best score. Also a portion of the credit score is how long accounts are open so keep the lines of credit open a very long time rather than opening and then closing accounts often
What if underwriting will require me to pay off a collection to approve my loan, Am I stuck? No
Then all you need to do is simply have to do it have it as a condition to pay off the collection at closing rather than up-front. By doing this, it will not have time to lower your credit score before closing your loan.
I haven’t paid my student loans in years because they are in collection status, but that was a long time ago so I’m ok, right? No
Unfortunately if they are government backed loans, then this will affect your ability to obtain a government mortgage loan. A good thing about government student loans is that they will usually allow you to start paying them again, then usually within 6 – 12 months, they will report the loan again as current. Make sure that the company agrees to do this and get it in writing. By doing this, you can go from owing Thousands of dollars as a collection to having a regular loan with hopefully a manageable payment.
I just got a car loan, so my credit should be good. Not necessarily
I hate to say it, but about anyone can get a car loan no matter how bad the credit is so this is not an indication of good credit. Having an installment loan like a car loan is a good thing to have on credit as long as it is paid on time and the longer it has reported, the better. As a side note, be wary of buying a car and the dealership pulling your credit without your knowledge to many creditors. It is not uncommon for someone with marginal or sometimes good credit to have their credit pulled 10 times or more.
I will pay off my old collections just before applying for a mortgage so my scores will go up. Usually your scores will go down unless they agree to “delete” or “remove” them from your credit in writing
Be careful here! If there are older collections with a date of last activity that is a while back and they are paid off, the credit scores can go down in the short term. So if someone has a 650 credit score which would qualify for most mortgages, wants to increase their scores a little by paying off old collections just before purchasing a home, the collections would now show paid off (if they actually update which they often don’t), but now show a date of last activity as “now”. It doesn’t make sense but the bureaus treat the collection activity like it just happened which doesn’t seem right but it happens. Often it makes more sense to pay off the collections at or prior to closing following the recommendation of the loan officer. Fair Isaac is working on potential changes to how this affects scores and maybe the other credit bureaus will make this change too.
Charged off accounts and collections are treated the same when getting a mortgage, right? Actually NO
Sometimes when an account is charged off, it is not required to be paid off for qualifying purposes. This is true on FHA loans for instance.
I will dispute some credit accounts on my credit report so my scores will go up.
Read the article below on how dispute language can hurt you when applying for a mortgage.
If I pay off my balance every month so it should show a zero balance on my credit report: Wrong!
Credit card companies will usually report your ending balance on your monthly statement. So even if you pay off your credit card every month, it will not show a zero balance on credit. A bad scenario for someone’s score would be the following: Credit limit is $1,000 and the card owner charges $900 but pays off the balance once the statement is received. The card will report a $900 balance that is 90% of the credit limit and that will hurt the credit score as 30% of a credit score is balance compared to credit limits as a percentage.
I will lower my credit limits to make my credit look better. Wrong!
Do not put your credit limits too low! Again, 30% of your score is balance compared to credit limits. For instance if you charge $1000 per month on a $10,000 limit card, the balance is 10% of the limit which is very good. On the other hand, if you lower the limit to $1500, the balance is 67% of the limit which hurts the credit score.
I will close my credit cards to help my credit report. Wrong! most of the time
Having a good mix of credit types is very important to have a great credit score. I will say this again, 30% of the score is balance compared to credit limits on revolving accounts and if someone doesn’t have any open cards, then a lot of points are being lost on a score. Most experts say that having 2 or 3 revolving accounts that report to all 3 bureaus with low balances compared to the limits is the magic number for the best score. Also a portion of the credit score is how long accounts are open so keep the lines of credit open a very long time rather than opening and then closing accounts often
What if underwriting will require me to pay off a collection to approve my loan, Am I stuck? No
Then all you need to do is simply have to do it have it as a condition to pay off the collection at closing rather than up-front. By doing this, it will not have time to lower your credit score before closing your loan.
I haven’t paid my student loans in years because they are in collection status, but that was a long time ago so I’m ok, right? No
Unfortunately if they are government backed loans, then this will affect your ability to obtain a government mortgage loan. A good thing about government student loans is that they will usually allow you to start paying them again, then usually within 6 – 12 months, they will report the loan again as current. Make sure that the company agrees to do this and get it in writing. By doing this, you can go from owing Thousands of dollars as a collection to having a regular loan with hopefully a manageable payment.
