Here are action steps you can take right now to buy a home in Kentucky in 2022

Here are action steps you can take right now to buy a home in Kentucky in 2022

1. Focus on your credit score

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

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

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

2. Manage your debt-to-income ratio

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

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

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

• repay existing debt;
• earn more income; or
• do both

3. Pay attention to your payments

Simply put, lenders want to lend to financially responsible borrowers.

Your payment history is one of the largest components of your credit score. To ensure on-time payments, set up autopay for all your accounts so the funds are directly debited each month.

FICO scores are weighted more heavily by recent payments so your future matters more than your past.

In particular, make sure to:

• Pay off the balance if you have a delinquent payment
• Don’t skip any payments
• Make all payments on time

4. Get pre-approved for a mortgage before you start shopping for a home loan.

Too many people find their home and then get a mortgage.

Switch it.

Get pre-approved with a lender first. Then, you’ll know how much home you can afford.

To get pre-approved, lenders will look at your income, assets, credit profile and employment, among other documents.

5. Keep credit utilization low on your credit cards

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

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

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

Here are some ways to manage your credit card utilization:

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

6. Look for down payment assistance in Kentucky

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

Here are a few:

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

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

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

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916

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

Text/call: 502-905-3708

email: kentuckyloan@gmail.com

https://kentuckyloan.blogspot.com/

Kentucky Housing Corporation (KHC)

Kentucky First-Time Home Buyer Programs 

. Kentucky Housing Corp or KHC
KHC is used for mostly applicants in urban areas of Kentucky that don’t have access to USDA or other government agencies to buy a home with no down payment.

Down Payment Assistance for Ky First Time Home Buyer, 100% Financing

Down Payment: There are still housing programs that exist for Kentucky home buyers whereas you can purchase a home with no down payment. You will need a 620 mid credit score to purchase a home using the KHC loan programs for their no down payment credit requirements.

How the Down Payment Assistance Program (DAP) Works

A minimum of 3.5% down payment is required with this loan. Down payment assistance loans are available from $4500-$6,000, and are paid back over a period of ten years. They are typically offered to buyers with limited cash reserves and carry an interest rate of 1 to 5.5%. 

These loans can make a critical difference to buyers for whom the down payment is an obstacle. Buyers whose 3.5% down payment is less than the $6000 limit may choose to use the remainder of a down payment loan to pay closing costs, further reducing the amount needed to bring to closing.

Home Buyer Eligibility
•  KHC can help both first time and repeat home buyers statewide.
•  Must be a U.S. citizen or legal status to be in U.S.
•  Applicant’s income ONLY through Secondary Market.
•  Property must be the borrower’s principal residence.
•  Any Borrower that meets both the income and purchase price limit can have access to 
Down Payment Assistance.

Kentucky Housing Credit Standards
•   620 minimum credit score required for FHA, VA, & RHS.
•   660 minimum credit score required for Conventional.
•   Debt ratios: 40/50%
•   Collections in most cases do not need to be paid-off in full.
•   Bankruptcies and foreclosures must be discharged two to seven years.
•   Non-taxable income can be grossed-up.

Property Eligibility
•  Both new and existing property.
•  Both new & existing Manufactured Housing.
•  With RHS only new construction Manufactured housing is allowed.
•  Purchase price limit of $346,644 for Secondary Market or $311,997 for Tax Credit.
•  Full appraisal required on all KHC loans.
•  With Existing Property, VA is the only loan product that requires a termite inspection.
•  A termite soil treatment certificate is required on ALL new construction properties 
except on conventional loans.

Joel Lobb (NMLS#57916)
Senior Loan Officer

text or call 502-905-3708 cell

kentuckyloan@gmail.com

This web site is not the FHA, VA, USDA, HUD or any other government organization responsible for managing, insuring, regulating or issuing residential mortgage loans.

All approvals and rates are not guaranteed, and are only issued based on standard mortgage qualifying guidelines

Remember, we are even available this weekend for pre-qualifications or questions. Call our cell phone or email us. If you miss us, leave a message and we WILL call you back