Category: Refinance of Mortgage

2018 Kentucky First Time Home Buyer Loan Programs


via 2018 Kentucky First Time Home Buyer Loan Programs

 

Getting a mortgage for a home can seem like a complicated and mysterious process. Just like any good investment, you should never buy anything that you don’t understand.  Knowing how the mortgage lending system works will relieve much of the stress and anxiety associated with making what is most likely the largest purchase of your entire life. This article will help you understand…

What You Need To Know About A Mortgage… BEFORE You Get One!!!

Qualifying for a Mortgage

Home LoansMortgage companies are in business to make money by lending money that is secured by an asset large enough to sell and recover their capital if the borrower is no longer able or willing to pay the payments. They are not in the business of owning property and would rather not have to foreclose on a loan, repossess the property and sell it to recapture their capital. This does happen but it is not their primary business. They would rather have their borrowers make their payments so that they could collect the interest and move on down the road. To increase their odds of that happening, mortgage companies look at several areas of your financial history to determine if you will meet their standards. This is called Qualifying for a Mortgage.

What the mortgage company finds when they look at these areas will help determine the type of mortgage that is available to you and the interest rate you will pay on the money that you borrow.

The areas that they are interested in looking at are:

Job History

Lenders want to know if you have been in your current job and/or profession for at least two years. They also want to know if you are retired or self-employed.

Income

TaxesMortgage lenders want to know how much your monthly income is before taxes are taken out (Gross Monthly Income). Typically you will be asked to provide check stubs for the last 30 days and Federal Tax Returns or W-2’s for the last two years to prove your income.

If you are self-employed and it is difficult for you to prove your gross income to the lender you may be able to get a “stated income” loan. If that is the route that you take, your income must be “reasonable” for your profession. Since stated income loans are riskier for the lender you will generally have a higher interest rate.

Credit History

Mortgage lenders really like it if you have a history of paying your bills on time. This is reflected in your credit report and FICO score. If you have “bad credit”, you are NOT automatically disqualified from getting a mortgage. Lower credit scores will increase the interest rate that you will be required to pay and sometimes that increase will be quite significant.

Debt Load

You can have an awesome job with an income to make Bill Gates jealous and a great credit score but if you have already acquired too much long term debt you may not qualify for the loan you want.

assetsAssets

Mortgage lenders will want to check your bank accounts to make sure that you have the cash necessary to pay the down payment and closing costs and that you have “reserves” available to make the loan payment. Often, the lender will require 3-6 months reserves. (Reserves can be in a 401K or other retirement account that you can pull the money out of)

Requested Loan Amount

The loan you are requesting will need to be proportional to your ability to make the payments. Be reasonable with your house buying expectations – don’t expect to buy a lot more house than you can afford. The recent housing bust defined the term “house poor” and got a lot of people into financial trouble. Again, mortgage lenders would much rather you make your monthly house payments because everyone loses if they have to foreclose.

Determining YOUR Mortgage Interest Rate

The market place determines the range of interest rates available for any mortgage and the lending rates change daily. The specific interest rate you will pay is based on how well qualified you are and the type of loan you want.

Interest rates are typically based on the answers to these questions:

How Good Is Your Credit Score? 

FICO ScoreThe most widely used score is the FICO score, the credit score created by Fair Isaac Corporation. Lenders use the FICO Score to help them make billions of credit decisions every day. Fair Isaac calculates the FICO Score based solely on information in consumer credit reports maintained by the credit reporting agencies.

FICO credit scores range from 300 to 850. That FICO Score is calculated by a mathematical equation that evaluates many types of information from your credit report, at that agency. By comparing this information to the patterns in hundreds of thousands of past credit reports, the FICO Score estimates your level of future credit risk.

With the top end of the credit score being 850, anything above about 720 is considered excellent. Some local lenders set 740 as the benchmark for their preferred interest rates. Having a lower credit score DOES NOT mean you will not get a loan. You may qualify BUT your interest rate will be higher than someone with better credit.

How Big Is Your Down-Payment?

down-paymentThe Down-Payment is the amount of your own money you are going to put into buying the property. The more money you put into the property on the front end, the lower the risk of you not paying the payments. The amount of your down payment also directly affects the amount of your loan (purchase price – down payment = loan amount). This is called the Loan to Value Ratio (LTV).

