Where do buyers begin?
Haley Newton, a loan officer with Starkey Mortgage in Sherman, said the first step in the buying process is not finding a house, rather it’s getting prequalified for a home loan. Buyers need to first find out how much house they can afford and if they can actually purchase a home.
“A lot them want to know what the first step is, and many people believe that the first step is finding a house, but that’s actually the second step,” Newton said. “You want to get prequalified with a local lender to know what you’re prequalified for, and then go out and find a house, which is the hard part.”
What documents do buyers need to provide to get prequalified and preapproved?
Prequalification is typically the quick and easy initial step and preapproval is a more involved process. The prequalification process starts with an application, which most lenders have available online, though Newton said buyers can call a lender or meet them in person to fill it out. After buyers fill out an application, which covers the buyers’ finances and history, the lenders will verify the information for preapproval and that requires the supporting documents.
“Once they’re prequalified, we’ll give them a list of documents they need depending on their application,” Newton said.
The list typically calls for pay stubs from the last 30 days, tax returns for the last two years, bank statements for the last two months, W-2s, IDs and Social Security cards.
Jeremy Lewis, branch manager of Grayson Home Loans, said sometimes the lender may require divorce decrees and documentation to indicate other income depending on the buyers’ situation. After preapproval, Lewis said he usually gives the buyers a call, and they figure out a loan program that best fits the buyers.
How much do buyers need for a down payment?
Short answer: It depends on the loan.
Lewis said the down payment is often the main concern for buyers, and it’s not a set amount. Depending on the loan type and what programs the buyers are eligible for, the down payment can be as little as zero down. Loans from the Federal Housing Administration, Veteran Affairs and the U.S. Department of Agriculture each have a set of stipulations that include the percentage required for the down payment.
“It depends on the loan type they’re going with — whether it be a conventional loan, an FHA loan, a VA loan or a USDA loan, it will determine what they’re going to have to place down — what their initial investment is going to be,” Lewis said. “There are still those out there out there that think they have to put 10 to 20 percent down, which is not correct. They can, in certain programs, put as little as zero down.”
Newton said there are down payment assistance programs in the state that can help cover the amount needed. These programs are income based and are capped anywhere from $55,000 to $75,000 depending on the program.
What’s the deal with closing costs?
In addition to a down payment, buyers also need funds to cover the closing costs. Lewis said the closing costs depend on the loan amount as a higher loan amount is going to cost more. About half the closing costs are directed to building the buyers’ escrow account, and the other half is a combination of fees for items such as the title and appraisal.
“Closing costs are another piece of the puzzle they’re going to have to come up with,” Lewis said. “However, in a Texas residential contract, you can ask the sellers to pay a certain percentage, depending on the loan type, for your closing costs.”
Buyers can negotiate with the sellers and ask that the seller pays a portion of the closing costs, which if the buyers qualify for a down payment assistance program, the initial costs can be very low.
“If you’re able to use the down payment assistance programs in addition to requesting the seller to pay some of their closing costs, they can actually get into a home with little to nothing down,” Newton said.
What is an escrow account?
“It kind of works like a separate checking account, and the purpose of that account is to pay the yearly tax bill that comes due every January, and their insurance premium that’s due once a year depending on when they closed on their home,” Newton said.
The initial money put into the escrow account is part of the closing costs, and Lewis said homeowners then add to it monthly when they make their house payments. The account is for buyers to put back money so property taxes and insurance are covered.
“Say when their tax bill comes due in January, there will be plenty of money in the account for them to pay their taxes, so that way they’re not coming up $2 to 3 to 5,000 all at once to pay their tax bill,” Newton said.
Can buyers purchase a home with a bad credit score?
Newton said buyers don’t necessarily need the best credit in order to get a home loan, and she noted that first-time homebuyer programs have recently lowered their credit score requirements.
“A lot people around here they don’t necessarily have bad credit, they just don’t have a lot,” Newton said. “They don’t use their credit.”
Newton said lenders will work with buyers and give them steps to take over 60 to 90 days to boost their credit score to where they can buy a home.
“It can be intimidating but we can walk them through it,” Newton said.
Buyers should consult with local lenders, and Lewis said he guides buyers through the process so they know what to expect.
“There’s so many different moving parts to a loan anymore,” Lewis said. “I try to keep everyone versed and ready for what’s to come in the process and what to expect.”
Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle, Suite 3
Louisville, KY 40223
text or call my phone: (502) 905-3708
email me at firstname.lastname@example.org
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.
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Joel E Lobb
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Kentucky FHA, VA, USDA & Rural Housing, KHC and Fannie Mae mortgage loans.