I just got a car loan, so my credit should be good. Not necessarily
I hate to say it, but about anyone can get a car loan no matter how bad the credit is so this is not an indication of good credit. Having an installment loan like a car loan is a good thing to have on credit as long as it is paid on time and the longer it has reported, the better. As a side note, be wary of buying a car and the dealership pulling your credit without your knowledge to many creditors. It is not uncommon for someone with marginal or sometimes good credit to have their credit pulled 10 times or more.
I will pay off my old collections just before applying for a mortgage so my scores will go up. Usually your scores will go down unless they agree to “delete” or “remove” them from your credit in writing
Be careful here! If there are older collections with a date of last activity that is a while back and they are paid off, the credit scores can go down in the short term. So if someone has a 650 credit score which would qualify for most mortgages, wants to increase their scores a little by paying off old collections just before purchasing a home, the collections would now show paid off (if they actually update which they often don’t), but now show a date of last activity as “now”. It doesn’t make sense but the bureaus treat the collection activity like it just happened which doesn’t seem right but it happens. Often it makes more sense to pay off the collections at or prior to closing following the recommendation of the loan officer. Fair Isaac is working on potential changes to how this affects scores and maybe the other credit bureaus will make this change too.
Charged off accounts and collections are treated the same when getting a mortgage, right? Actually NO
Sometimes when an account is charged off, it is not required to be paid off for qualifying purposes. This is true on FHA loans for instance.
I will dispute some credit accounts on my credit report so my scores will go up.
Read the article below on how dispute language can hurt you when applying for a mortgage.
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
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
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.
What does debt to income ratio mean for a Mortgage Loan Approval in Kentucky?
via What does debt to income ratio mean for a Mortgage Loan Approval in Kentucky?
When it comes to getting approved for a Kentucky Mortgage loan, lenders will look at your current gross monthly income versus your current debts to qualify up to your maximum spending limits for a mortgage loan. Also called your dti or debt to income ratios.
There are two ratios they use: Front end ratio and back-end ratio
The first ratio is measured using your new house payment, taking into account your principal and interest payment, property taxes and home insurance premiums along with the mortgage insurance. That ratio typically needs to be less than 1/3 of your gross monthly income to fit most KY mortgage programs for FHA, VA, USDA and Fannie Mae guidelines.
I have attached below a picture with a general overview of qualifying ratios for a Kentucky Mortgage loan approval when it comes to income vs debts or debt to income ratios.
Debt-to-Income Ratio Guide for Kentucky FHA, VA, USDA and KHC Loans:
| Acceptable Ratios | ||
| Housing | Debt to Income | |
| Conventional | 28% | 41-50% |
| FHA | 29% | 41-56.5% |
| VA USDA/RHS KHC |
29% 29% 40% |
41-65% 41-45% 50% |
| Higher ratios may be accepted with compensating factors: low loan value, large cash reserves after closing, high credit scores, etc, | ||
So for example, let’s say you make $3000 gross a month, then your max house payment on the new loan would equal about $1000 for your new house payment.
Your current rent payment, utility bills, car insurance, cell phone bills, don’t go into account when figuring your max ratios.
The second ratio, called the backend-ratio measures your new house payment, plus your current monthly debts listed on the credit report. Most Kentucky Mortgage programs will want to cap this at 45% to 50%, with some going a little higher with compensating factors.
For example, let’s say you make $3000 gross a month, and your new house payment is $1000, taking you up to your max limits on the front end ratio of 1/3. and let’s say you have a $300 car payment, $100 in credit card payments and $150 student loan payment.
What is your maximum qualifying house payment with a back-end ratio of 50% with the current debts above? Let’s look at the math: Take $3,000 x 50% =$1,500 — this is going to be your max limits on the backend ratio with new house payment and current debt load. So let’s see what this amounts to:
($1500-$300-$100-$150=$950)
So if we take the $1500 minus your current monthly bills on the credit report, this is going to equal a max house payment of $950. As you can see, even though the front end ratio allows for $1000 max house payment, the back-end ratio is going to be $950, so you would go with the lowest of the two.
If you pay or receive child support or child support this can be added or deducted to affect your max qualifying ratios for a mortgage loan, along with 401k loans.
As stated above, car insurance, cell phone bills, current rent payments, utility bills, insurance, does not come into play when qualifying for a max mortgage loan approval.
Curios about how much you would qualify for a mortgage loan in Kentucky?
Call, text or email me your questions and I would be glad to help you.
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
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.