The LTV is the percentage of the value of the house that the mortgage will cover (loan amount / purchase price x 100). For example, the property you are interested in buying is selling for $100,000. You have $20,000 for the down-payment and want a mortgage for the other $80,000. The LTV for this mortgage is 80%.

Similar to the LTV is the Combined Loan to Value Ratio (CLTV). The CLTV is used when 2 loans are used to finance the home purchase. You may see or hear terms like “80-20” or “80-15-5”. This refers to the 1st lien percentage (80), the 2nd lien percentage (20 or 15) and the down payment percentage (5).

How Much Debt Do You Currently Have?

It only makes sense that the more debt you have the riskier the loan is for the lender. There is a finite amount of income in all of our households and it all gets allocated every month. Lenders use a “debt-to-income” ratio to determine how qualified you are for the loan based on how much debt you already have.

debt_to_income_ratioYour Debt to Income Ratio (DTI) is the percentage of your income that you owe in debt on a monthly basis. For example, if you make $5,000 per month, and have debt payments (car loans, credit cards, student loans, etc.) of $2,000, your DTI ratio is 40%. The higher this ratio is, the less likely you will be to qualify for a low interest rate.

Conventional loans typically have a qualifying ratio of 28/36. FHA loans will sometimes allow for a higher debt load of 29/41 qualifying ratio.

The first number in a qualifying ratio is the maximum percentage of your gross monthly income that can be applied to your mortgage. That includes the loan principal and interestprivate mortgage insuranceproperty taxeshomeowners insurance, and homeowner’s association dues.

The second number is the maximum percentage of your gross monthly income that can be applied to housing expenses and recurring debt. Recurring debt includes monthly payments for carsboatsmotorcycleschild support payments and monthly credit card payments.

 Example:  of a 28/36 qualifying ratio:

Gross monthly income of $5,000 x .28 = $1400 can be applied to housing.

Gross monthly income of $5,000 x .36 = $1,800 can be applied to recurring debt plus housing expenses

Example: of a 29/41 qualifying ratio:

Gross monthly income of $5,000 x .29 = $1,450 can be applied to housing.

Gross monthly income of $5,000 x .41 = $2,050 can be applied to recurring debt plus housing expenses

These are just general guidelines and everyone’s personal finances are unique. To get the real answer about how well you qualify and to determine how large a mortgage a local lender will offer contact one of our preferred lenders and visit with a loan officer.

Here is a KEY point to remember…

FICO KEYYour credit score is THE most vital piece of information

when qualifying for a loan.

I am a Dave Ramsey fan and I believe in paying cash but even Dave concedes when it comes to buying a house. In Financial Peace Dave calls the FICO score an “I love debt score” and brags about not having one. He even tells a story about trying to rent an apartment and he couldn’t because he doesn’t have a FICO score. He then says, “I can’t rent an apartment because I don’t have a FICO score… I could write a check and buy the whole complex but I can’t rent an apartment because I don’t have a credit score!” Which is a great story for someone that CAN write a check and buy the whole complex… The rest of us need to maintain a really good credit score.

If you’re ready to buy a new home

and want to shop around for the best deal on a mortgage…

Looking for a mortgage, auto or student loan may cause multiple lenders to request your credit report, even though you are only looking for one loan. To compensate for this, the score ignores mortgage, auto, and student loan inquiries made in the 30 days prior to scoring. So, if you find a loan within 30 days, the inquiries won’t affect your score while you’re rate shopping. In addition, the score looks on your credit report for mortgage, auto, and student loan inquiries older than 30 days. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score. For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score.

What Type of Loan Are You Looking For?

40 year fixed, 30 year fixed, 20 year fixed, 15 year fixed, 10 Year Fixed, Adjustable Rate, etc. All of these loan types have different interest rate ranges.

Locking Your Interest Rate

Once you have completed a loan application, determined what type of loan you want and qualified for that loan you can “lock” the interest rate for that loan. Locking the Interest Rate means, for the period of the “lock” you are guaranteed that interest rate. Lock periods are typically 15, 30 or 60 days, although you may be able to get an extended lock period.