Fannie Mae Foreclosure listings in Kentucky and Jefferson County!
|350 Warren Dr||
Vine Grove, KY
|Single Family||Just Listed||$80,000||3||2|
|348 2nd Ave||
|Single Family||Under Contract||$84,900||3||2|
|1591 Hwy 42 E||
|2708 Ralph Ave||
|Single Family||Under Contract||$89,900||4||2|
|7826 Pleasure Walk Cir||
|2006 Lancelot Dr||
|1915 Rock Ridge Rd||
|2900 Park St||
|1804 Allston Ave||
|Single Family||Just Listed||$110,000||3||1|
|24 Bedinger Ave||
|Single Family||Back on Market||$119,900||3||2|
|212 Juniper Dr||
|2812 Chippewa Dr||
|424 Salt Lick Rd||
|Single Family||Under Contract||$122,500||4||2|
|1509 Clovernook Dr||
|Single Family||Under Contract||$124,900||3||3|
|142 Deer Run Drive||
|Single Family||Price Reduced||$128,900||3||2|
|6522 Cottagemeadow Dr||
|156 Old Woolen Mill Ln||
|Single Family||Under Contract||$139,900||3||2|
|1820 Huckleberry Ln||
|Single Family||Just Listed||$140,000||3||2|
|9958 Spruce Ln||
|Single Family||Under Contract||$149,900||3||2|
|21 Treestand Ct||
|Single Family||Price Reduced||$149,900||3||2|
|1030 Elmendorf Dr||
|Single Family||Under Contract||$149,900||4||3|
|122 Tracy Ln||
|101 Stoney Brooke Dr||
|Single Family||Price Reduced||$159,900||6||4|
|4283 Weavers Run||
|Single Family||Under Contract||$159,900||3||2|
|5714 Janet Lee Dr||
|Single Family||Under Contract||$171,900||3||2|
|1055 Buckland Pl||
|3344 Bluejay Dr||
|2589 Oregon Rd||
|1228 S 3rd St||
|2845 Satin Leaf Park||
|Single Family||Price Reduced||$209,900||3||2|
|2371 Creedmore Ct||
|114 Old Post Rd||
|Single Family||Just Listed||$235,000||4||3|
|11322 Top Walnut Loop||
|101 Helson Rd||
|Single Family||Just Listed||$269,900||3||2|
|952 Bristow Rd||
|5 Saddle Ridge Trl||
|Single Family||Just Listed||$299,900||3||4|
|20305 Country Club Dr||
check out the HomePath listings in Jefferson County!
Let your clients know these properties are available. Some have special incentives! Select the property address to find out more information.
Fannie Mae Offers Closing Cost Assistance on HomePath®
On February 13, Fannie Mae announced that homebuyers may receive up to 3.5% in closing cost assistance when they purchase a HomePath® property in 27 states during the FirstLook™ period. To be eligible for the incentive, the initial offer must be submitted between , and the loan must close on or before May 31, 2014. Please refer to the February 13, 2014 Fannie Mae News Release orHomePath.com for additional details and a list of states.
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Beginning January 1, 2009, all mortgagees shall provide the “Notification to Homeowners of the Kentucky Homeownership Protection Center” document to all Kentucky borrowers, as required by KRS 286.2-020. This form is available to download by going to http://www.kfi.ky.gov/nondepository/khpc.htm.
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Information on how to buy a home and avoid foreclosure as well as financial calculators and budgeting tools.
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The Kentucky Homeownership Protection Center works with counseling agencies to provide foreclosure prevention and intervention counseling services to Kentucky residents. If you are in danger of foreclosure or need budgeting and credit help, contact the Protection Center. A representative will call you to schedule an appointment with a counselor in your area at no cost to you.
Some areas of Kentucky have 2-1-1 service which you can call for additional services. Where available, 2-1-1 can help locate the services you need including food, utilities, medical care, toiletries, household items, furniture and security deposits for rental units.
The Salvation Army
The Salvation Army may have funding available to assist homeowners who are behind on their mortgage payments. Visit the Salvation Army Web site to find a location near you.
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HomePath Financing for Kentucky Homebuyers 2012
|HomePath Mortgage loans have the following characteristics:||HomePath Renovation loans have the following characteristics:|
|HomePath Mortgage allows a borrower to purchase a Fannie Mae-owned property with a low down payment, flexible mortgage terms, no lender-requested appraisal and no mortgage insurance. Expanded seller contributions to closing costs are allowed.
Benefits to You, the Borrower
|HomePath Renovation Mortgage allows a borrower to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation – up to 35% of the as completed value, no more than $35,000.
Benefits to You, the Borrower
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