Rate LockOnce you lock your interest rate:

If you do not close on the loan before the lock period expires, you will NOT have a guaranteed interest rate anymore. And, the longer the lock period, the higher the rate will be. For example, a 15 day lock may be at 5.125%, a 30 day lock at 5.25%, and a 60 day lock at 5.375%. So, before locking your loan, be sure you are not locking for too long a time or for too short a time.

Interest rates fluctuate daily and may go up or down. By locking your rate, you are betting that rates will go up in the future.

 What does “Buying Down” the Interest Rate Mean?

You can reduce the interest rate on your mortgage by paying “points” at closing. A point is 1% of the value of the loan, so a point on a $200,000 loan is $2,000. If you “buy down” you loan to a lower interest rate you will have lower monthly payments and pay less interest over the life of the loan. However, “buying down” you loan to a lower interest rate means more money out of your pocket on the front end when you close the loan. You should do the math and weigh each side of the equation before making a decision about buying down the interest rate or not.

What Are The Closing Costs and Fees?

Closing CostsThere are four types of closing costs and fees…

Those charged by the mortgage company and/or mortgage broker, those charged by 3rd party vendors, those charged by the Title Company, Escrow Company or Escrow Attorney and Pre-Paid Charges.

Lender Fees

These can include loan origination fees and Broker fees which are usually a percentage of the loan amount; administrative fees and application fees, processing fees and underwriting fees. These last fees usually run from $100 to $500, and ALL of them are negotiable.

3rd Party Vendor charges

These are charges collected by the lender and paid to outside companies that provide a service. These are not usually negotiable and can include appraisal charges, flood certification fees, courier charges, document prep fees, mortgage lender attorney fees, etc.

Title Company charges

These are the fees charged by the Title Company, Escrow Company or Escrow Attorney. They are usually set by the state and are not negotiable. These charges include title insurance, attorney fees, state/county/city registration fees, etc.

Pre-Paid Charges

If the lender will be establishing an escrow account to pay taxes and insurance, the buyer will pre-pay taxes and insurance to establish an escrow account and will pre-pay the interest on the loan until the end of the month in which the loan closes.

 Does The Closing Date Really Matter?

The day you choose to close determines the amount of pre-paid interest you will have to pay. Closing at the end of the month means that you will pay less pre-paid interest. For example, if you close on October 1st you will pay 31 days of pre-paid interest. If you close on October 31st you will pay 1 day of pre-paid interest.

When Is My First Payment Due?

It doesn’t matter what day of the month you close on, you will not have your first loan payment due until a month has passed. So, if you close in October, your first payment is due in December – you get November for free!

What Is PMI?

pmi-basics1Private Mortgage Insurance (PMI) is required on all loans that have a LTV greater than 80%. PMI is an insurance premium that you pay every month as part of your monthly payment. However, PMI is not intended to protect you. PMI is insurance coverage that protects the mortgage lender against default on the loan. If you stop making your payments, the mortgage lender is paid a percentage of the loan amount (usually 25% to 35%) by the insurance company.

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

Customer Testimonials

We just moved here the first of January in 2017 from Ohio to the Louisville, KY area and we found Joel’s website online. He was quick to respond to us and got back the same day on our loan approval. He was very knowledgeable about the local market and kept us up-to date throughout the loan process and was a pleasure to meet at closing. Would recommend his services.

Angela Forsythe

“We were searching online for mortgage companies in Louisville, Ky locally to deal with and found Joel’s website, and it was a godsend. He was great to work with, and delivered on everything he said he would do. I ended up referring my co-worker at UPS, and she was very pleased with his service and rates too. Would definitely vouch for him.” September 2016

Monica Leinhardt

“We contacted Joel back in July 2011 to refinance our Mortgage and he was great to work with. We contacted several lenders locally and online, and most where taking almost 60 days to close a refinance, Joel got it done in 23 days start to finish,I would definetly recommmend him. He got us 3.75% with just $900 in closing costs on our FHA Streamline loan.

Kayle Griffin

“Joel is one of the best Mortgage Brokers I have ever worked with in my sixteen years in the real estate and mortgage business.” May 25, 2010

Tim Beck

“Joel has always worked very hard to keep his word and to work out seasonable solutions to difficult problems. He is truly an expert in FHA and other type loans.”

September 1, 2010 Nancy Nalley
“I have worked with Joel since 1998. He is a great loan professional.” I refer most of my Louisville, Kentucky area home buyers to him and he always take special care of them.

August 23, 2012 Jon ClarK

“Joel Lobb is a real professional in the lending industry, with many years of experience, he is the one to go to for any mortgage lending needs.” August 22, 2011

RICHARD VOLZ , Residential Sales , Remax Foursquare Realty
“When looking to purchase our new home in 2006, I had the pleasure of meeting Joel Lobb. Not only was he personable and easy to reach, he was extremely knowledgeable in his field and made sure to find us the best rate and a top notch mortgage company. We were able to complete the process in less than 3 weeks with his expertise. I find Joel to have the utmost high integrity and I recommend him to anyone who say’s they are need of mortgage assistance. He is also fantastic and keeping everyone up to date on the latest in the housing industry through his twitter posts. He provided great results for our family and we still communicate to this day!”

August 21, 2010
Stacie Drake

 

“We first use Joel on our new home purchase in 2007 in St Matthews, Kentucky area and he was great to work with. We have since refinanced our home with him in 2010 when rates got really low and he has always delivered on what he says. I could not imagine using anyone else.”

Melody Glasscock March 2014

 
Absolutely Amazing!! I emailed Joel after I had just got a denial from a bank and just thought i would try to get some advice on what my next steps would be to get a house. I honestly didn’t expect to even get a reply because my credit is not great. That was about a week and a half ago. I just signed a contract on a house last night. ONLY because of Joel Lobb. He even worked with us throughout the weekend, which shocked me. Best decision I have ever made. THANK YOU SO MUCH FOR WORKING WITH US THROUGHOUT THE ENTIRE PROCESS.
Cee Bellisle August 2017

Contacted him about buying a home and he was great to work with. I was moving to Louisville Ky to take a new job and he walked me through the entire process. He explained to me all the different options for FHA, VA, USDA mortgage loans and credit score requirements versus Fannie Mae. Since I was a first time home buyer I needed alot of help and guidance. I would definitely recommend him. Fast to respond and available to answer questions that I or my realtor had after hours.

 

Anderson Johnson April 2018

 

 

We moved from Michigan to Northern Kentucky area and we were really impressed. We got a USDA loan no money down and closed in less than 3.5 weeks. We shopped around online with other lenders but Joel was always first to respond and his rates were just a little better than other lenders. He kept us informed through the process along with our realtor and there was absolutely no surprises like we heard from other co-workers and friends that they experienced in their loan process. We have already referred another co-worker to Joel . He’s AWESOME!

Patty Kingston June 2018

 

Advertisements

Louisville Kentucky VA Refinance for Cashout, rate and term, and IRRL streamline VA refinance Mortgage


via Louisville Kentucky VA Refinance for Cashout, rate and term, and IRRL streamline VA refinance Mortgage

Kentucky USDA Rural Housing Guidelines for Home Insurance Deductibles and POA’S for 2017


 

 

Source: Kentucky USDA Rural Housing Guidelines for Home Insurance Deductibles and POA’S for 2017

Louisville Kentucky First Time Home Buyer Programs and Resources


Louisville Kentucky First Time home Buyers programs including, FHA, VA, KHC, and USDA, Rural Housing Zero Down home loans–Our site is updated daily for Louisville Kentucky first time home buyers with the best programs and rates

Louisville Kentucky First Time Home Buyer Programs and Resources

3 Types of Lending Approvals [Infographic].

 
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

2014 First Time Home Buyer Programs Louisville Kentucky


First Time Home Buyer Programs Louisville Kentucky.

 

Government Mortgage Products available to Kentucky First Time Home Buyers in 2014

KENTUCKY FHA MORTGAGE LOANS

  • Min FICO 600
  • Non-Occupant co-borrowers allowed
  • 100% Gifts Allowed from family members
  • Manual UW allowed but must keep debt to income ratios at 29/41% respectively and have a verifiable rent history ox30
  • Non-credit qualify Streamlines — No income or credit report required
Kentucky FHA First Time Home Buyer Loans for 2014
Kentucky FHA First Time Home Buyer Loans for 2014

 

 

 

 

 

 

 

KENTUCKY VA MORTGAGE LOANS

  • Min FICO 620
  • Manual UW
  • 100% Cash Out and Zero Down Payment Home loans. Must have COE
  • IRRRL — OR KENTUCK VA STREAMLINE REFINACE
Kentucky VA Mortgage Lender Guidelines for 2014
Kentucky VA Mortgage Lender Guidelines for 2014

 

 

 

 

 

 

 

 

 

 

 

 

KENTUCKY RURAL HOUSING AND USDA RURAL HOUSING LOANS

  • Min FICO 620
  • 100% Max LTV, no money down financing.
  • Manual UW but must have debt to income ratios of 29 and 41% respectively with a verifiable rent history 0x30
  • 100% Gift Funds allowed
kentucky usda rural housing loan programs for 2014
Kentucky usda rural housing loan programs for 2014

 

 

 

 

 

 

 

Kentucky Conventional Housing Loans

Fannie Mae

  • 95% Financing available
  • Lower mortgage insurance premiums than FHA and max loan is about $100k higher in Kentucky for A Fannie Mae Loan vs. FHA Loan

 

Kentucky Fannie Mae Mortgage Guidelines for 2014
Kentucky Fannie Mae Mortgage Guidelines for 2014

 
Flex-Banner Apply for a free mortgage pre-approval qualificaton today.
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

Louisville Kentucky VA Refinancing IRRL – Frequently Asked Questions


Image

Back to FAQ’s home

Louisville Kentucky VA Refinancing

 

 

Do you have an existing Louisville Kentucky VA Home Loan or conventional loan that you are interested in refinancing? While interest rates are still low, there are many advantages to refinancing now in order to get a lower interest rate, take cash out of the equity in your home, consolidate credit, or make home improvements. If you are interested in refinancing with a Kentucky VA Loan, the VA has programs that can assist you. Below are some questions other people have asked about the Louisville Kentucky VA Refinancing programs. Follow the headers to find information about Louisville Kentucky VA Refinancing. If you cannot find an answer here, a VA Loan Specialist can be contacted online or by phone to answer all your refinancing questions.

What is an IRRRL?

An IRRRL is the VA’s Interest Rate Reduction Refinancing Loan, also known as a VA Streamline Refinance. An IRRRL is a loan that refinances your existing VA Loan into a new VA Loan with a lower interest rate, or from an adjustable rate mortgage (ARM) into a fixed rate mortgage. A Certificate of Eligibility is not required for an IRRRL.

Do I have to be eligible for a lower interest rate in order to qualify for a VA IRRRL?

Not necessarily. In order to qualify for an IRRRL, the VA requires you to obtain a lower interest rate if you are going from a one fixed rate mortgage to another fixed rate mortgage, but if you are going from an adjustable rate mortgage to a fixed rate mortgage, the VA will allow you to refinance to a higher interest rate.

If it is called an Interest Rate Reduction Loan, why does the VA allow me to refinance my ARM to a higher interest rate?

Since you are refinancing your adjustable rate mortgage into a fixed rate mortgage the interest rate may be higher initially, but you will save money over time. With adjustable rate mortgages you may get a lower interest rate than a fixed rate mortgage for the first few years, but after that your interest rates increase and you are paying higher rates than you would with a fixed rate mortgage. This is why the VA allows you to refinance into a higher fixed rate of interest on your mortgage before your adjustable rate on your current mortgage increases.

Can I refinance with the VA if I am already using my Loan Guarantee entitlement with my current mortgage?

Yes. As long as you are refinancing your VA-guaranteed mortgage, then you can use this program to get more favorable loan terms and save money over the long run. If you’re ready to get started with your VA Refinance, contact a VA Refinance Specialist now.

What out-of-pocket expenses will I have when refinancing?

None. The VA allows you to finance all closing costs associated with refinancing into your new mortgage. Your lender may have some fees, but you will need to consult them to find out what they expect you to pay up front, if anything.

Do I have to use my current lender to refinance?

No. If you want a new lender, you can choose from any mortgage lender on the VA-approved lender’s list. Make sure that you shop around for your refinancing loan. By going to several lenders, you will get more offers and you can choose the best loan terms for you and your family. Be careful of lenders that try to deceive you into thinking they are the only lender that can finance a VA IRRRL. The VA has a long list of approved lenders, and you should shop around.

Do I have to go through the credit check and appraisal process again when refinancing?

The VA does not require another credit check and appraisal because it has already approved you for the loan guarantee in the first place. However, lenders usually do require a credit check and appraisal when refinancing because they need to make sure you are still credit worthy and the property still has a higher market value than their maximum loan amount. For more information about this, check out VA Appraisal, Qualification and Approval FAQ’s.

Do I have to get another Certificate of Eligibility?

No. You have already been approved by the VA for your home loan guarantee, and refinancing does not require a Certificate of Eligibility.

Keys with a VA Loan

What fees does the VA charge for an IRRRL?

The VA only requires a 1.5% funding fee of the value of your new loan. There are no other fees involved with the VA. If a lender tries to tell you that the VA charges extra fees you should contact the VA to see if something has recently changed and, if not, you should find a new, ethically responsible lender.

Does the VA have any requirements for me to get an IRRRL?

The VA has the following eligibility requirements for an IRRRL:

  • You must be refinancing an existing VA Loan into a new VA Loan in order to use this program.
  • You need to certify that you have been occupying the property. For your original loan you had to sign an agreement stating you would be the primary occupant of the home, and now you will have to sign an additional agreement saying that you have been the primary occupant.
  • You cannot take more out on your new loan than what you currently owe. The loan can be more only as a result of fees and closing costs being financed into the mortgage.

Can I include the cost of home improvements in my IRRRL?

You are allowed to include up to $6,000 in your refinancing loan for the purpose of energy efficient home improvements. Any other home improvements are not eligible.

Can I take cash out of an IRRRL?

No. An IRRRL from the VA is only for the purposes of obtaining a better interest rate on your mortgage loan in order to save you money over time.

What is a VA Cash Out Refinancing Loan?

This is the type of refinancing loan the VA offers for those Veterans who want to take cash out of the equity in their homes. You must be refinancing an existing VA Loan in order to use the VA Cash Out Refinancing Program.

What can I use the cash I take out of my home for?

Anything you want. Make sure you consult your lender to see if they have any restrictions on what you can use the money for.

Can I consolidate debt with a Cash Out Refinance Loan?

Yes. As a matter of fact, many lenders prefer that you do consolidate all of your debt into your new loan because it makes you less of a credit risk for them.

How much cash can I take out of my home equity?

Your home’s value is on a Certificate of Reasonable Value, and you are allowed to take up to 90% of this amount. On top of this you are also allowed to finance the VA funding fee and include up to $6,000 for energy efficient home improvements.

I am delinquent on my current mortgage. Can I still get a VA Cash Out Refinance Loan?

This depends on your lender. The VA allows it, and many lenders will also allow you to refinance as long as you are financially able to make the new payments. If you are a delinquent on your current mortgage because of excess debt, the lender will probably require you to consolidate that debt into your new mortgage loan in order to lower you interest rates on your unsecured debt and give you a more affordable monthly payment.

How much does the VA guarantee my loan for with a VA Cash Out Refinance?

The highest amount the VA will guarantee a Cash Out Refinance mortgage for is $36,000.

Still have questions?

More information on refinancing options is available through the Department of Veterans Affairs or by contacting your VA Regional Loan Service Center.

Louisville Kentucky Mortgage Refinance: How Can I Pay Off My Mortgage Faster?


How Can I Pay Off My Mortgage Faster? Basic Concepts—–Louisville Kentucky Mortgage Refinance

How Can I Pay Off My Mortgage Faster? Basic Concepts
A 30 year mortgage, if paid monthly, is about 60% paid off in 24 years. If the borrower makes one extra monthly payment per year on a 30 year mortgage, the entire mortgage is paid off in 24 years. That’s six years of vacations, helping your children with college, or bolstering your retirement accounts.
To understand this, let’s look at how your mortgage payment is determined. We’ll use a $200,000 mortgage at 6.0% for our example.
The monthly payment would be $1199.10.
The interest payment is $200,000 * .06 = $12,000/ 12 months = $1000
The principal payment would be $199. That’s right. After one month you will have paid $1199.10 and your balance will have gone down $199.
A lower principal balance = a lower amount of interest. Each month the amount of interest paid goes down and the amount of principal paid goes up.
Anything extra
But who has an extra $1200 to make that extra payment? You do.
Call me today for your free refinance mortgage analysis..Rates are low and it is time to refinance
I can be reached locally at 502-905-3708 or email me your questions to kentuckyloan@gmail.com

Why Are More Kentucky Mortgage Loans Not Being Refinanced?


 

Kentucky Mortgage Rates at all time low..Call now for a free-analysis 502-905-3708

 

Why Are More Kentucky Mortgage Loans Not Being Refinanced?

Why Are More Kentucky Mortgage Loans Not Being Refinanced?October 25, 2010

While mortgage interest rates are at their lowest levels since 1945, millions of mortgages that carry interest rates of 6% to 9% or even higher, are not being refinanced. The reasons for this involve Fannie Mae and Freddie Mac, the two secondary market giants now in Government conservatorships, in a central role.
The problem is perhaps best seen through the eyes of borrowers who are unable to refinance. Each unsuccessful borrower cited below is representative of a sizeable group of unsuccessful borrowers.

Fannie Mae and Freddie Mac Have Become Excessively Restrictive

 

 

Adam was turned down for a refinance because he did not meet the new stiffer underwriting and pricing requirements set by the agencies in their standard programs. His credit score, which was acceptable when he got his loan before the crisis, is not high enough to meet the new requirements.
It clearly was appropriate for the agencies to correct the excessively liberal rules that had prevailed during the go-go years, which contributed to the financial crisis. However, they have reacted to their excessive liberality before the crisis by becoming excessively restrictive in the aftermath. Their underwriting and pricing structures are designed to maximize their net earnings, as if they were still private firms.

Fannie and Freddie are now part of the Government, and should set their underwriting rules and pricing adjustments not to maximize net revenue but to break-even over a long time horizon.

Kentucky Mortgage Loans

 

There Should Be No Maximum LTV on the HARP Program
Barbara is one of many homeowners who bought during the go-go years and who now owe more than their houses are worth – she is “underwater”. She applied for a loan under the Home Affordable Refinance Program (HARP), which was designed to make refinance possible for underwater borrowers who are current on their payments and whose loans are owned by Fannie or Freddie. Barbara is ineligible, however, because she is too far underwater. Her loan-to-value ratio (LTV)  is 130% and the agencies have set a 125% maximum.
A maximum LTV in the HARP programs cuts out a sizeable segment of the potential market, for no good reason. The agencies are already on the hook for any losses on high LTV loans, and a rate reduction can only reduce the probability that a default will occur that would trigger the loss. Indeed, the reduction in expected loss from a rate-reducing refinance is larger on a 150% LTV than on a 125% LTV. The default rate has to fall only half as much on a 150% loan as on a 125% loan to generate the same reduction in expected loss.

Fannie and Freddie should scrap the LTV maximum in the HARP program, for which there is no rational reason, thereby also eliminating the need for appraisals on HARP loans.

Kentucky Mortgage Loans

Too Few Lenders Make 125% HARP Loans

Charley was turned down for a refinance under the HARP program, although his LTV was only 120%, which made him eligible under agency rules. Nonetheless, the lenders Charley approached would not make the loan. They told him that their maximum LTV was 105%, and some said that it was 95%. Charley could have refinanced if he knew where to go, but he didn’t and gave up the search.
I did a quick and dirty survey and found that HARP loans above 105% are not available from brokers or from smaller lenders who sell to wholesalers who in turn sell to the agencies. HARP loans exceeding 105% are only available from some of the lenders who sell directly to the agencies.
Freddie Mac has a list of HARP lenders at http://www.freddiemac.com/cgi-bin/homeowners/relief_refi.cgi, but it is extremely difficult to find. If Fannie has one, I could not find it. The Freddie list has 27 lenders, 14 of which do 125% loans, of which only 4 have wide multi-state presence:

Fannie and Freddie ought to do a better job of informing potential borrowers how to find a lender who will make 125% HARP loans, and they should review their policies that have discouraged broader lender participation.

 

Borrowers With LTVs Above 105% Who Have PMI Can Refinance Only With Their Current Servicer
Doris’s situation was the same as Charley’s, including an LTV of 120%,  with one difference. Doris’s existing loan carries privarw mortgage insurance (PMI). The lenders who turned her down told her that the mortgage insurer had to agree to shift the MI policy to the new loan, but would not do so in her case.
Under HARP rules, if there is no MI on the existing loan, none is required on the new loan. If there was MI on the old loan, as in Doris’s case, it will be carried forward on the new loan, provided the PMI firm agrees. But if the current LTV exceeds 105%, they won’t agree unless the new loan is being made by the existing servicer.
Doris was not aware that only the lender servicing her loan can shift the mortgage insurance policy from the existing loan to a new one. PMIs will not shift the mortgage insurance to a new loan with a different lender when the LTV exceeds 105%.

Fannie and Freddie ought to inform potential HARP borrowers who have mortgage insurance and LTVs greater than 105% that they can only refinance with their current lender, and they should examine whether there is anything they can do to remove the PMI roadblock.

 

Kentucky Mortgage Loans

HARP Should Be Expanded to Cover Mortgages Not Owned by Fannie or Freddie
Ethan is an underwater borrower in good standing whose loan is not owned by Fannie or Freddie. His only possibility of a refinance is the new FHA program I wrote about a few weeks ago, but that program requires the existing lender to write-down the balance to 97.75% of house value. Since Ethan is making timely payments, the lender has very little incentive to do that.
Ethan had no say in who ended up owning his loan, from his perspective it was a coin toss that came up tails and made him ineligible for HARP. The out-of-luck group to which Ethan belongs includes a large number of sub-prime borrowers who meet their obligations faithfully while paying rates up to 9% and even higher.
There is no good reason why such borrowers have to be left entirely out in the cold. While including these borrowers in HARP would expose Fannie and Freddie to risks they did not have before, the agencies could set payment performance requirements and charge risk premiums large enough to protect taxpayers while still offering many of these borrowers substantial relief..

 

Treasury should have the agencies develop a HARP1 program covering loans they do not now own that would be subject to underwriting rules and price adjustments consistent with the Government breaking even.

 


Kentucky Mortgage Loans

Labels: Kentucky Housing Mortgage Rates Louisville Kentucky, Kentucky Mortgage Rates and Home Loan Options, Louisville Kentucky

FHA Mortgage Streamline Refinance Louisville Kentucky


Kentucky  First Time Home BuyerFHA KENTUCKY MORTGAGE REFINANCE

Did you know you can refinance your Kentucky FHA mortgage with no appraisal? It’s called a FHA Streamline Refinance. It requires little qualification and it has no appraisal requirements. The benefits are obvious, a homeowner with a Kentucky FHA loan can refinance to a lower rate even if the property value has decreased.

An added benefit of the FHA Streamline Refinance is the cost, many cost such as title fees, doc prep fees, appraisal fees etc. are reduced or eliminated. Since the loan amount can not be adjusted to include fees, it is important to minimize cost, thus reducing your cash-out of pocket.

Another option for reducing cost is to raise the interest rate. Many lenders call this a “No Cost Refinance.” While the title is somewhat misleading as there is a cost in a higher interest rate, it is an effective tool for eliminating cash-to-close.

The Kentucky Mortgage FHA streamline refinance is a government backed mortgage that can help homeowners reduce their monthly payment by reducing their mortgage rate. A FHA streamline refinance mortgage in Kentucky  can be one of the simplest and most cost-effective ways to refinance your mortgage. Unlike some modification loans, the streamline refinance does not have any negative consequence on your credit rating.

Items needed:

  • Present mortgage must be a Kentucky FHA mortgage.
  • Written application, complete with present mortgage info.
  • Mortgage credit rating – must be current on the existing loan with no late payments in the last twelve months.
  • You must have owned your current home for at least six months.
  • No appraisal is required, unless you want to include your closing cost in the loan.


Joel Lobb
Senior Mortgage Loan Officer

Key Financial Mortgage
107 S. Hurtsbourne Parkway
Louisville Ky 40222

ph# 502-905-3708
fax# 502-895-2266

jlobb@keyfinllc.com

http://kentuckyloan.blogspot.com/

http://www.facebook.com/people/Joel-Lobb/841739521

CALL 502-905-3708 FOR YOUR SAME DAY APPROVAL…Free Credit Report included

%d bloggers like this: