Credit Scores Needed for a Louisville Kentucky FHA, KHC, VA, USDA, and Conventional mortgage Loan

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What is the minimum credit score I need to qualify for a Kentucky FHA, VA, USDA and KHC Conventional mortgage loan in 2020?

What is the minimum credit score I need to qualify for a Kentucky FHA, VA, USDA and KHC Conventional mortgage loan in 2019?


Credit Score Requirements for a Conventional loan, USDA Loan, FHA Loan, VA loan in Kentucky

 

1. What kind of Credit Score Do I need to qualify?

When applying for a mortgage loan, lenders will pull what they call a “tri-merge” credit report which will show three different fico scores from Transunion, Equifax, and Experian. The lenders will throw out the high and low score and take the “middle score” For example, if you had a 614, 610, and 629 score from the three main credit bureaus, your qualifying score would be 614. Most lenders will want at least two scores. So if you only have one score, you may not qualify. Lenders will have to pull their own credit report and scores so if you had it ran somewhere else or saw it on a website or credit card you may own, it will not matter to the lender, because they have to use their own credit report and scores.
Most lenders will pull your credit report for free nowadays so this should not be a big deal as long as your scores are high enough.
The Secondary Market of Mortgage loans offered by FHA, VA, USDA, Fannie Mae, and KHC all have their minimum fico score requirements and lenders will create overlays in addition to what the Government agencies will accept, so even if on paper FHA says they will go down to 580 or 500 in some cases on fico scores, very few lenders will go below the 620 threshold.
If you have low fico scores it may make sense to check around with different lenders to see what their minimum fico scores are for loans.
The lenders I currently deal with have the following fico cutoffs for credit scores:
FHA–580 minimum score
VA—-580 minimum score
Fannie Mae–620 minimum score
USDA–620 minimum score
KHC with Down Payment Assistance –620 minimum score.
As you can see, 620 is the minimum score with most lenders for a FHA, VA, or Fannie Mae loan, and 620 is required for the no down payment programs offered by USDA for Kentucky for First Time Home Buyers wanting to go no money down.

 

Use These Findings to Boost Your Credit Score

Here are Magnify Money’s tips on improving a low credit score:

Step 1: Get a line of credit

In order to establish credit history, you need to have a form of credit. The simplest way for you to begin will be to open a credit card. If your score is low or non-existent, you’ll need to apply for a secured or store card.

  • Secured Card:  You’ll use your own money as collateral by putting down a deposit of a few hundred dollars with the bank. Typically, that amount will then be your credit limit. Once you prove you’re responsible, you can get back your deposit and upgrade to a regular credit card.

  • Store Card: People with a low credit score can often still get store cards because banks are more likely to approve users who apply through the store. The catch is that the interest rates are often very high.

Step 2: Keep your utilization rate low

Your goal should be to never exceed 30% of your credit limit. Ideally, you should be even lower than 30%, because the lower your utilization rate, the better your score will be.

We recommend you make one small purchase a month to keep your utilization low and help increase your credit score at a faster rate.

Step 3: Pay in full, and on time, each month

The easiest way to prove you’re responsible is to only charge what you can afford. Never use your credit card to buy an item you won’t be able to pay off on time and in full each month.

Being late on your payments has a very negative impact on your credit score.

There is also no advantage to only paying the minimum amount due on your card. That will only result in you paying interest, and does nothing to help your credit score. So just save yourself money and pay your entire bill.

2.  Do Mortgage Interest Rates Change Daily?

Just like the gas prices at the pump,  mortgage rates can change daily or throughout the day.  Typically mortgage rates are published at 10-11 am daily by most lenders and you can lock up through the close of business which is usually around 6-7 PM.  Mortgage rates can change up or down throughout the day based on various financial, economics, and geopolitical news in the US Financial markets and World markets. Generally speaking, good economic news is bad for rates and vice versa, bad economic news is good for mortgage rates.

The good news is this: Once you find a home and get it under contract, you can lock your mortgage loan rate. Typically it takes about 30-45 days to close a mortgage loan in Kentucky, so the typical lock is for 30-60 days. If rates get better you may be able to negotiate a better rate with your lender, but they usually have to improve by at least 25 basis points (.25) to do that. Not all lenders offer this option. The longer you lock the loan, the greater the costs. It is usually free to lock in a loan for up to 90 days without having to pay a fee.

What a lot of lenders are experiencing now is that some loans don’t close on time for various reasons. You can always extend the lock on the loan but it will costs you usually .125 basis points to do so. If you let the lock expire on the loan, then you have to take worse case pricing on that day when you go to relock. It is usually best to extend the lock on your loan.

 

 

3. What are the down payment requirements?

The most popular programs for Kentucky First Time Home Buyers usually involves one of the following housing programs outlined in bold below:

FHA:

FHA will allow a home buyer to purchase a house with as little as 3.5% down. If your credit scores are low, say 680 and below, a lot of times it makes sense to go FHA because everyone pays the same mortgage insurance premiums no matter what your score is, and the down payment can be gifted to you. Meaning you really don’t have to have any skin into the game when it comes to down payment. They even allow down payment assistance through eligible parties (government grants or non-profits). Lastly, FHA will allow for higher debt to income ratios with sometimes getting loan pre-approvals up to 55% of your total gross monthly income.

 

Fannie Mae:
Fannie Mae requires just 3% down with their new Home Possible Program, but if you use their traditional mortgage loan, then 5% is the Fannie Mae Standard. Fannie Mae will o down to a 620 score, but if your scores are below 680, I would look seriously at the FHA loan program because Fannie Mae has steep increases to the interest rate and the mortgage insurance premiums if your scores are low.
A couple of good things about Fannie Mae is that you can buy a larger priced home and have a large loan amount due to FHA only allowing most Kentucky Home Buyers a maximum mortgage loan amount of $314,750 price range while Fannie Mae will go up to Conforming loan limits of $484,500
Lastly when it comes to mortgage insurance, FHA mortgage insurance premiums are for life of loan while Fannie Mae mortgage insurance premiums drop off when you develop 80% equity position in your house.
But as a tell most people, nobody has a loan for 30 years, and the average mortgage is either refinanced or home sold within the first 5-7 years.

VA Loans- 

VA loans offer eligible Veterans and Active Duty Personnel to buy a home going no money down with no monthly mortgage insurance. This is probably the best no money down loan out there since the rates are traditionally very low on comparison to other government insured mortgages and no monthly mortgage insurance. The VA loan can be used anywhere in the state of Kentucky with the maximum VA loan limit being $484,500

 

USDA Loans- 

USDA loans offer people buying a home in rural areas (typically towns of $20k or less) to buy a home going zero down. You cannot currently own another home and there is household income limits of $75,000 for a household family of four, and up to $99,000 for a household of five or more. You search USDA website for eligible areas and household income limits below at the yellow highlighted link :

 

KHC or Kentucky Housing-
Kentucky First Time Home Buyers typically use KHC for their down payment assistance. KHC currently offers $4500 to $6000 for down payment assistance and sometimes throughout the year they will offer low mortgage rates on their mortgage revenue bond program. The down payment assistance usually never runs out because you have to pay it back in the form of a second mortgage.
It helps a lot of home buyers that want to buy in urban areas that cannot utilizer the USDA program in rural areas. Most of the time the first mortgage is a FHA loan tied with the 2nd mortgage fore down payment assistance.  All KHC programs require a 620 score and rates are locked for 45 days. Max income limits are usually set around $112k for a household with the max loan being $283,000 currently.

4. What if I have had a bankruptcy or foreclosure in the past? 

FHA and VA are the easiest on previous bankruptcies. FHA and VA both require 2 years removed from the discharge date on a Chapter 7. If you are in the middle of a Chapter 13, FHA will allow for financing with a 12 month clean history payment to the Chapter 13 courts, and with trustee permission.
VA requires 2 years removed from a foreclosure (sheriff sale date of home) and FHA requires 3 years.
USDA requires 3 years removed from both a foreclosure and bankruptcy, but on the foreclosure they do not go off the sale date. This may save you a little time if you had a previous foreclosure.
Fannie Mae (Conventional Loan)
Fannie Mae is by far the strictest. They require 4-7  years out of a foreclosure or bankruptcy
If you have questions about qualifying as first time home buyer in Kentucky, please call, text, email or fill out free prequalification below for your next mortgage loan pre-approval.

 

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 definitely recommend 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 2018

 

😃

 

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 July 2018
Wow,  what a great loan officer. I was referred to him by our agent and he was great to work with. We used him for a USDA no money down loan in  Shelby County and we were really impressed. We  were afraid we could not buy a home since we did not have money saved for a down payment, but Joe l was able to get us a zero down loan and we even got our appraisal fee and good faith deposit back at closing. We actually got money back at closing!!! I Can’t think him enough. Our family moved from our apartment in the south end  of town to get our own home with 5 acres  for our kids and 2 dogs, at a payment that is equal to our rent payment also. .Thanks Again Joel. May god bless you
Patty Locker
We contacted Joel about buying a house on our move from Ohio for my husband’s job transfer with Ford. We put a lot of trust in him since we were new to the area and first time home buyers in the Louisville KY market, and he always delivered on what he said. It took us a while to find a home due to the lack of homes,  but once we got one, he was always quick to respond our questions via text or email ,and kept us informed through the process. We got to meet him at the closing and he was super nice and even got us a closing gift for our home which we didn’t expect at all. Super nice guy 😀!!! I would definitely recommend him for a local Home loan in the Louisville area.
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Pam Dolby
I got a VA loan with Joel and he was great. He is an ex-army guy so he could relate to my past experiences of being a veteran and moving around the country a lot. I had some credit issues that required a little extra work but Joel was able to find A VA lender to approve my situation as far as having past bad credit problems and a lower credit score. We closed yesterday on our home here in Louisville and we could not be happier. We finally have a home of our own thanks to Joel . I would definitely recommend him for a mortgage loan. Great experience and closed 8 days before expected close date so we were able to move in early.
I contacted Joel about the $10,000 KY Housing Grant last month and we were able to get it and I just closed on my home. He was great to work with and if you are a first time home buyer here in Louisville, I would definitely contact him. I met him at his office and he was very nice and knowledgeable and kept me informed through the process. No surprises either so I was very happy. I am new homeowner thanks to Joel .
betty parsons


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





 
 

 

Joel Lobb (NMLS#57916)
Senior  Loan Officer

 
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
 


Text/call 502-905-3708

 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). I lend in the following states: Kentucky
Featured

Down payment Assistance for Kentucky First Time Home buyers 2020

Kentucky First Time Home buyers 2020


There are some other Kentucky  down payment assistance programs available now to buy a home no money down so read on below:

Kentucky First Time Home Buyer Common Questions and Answers:

 

∘ What kind of credit score do I need to qualify for different first time home buyer loans in Kentucky?

Answer. Most lenders will wants a middle credit score of 620 for KY First Time Home Buyers looking to go no money down. The two most used no money down home loans in Kentucky being USDA Rural Housing and KHC with their down payment assistance will want a 620 middle score on their programs.

If you have access to 3.5% down payment, you can go FHA and secure a 30 year fixed rate mortgage with some lenders with a 580 credit score. Even though FHA on paper says they will go down to 500 credit score with at least 10% down payment, you will find it hard to get the loan approved because lenders will create overlays to protect their interest and maintain a good standing with FHA and HUD.

Another popular no money down loan is VA. Most VA lenders will want a 620 middle credit score but like FHA, VA on paper says they will go down to a 500 score, but good luck finding a lender for that scenario.

A lot of times if your scores are in the high 500’s or low 600’s range, we can do a rapid rescore and get your scores improved within 30 days.

 

 Does it costs anything to get pre-approved for a mortgage loan?

Answer: Most lenders will not charge you a fee to get pre-approved, but some lenders may want you to pay for the credit report fee upfront. Typically costs for a tri-merge credit report for a single borrower runs about $50 or less. Maybe higher if more borrowers are included on the loan application.
∘ How long does it take to get approved for a mortgage loan in Kentucky?

Answer: Typically if you have all your income and asset documents together and submit to the lender, they typically can get you a pre-approval through the Automated Underwriting Systems within 24 hours. They will review credit, income and assets and run it through the different AUS (Automated Underwriting Systems) for the template for your loan pre-approval. Fannie Mae uses DU, or Desktop Underwriting, FHA and VA also use DU, and USDA uses a automated system called GUS. GUS stands for the Guaranteed Underwriting System.

If you get an Automated Approval, loan officers will use this for your pre-approval. If you have a bad credit history, high debt to income ratios,  or lack of down payment,  the AUS will sometimes refer the loan to a manual underwrite, which could result in a longer turn time for your loan pre-approval answer

 Are there any special programs in Kentucky that help with down payment or no money down loans for KY First Time Home Buyers?

Answer: There are some programs available to KY First Time Home Buyers that offer zero down financing: KHC, USDA, VA, Fannie Mae Home Possible and Home Path, HUD $100 down and City Grants are all available to Kentucky First Time Home buyers if you qualify for them. Ask your loan officer about these programs
∘ When can I lock in my interest rate to protect it from going up when I buy my first home?

Answer: You typically can lock in your mortgage rate and protect it from going up once you have a home picked-out and under contract. You can usually lock in your mortgage rate for free for 90 days, and if you need more time, you can extend the lock in rate for a fee to the lender in case the home buying process is taking a longer time. The longer the term you lock the rate in the future, the higher the costs because the lender is taking a risk on rates in the future.

Interest rates are kinda like gas prices, they change daily, and the general trend is that they have been going up since the Presidential election in November 2016.
∘ How much money do I need to pay to close the loan?

Answer: Depending on which loan program you choose, the outlay to close the loan can vary. Typically you will need to budget for the following to buy a home: Good faith deposit, usually less than $500 which holds the home for you while you close the loan. You get this back at closing; Appraisal fee is required to be paid to lender before closing. Typical costs run around $400-$450 for an appraisal fee; home inspection fees. Even though the lender’s programs don’t require a home inspection, a lot of buyers do get one done. The costs for a home inspection runs around $300-$400. Lastly, termite report. They are very cheap, usually $50 or less, and VA requires one on their loan programs. FHA, KHC, USDA, Fannie Mae does not require a termite report, but most borrowers get one done.

There are also lender costs for title insurance, title exam, closing fee, and underwriting fees that will be incurred at closing too. You can negotiated the seller to pay for these fees in the contract, or sometimes the lender can pay for this with a lender credit.

The lender has to issue a breakdown of the fees you will incur on your loan pre-approval.
How long is my pre-approval good for on a Kentucky Mortgage Loan?

Answer: Most lenders will honor your loan pre-approval for 60 days. After that, they will have to re-run your credit report and ask for updated pay stubs, bank statements, to make sure your credit quality and income and assets has not changed from the initial loan pre-approval.

 

How much money do I have to make to qualify for a mortgage loan in Kentucky?

Answer: The general rule for most FHA, VA, KHC, USDA and Fannie Mae loans is that we run your loan application through the Automated Underwriting systems, and it will tell us your max loan qualifying ratios.

There are two ratios that matter when you qualify for a mortgage loan. The front-end ratio, is the new house payment divided by your gross monthly income.  The back-end ratio, is the new house payment added to your current monthly bills on the credit report, to include child support obligations and 401k loans.

Car insurance, cell phone bills, utilities bills does not factor into your qualifying rations.

If the loan gets a refer on the initial desktop underwriting findings, then most programs will default to a front end ratio of 31% and a back-end ratio of 43% for most government agency loans that get a refer. You then take the lowest payment to qualify based on the front-end and back-end ratio.

So for example, let’s say you make $3000 a month and you have $400 in monthly bills you pay on the credit report. What would be your maximum qualifying house payment for a new loan?

Take the $3000 x .43%= $1290 maximum back-end ratio house payment. So take the $1290-$400= $890 max house payment you qualify for on the back-end ratio.

Then take the $3000 x .31%=$930 maximum qualifying house payment on front-end ratio.

So now your know! The max house payment you would qualify would be the $890, because it is the lowest payment of the two ratios.

  • Minimum 620 Credit Score
  • Max Purchase Price Limit of $314,827
  • Max Household Income Limits of  here in this link
  • Max debt to income ratios of 40% and 50% respectively with Approved Eligible Findings Or Refer Eligible on FHA Loans
  • No Bankruptcies last 2 years for FHA
Kentucky Mortgage Programs For First-Time Buyers in Kentucky

Apply Here Free!

 

Kentucky First Time Home Buyer Loans for 2020- Minimum Credit 620 for 100% Financing.
Kentucky First Time Home Buyer Loans for 2020- Minimum Credit 620 for 100% Financing.
• At least 3%-5% down
 Closing costs will vary on which rate you choose and the lender. Typically the higher the rate, the lesser closing costs due to the lender giving you a lender credit back at closing for over par pricing. Also, called a no-closing costs option. You have to weigh the pros and cons to see if it makes sense to forgo the lower rate and lower monthly payment for the higher rate and less closing costs.
Fico scores needed start at 620, but most conventional lenders will want a higher score to qualify for the 3-5% minimum down payment requirements Most buyers using this loan have high credit scores (over 720) and at least 5% down.
The rates are a little higher compared to FHA, VA, or USDA loan but the mortgage insurance is not for life of loan and can be rolled off when you reach 80% equity position in home.
Conventional loans require 4-7 years removed from Bankruptcy and foreclosure.
Max Conventional loan limits are set at $510,400 for 2020  in Kentucky
If you meet income eligibility requirements and are looking to settle in a rural area, you might qualify for the KY USDA Rural Housing program. The program guarantees qualifying loans, reducing lenders’ risk and encouraging them to offer buyers 100% loans. That means Kentucky home buyers don’t have to put any money down, and even the “upfront fee” (a closing cost for this type of loan) can be rolled into the financing.
Fico scores usually wanted for this program center around 620 range, with most lenders wanting a 640 score so they can obtain an automated approval through GUS. GUS stands for the Guaranteed Underwriting system, and it will dictate your max loan pre-approval based on your income, credit scores, debt to income ratio and assets.
They also allow for a manual underwrite, which states that the max house payment ratios are set at 29% and 41% respectively of your income.
They loan requires no down payment, and the current mortgage insurance is 1% upfront, called a funding fee, and .35% annually for the monthly mi payment. Since they recently reduced their mi requirements, USDA is one of the best options out there for home buyers looking to buy in an rural area.
A rural area typically will be any area outside the major cities of Louisville, Lexington, Paducah, Bowling Green, Richmond, Frankfort, and parts of Northern
Kentucky.
There is a map link below to see the qualifying areas.
There is also a max household income limits with most cutoff starting at $87,000 for a family of four, and up to $115,000 for a family of five or more.
USDA requires 3 years removed from bankruptcy and foreclosure.
There is no max USDA loan limit.
FHA loans are good for home buyers with lower credit scores and no much down, or with down payment assistance grants. FHA will allow for grants, gifts, for their 3.5% minimum investment and will go down to a 580 credit score.
The current mortgage insurance requirements are kinda steep when compared to USDA, VA , but the rates are usually good so it can counteracts the high mi premiums. As I tell borrowers, you will not have the loan for 30 years, so don’t worry too much about the mi premiums.
The mi premiums are for life of loan like USDA.
FHA requires 2 years removed from bankruptcy and 3 years removed from foreclosure.
Maximum FHA loan limits in Kentucky are set around $331,760.00 and below for 2020
Kentucky VA Loan

VA loans are for veterans and active duty military personnel. The loan requires no down payment and no monthly mi premiums, saving you on the monthly payment. It does have an funding fee like USDA, but it is higher starting at 2% for first time use, and 3% for second time use. The funding fee is financed into the loan, so it is not something you have to pay upfront out of pocket.

VA loans can be made anywhere, unlike the USDA restrictions, and there is no income household limit.

Most VA lenders I work with will want a 620 credit score though I am setup with lenders that will go down to a 560 credit score if I can get it approved.

VA requires 2 years removed from bankruptcy or foreclosure.

As announced previously by VA in Circular 26-19-30 (which provides interim guidance on implementing “The Blue Water Navy Vietnam Veterans Act of 2019”) the conforming loan limit cap on guarantees was removed for Veterans with full entitlement.  For Veterans who have previously used entitlement and the entitlement has not been restored, the maximum amount of guaranty entitlement available to the Veteran (for a loan above $144,000) is 25 percent of the conforming loan limit reduced by the amount of entitlement previously used (not restored) by the Veteran.  The new guaranty requirements apply for loans closed on or after January 1, 2020.

As a reminder, Veterans are able to use their VA Home Loan Guaranty benefit regardless of loan amount, but in order to purchase homes with loan amounts above the conforming loan limits, Veterans with partial entitlement may be required to make a down payment on amounts in excess of the conforming loan limit. Regardless of full or partial entitlement, the VA guaranty plus any required down payment must total 25% of the loan amount.

This type of loan is administered  by KHC in the state of Kentucky. They typically have $4500 to $6000 down payment assistance year around, that is in the form of a second mortgage that you pay back over 10 years.
Sometimes they will come to market with other down payment assistance and lower market rates to benefit lower income households with not a lot of money for down payment.
KHC offers FHA, VA, USDA, and Conventional loans with their minimum credit scores being set at 620 for all programs. The conventional loan requirements at 660
$6000 Kentucky housing grant for 2019 first time home buyers

Kentucky Home Buyers

Regular DAP for Kentucky Home Buyers in 2020

  • Purchase price up to $314,827 with Secondary Market.
  • Assistance in the form of a loan up to $6,000 in $100 increments.
  • Repayable over a ten-year term at 5.50 percent.
  • Available to all KHC first-mortgage loan recipients.
  • Secondary Market Income Limits here 

Affordable DAP for Kentucky Home Buyers in 2020

  • Purchase price up to $314,827 with Secondary Market.
  • Assistance up to $6,000.
  • Repayable over a ten-year term at 1.00 percent.
  • Borrowers must meet Affordable DAP income limits.

More about down payment and closing costs

  • No liquid asset review and no limit on borrower reserves.
  • Specific credit underwriting standards may apply to down payment programs.
This type of loan is administered  by KHC in the state of Kentucky. They typically have $4500 to $6000 down payment assistance year around, that is in the form of a second mortgage that you pay back over 10 years.
Sometimes they will come to market with other down payment assistance and lower market rates to benefit lower income households with not a lot of money for down payment.
KHC offers FHA, VA, USDA, and Conventional loans with their minimum credit scores being set at 620 for all programs. The conventional loan requirements at KHC requires 660 credit score.
The max debt to income ratios are set at 40% an 50% respectively.


Text/call 502-905-3708
kentuckyloan@gmail.com

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 definitely recommend 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 June 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

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346


Text/call 502-905-3708
kentuckyloan@gmail.com

http://www.nmlsconsumeraccess.org/
NMLS Consumer Access
 Accessibility Statement
Privacy Policy
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.

Text/call:      502-905-3708

fax:            502-327-9119
email:
kentuckyloan@gmail.com

Featured

How to qualify for a Kentucky FHA Home Loan ?


How to qualify for a Kentucky FHA Home Loan ?
How to qualify for a Kentucky FHA Home Loan ?

via How to qualify for a Kentucky FHA Home Loan ?

 

Kentucky FHA Loan Requirements for 2019

 

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

KHC Down Payment Assistance

Louisville Metro Housing Grant

Covington Kentucky Grants and Northern Kentucky Grants to Buy a Home

AFR Down Payment Assistance

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.

A Complete Guide to Closing Costs

Joel Lobb
Senior  Loan Officer
(NMLS#57916)
 Company ID #1364 | MB73346

 unnamed (2) (1)

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
(NMLS#57916)
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). 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.


 .

 

 

Featured

Kentucky Home buyers Down Payment Grants for 2020


Kentucky Housing has $6,000.00 in Down Payment Assistance for 2020

Here are action steps you can take right now to buy a home in Kentucky in 2020

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:

First Ratio – The first ratio, top ratio or housing ratio. Basically that means out of all the gross monthly income you make, that no more that X percent of it can go to your housing payment. The housing payment consists of Principle, Interest, Taxes and Insurance. Whether you escrow or not every one of these items are factored into your ratio. There are a lot of exceptions to how high you can go, but let’s just say that if your ratio is 33% or less, generally, across the board, you’re safe.

Second Ratio- The second ratio, bottom ratio or debt ratio includes the housing payment, but also adds all of the monthly debts that the borrower has. So, it includes housing payment as well as every other debt that a borrower may have. This would include, Auto loans, credit cards, student loans, personal loans, child support, alimony….basically any consistent outgoing debt that you’re paying on. Again, if you’re paying less than 45% of your gross monthly income to all of the debts, plus your proposed housing payment, then……generally, you’re safe. You can go a lot higher in this area, but there are a lot of caveats when increasing your back ratio.

3. 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

4 . 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:

 

5000 grant welcome home

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/

 

 

 

 

Featured

Kentucky FHA Loans Compared to Kentucky Conventional Loans


via Kentucky FHA Loans Compared to Kentucky Conventional Loans

 

Kentucky FHA Loans Compared to Kentucky Conventional Loans

 

When it comes to financing a home a buyer is faced with the decision of what type of loan they want. The two most common choices are FHA or Conventional. Both have their advantages and disadvantages. Follow the chart below to see which one is a fit for you!

For more information on homes available for FHA or Conventional

Which Loan is better for you?

Kentucky FHA Loans are good for borrowers who have the following:

• Credit scores less than 680.
• Less than 5% down payment and no reserves to use.
• Borrowers with past foreclosures between 3 and 7 years old.
• Borrowers with past short sales between 2 and 4 years old.
• Borrowers who need a gift for the down payment and/or closing costs, prepaid taxes and
insurance.
The FHA Mortgage Insurance premium is a premium that exists for the FHA Loan that is
paid up front and monthly by the homebuyer. This premium protects the lender should the
buyer default. They vary per state and per type of loan Kentucky home buyers qualify for. In Kentucky, upfront mortgage insurance premiums are 1.75%.
Below are the rates per type of loan:
• 15-Year Fixed with down payment more than 10%: .45%
• 15-Year Fixed with down payment less than 10%: .70%
• 30-Year Fixed with down payment more than 5%: .80%
• 30-Year Fixed with down payment less than 5%: .85%

Kentucky Conventional loans are usually reserved for the following:

• Credit scores greater than 680
• Greater than or equal to  5% down payment with reserves
• Borrowers with past foreclosures over 7 years old.
• Borrowers with past short sales between 5-7 years old.
• Borrowers who have a lot of money saved up and want to get rid of mortgage insurance within the first 5 years give or take. 20% equity position is needed for no mi

The biggest difference between conventional loans and FHA loans comes down to the mortgage insurance.  Mortgage insurance is more expensive for FHA loans, but the trade off is a lower fixed rate than conventional loans.

On Conventional loans there is no upfront mortgage insurance like FHA, and if you have a high credit score you can possibly get a lower monthly mi premium as compared to FHA where everybody gets the same mortgage insurance premium not matter your credit score or down payment.

Lastly, FHA Mortgage insurance is for life of loan, whereas Conventional mortgage insurance or pmi it’s called, is discontinued once you reach the 80% threshold equity position of your home loan.

Again, I would not get too caught in FHA having mortgage insurance for life of loan, because most loans are only kept open a minimum of 5-7 years so a lot of times it may make sense to go with the lower rate and pay the mortgage insurance with FHA because most people don’t hold their mortgage for 30 years.

 

You can call or text me with your questions and we can compare the differences based on your credit score, down payment and income.

 

FHA vs conventional loans comparison chart

Equal Housing Lender.  NMLS#:57916 http://www.nmlsconsumeraccess.org/Rates, terms, and program information are subject to change without notice. Subject to certain approvals, terms and conditions. This is not a commitment to lend.

Not part of any government lending agency and only lending in the State of Kentucky.

Looking at FHA loans vs Conventional loans can arm you with a lot of valuable information as these are the 2 most popular mortgage loan products today. Before getting to the content let’s look at some abbreviations that will need to be defined.

 

  • PMI stands for Private Mortgage Insurance
  • MIP stands for Mortgage Insurance Premium
  • Credit Scores are a numerical measure of your credit worthiness, the maximum score is 850
  • Debt-to-Income Ratio measures your monthly income versus your monthly obligations. A good rule of thumb is to try to be below 45%

 

FHA Loans vs Conventional Loans

 

fha loans vs conventional loans

 

Conventional Mortgage Benefits

 

  • Minimum Down Payment is 5%
  • Maximum loan amount is $424,100
  • 20% down payment preferred to avoid PMI
  • No upfront PMI
  • 3% Down Payment Conventional Loan Option is available
  • Mortgage Insurance is cheaper on a Conventional Loan at .51%
  • PMI expires once principal balance is less than 78%
  • Houses do not have to be owner-occupied (so they can be used at rentals)
  • Can purchase any condominium and townhome (no FHA regulations)

 

Conventional Mortgage Disadvantages

 

  • Significant upfront investment (20% down preferred)
  • Credit score of 620 required
  • No Down Payment Assistance
  • Down Payment must be at least 5% unless you qualify for a 3% conventional mortgage
  • Harder to Qualify for a Conventional Mortgage
  • No government inspection so the home can be in any quality
  • Only a portion of a down payment can be a gift
  • Interest rates are higher than FHA loans

 

Most of the disadvantages of conventional mortgages stem around qualifications and resources needed upfront. If a borrower has significant resources most of these disadvantages are of little consequence.

 

Conventional loan rates today

 

FHA Loan Advantages

 

The major advantage to going with an FHA loan is that there are much more lax credit standards you have to meet to obtain financing. Usually, FHA mortgages require a lower down payment, can work with lower credit scores, less elapsed time is needed if you have some credit problems (charge-offs, foreclosures) and you can use a non-occupant co-borrower or co-signer (who is a relative) to help you qualify for the loan. That way you can use blended ratios. Blended ratios are debt-to-income ratios that equally blend or combine the primary borrower’s income and the non-occupant co-borrower’s income and monthly payments to help get approval for the loan. Except for HomeReady (formerly Fannie Mae HomePath) mortgages, conventional loans do not allow you to use a non-occupant co-borrower.

 

  • Government-backed program. Ideal for first-time home buyers
  • Easier to obtain, lower credit scores needed and lower minimum down payment
  • Down Payment minimum is 3.5%
  • All of down payment can be a gift
  • Down Payment Assistance Available (in some circumstances)
  • No reserves required
  • Minimum credit score is 580 (for 3.5% down payment)
  • Home has to meet a minimum condition to be approved for FHA so there are less potential upfront repairs needed
  • Lower interest rates than conventional mortgages

 

 

FHA Loan Disadvantages

 

  • FHA loans require the owners to live in the home
  • Mortgage Insurance Premium required if borrowers put down less than 10%
  • Private Mortgage Insurance monthly cost is higher for FHA loans
  • Government Licensed Inspector required to inspect home before sale can be approved
  • FHA maximum loan limit is $271,050
  • Condominiums require FHA approval
  • FHA Loans take longer to process because of government requirements and all mandated repairs have to be completed before sales can be finalized

 

Most of these disadvantages involve extra requirements or limits added to the process of the house (see Pros and Cons of FHA Loans). Some of these might not be disadvantages depending on one’s personal situation, but they are extra steps to note. Since FHA mortgages are a government program, more care and consideration goes into the process, which may be better in some situations.

 

FHA loan rates today

 

Compare and Contrast FHA loans vs Conventional loans

 

There are four important numbers in deciding which loan you will go with: credit scores, down payment amount, debt-to-income, and mortgage insurance percentage rate. Conventional mortgages and FHA home loans have different limits and rates which are important to examine. They also have important differences which affect the availability of properties, the condition of the properties one wishes to buy and how your down payment can be paid. So comparing FHA loans vs Conventional loans can sometimes be a tricky endeavor.

 

Down Payment Requirements

 

  • Conventional Mortgages require between 5 and 20% upfront
    • In certain circumstances, down payments can be as low as 3% (Conventional 97 loan program)
  • FHA Mortgages have 2 possibilities
    • If Credit Score is 500-579 then 10% down payment is required (not all lenders will even go down this low)
    • If Credit Score is 580+ then 3.5% down payment is required

 

 

Debt-to-Income Ratio

 

  • Conventional Mortgages’ maximum debt-to-income ratio is 43% (hard cap)
  • FHA Mortgages’ maximum debt-to-income ratio is 45%
    • Soft cap as in certain circumstances this can be adjusted up to 50%

 

Mortgage Insurance Premium Rates

 

  • Conventional Mortgages PMI rate is .51% PMI
  • FHA Mortgages
    • If Down Payment is 10% or more the percentage is .80% MIP
    • If Down Payment is less than 10% the rate is .85% MIP.

 

Credit Score Minimum Requirement

 

  • Conventional Mortgage minimum credit score
    • Most lenders will require between 620 and 640
    • Some lenders it will be as high as 700
  • FHA Mortgage minimum credit score
    • Credit Score is a minimum of 500 if putting 10% down
    • Credit Score is a minimum of 580 if not

 

 

These four numbers are important to know and will affect one’s decision to pursue a particular type of home loan. Knowing your combination of numbers as you are looking to buy a house will help buyers find the best loans for their particular situation.

 

Other Comparisons

 

  • All sellers will take conventional mortgages and some sellers will not take FHA Loans
    • People looking for short-sells won’t take FHA because FHA has a longer closing process.
    • If sellers know there are FHA repairs that are needed in order to sell their house, they will not always accept FHA financing.

 

Thus, if one is wanting a low-risk transaction then the FHA home loan route is a better option to pursue, even though it limits your options for homes that you might wish to buy. If one is looking to fix-up a house and raise its equity quickly then a conventional loan is going to be more beneficial because there are no requirements as to the condition of the house and it’s occupied status.

 

Down Payment Gifting

 

  • Making the Down Payments (Assistance and Gifts)
    • Conventional mortgages have no assistance but can be partially fulfilled with a gift
    • FHA Mortgages have loans and assistance programs available and the whole down payment can be fulfilled with a gift

 

In this article, we have given you the basic parameters of FHA loans vs Conventional loans. The conventional loans are for people who have a better financial track record and can handle a larger upfront cost. Because of PMI, conventional loans are cheaper in the long run if you can put enough of a down payment to get rid of PMI. However, there are no down payment assistance programs to help you reach that goal. FHA loans are for people who are looking to build their investment and in some cases may not have a great financial track record. FHA loans have lower down payment requirements and many grants/forgivable loans to help people wanting to buy a first house in which to live for at least a few years. It is important to assess your situation and decide which mortgage is going to work better for your circumstances.

 

Conclusion

 

Both mortgages have a lot of benefits and drawbacks because they are designed for people with different needs. This article has hopefully helped you to get a basic understanding of the different terms and conditions of different mortgage packages when looking at FHA loans vs Conventional loans. Home buying can be an emotional roller coaster and the knowledge in this article will help you navigate the various emotional struggles of home buying.

 

 

 

 

 

louisville-kentucky-fha-mortgage-loan-guide-1-638

 

Featured

Louisville Mortgage Underwriting Guidelines


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Source: Louisville Mortgage Underwriting Guidelines

Louisville Mortgage mortgage underwriting guidelines will help you understand your loan options when purchasing or refinacing a home. Now that you have found your dream house, you are going to need to apply for a Louisville Mortgage mortgage loan. Your realtor will either recommend a banking institution or you may already have one in mind. You will be dealing with a loan officer who will be compiling all the data on you to see if you qualify for a loan to pay for this house. All lending institutions have different Underwriting Guildelines set in place when reviewing a borrower’s financial history to determine the likelihood of receiving on-time payments. The primary items reviewed are:

Income

Income is one of the most important variables a lender will examine because it is used to repay the loan. Income is reviewed for the type of work, length of employment, educational training required, and opportunity for advancement. An underwriter will look at the source of income and the likelihood of its continuance to arrive at a gross monthly figure.

Salary and Hourly Wages – Calculated on a gross monthly basis, prior to income tax deductions.

Part-time and Second Job Income – Not usually considered unless it is in place for 12 to 24 straight months. Lenders view part-time income as a strong compensating factor.

Commission, Bonus and Overtime Income – Can only be used if received for two previous years. Further, an employer must verify that it is likely to continue. A 24-month average figure is used.

Retirement and Social Security Income – Must continue for at least three years into the future to be considered. If it is tax free, it can be grossed up to an equivalent gross monthly figure. Multiply the net amount by 1.20%.

Alimony and Child Support Income – Must be received for the 12 previous months and continue for the next 36 months. Lenders will require a divorce decree and a court printout to verify on-time payments.

Notes Receivable, Interest, Dividend and Trust Income – Proof of receiving funds for 12 previous months is required. Documentation showing income due for 3 more years is also necessary.Rental Income – Cannot come from a Primary Residence roommate. The only acceptable source is from an investment property. A lender will use 75% of the monthly rent and subtract ownership expenses. The Schedule E of a tax return is used to verify the figures. If a home rented recently, a copy of a current month-to-month lease is acceptable.

Automobile Allowance and Expense Account Reimbursements – Verified with 2 years tax returns and reduced by actual expenses listed on the income tax return Schedule C.

Education Expense Reimbursements – Not considered income. Only viewed as slight compensating factor.

Self Employment Income – Lenders are very careful in reviewing self-employed borrowers. Two years minimum ownership is necessary because two years is considered a representative sample. Lenders use a 2-year average monthly income figure from the Adjusted Gross Income on the tax returns. A lender may also add back additional income for depreciation and one-time capital expenses. Self-employed borrowers often have difficulty qualifying for a mortgage due to large expense write offs. A good solution to this challenge used to be the No Income Verification Loan, but there are very few of these available any more given the tightened lending standards in the current economy. NIV loan programs can be studied in the Mortgage Program section of the library.

Debt

An applicant’s liabilities are reviewed for cash flow. Lenders need to make sure there is enough income for the proposed mortgage payment, after other revolving and installment debts are paid.

  • All loans, leases, and credit cards are factored into the debt calculation. Utilities, insurance, food, clothing, schooling, etc. are not.
  • If a loan has less than 10 months remaining, a lender will usually disregard it.
  • The minimum monthly payment listed on a credit card bill is the figure used, not the payment made.
  • An applicant who co-borrowed for a friend or relative is accountable for the payment. If the applicant can show 12 months of on-time cancelled checks from the co-borrowee, the debt will not count.
  • Loans can be paid off to qualify for a mortgage, but credit cards sometimes cannot (varies by lender). The reasoning is that if the credit card is paid off, the credit line still exists and the borrower can run up debt after the loan is closed.
  • A borrower with fewer liabilities is thought to demonstrate superior cash management skills.

Credit History

Most lenders require a residential merged credit report (RMCR) from the 3 main credit bureaus: Trans Union, Equifax, andExperian. They will order one report which is a blending of all three credit bureaus and is easier to read than the individual reports. This “blended” credit report also searches public records for liens, judgments, bankruptcies and foreclosures. See ourcredit report index.

Credit report in hand, an underwriter studies the applicant’s credit to determine the likelihood of receiving an on-time mortgage payment. Many studies have shown that past performance is a reflection of future expectations. Hence, most lenders now use a national credit scoring system, typically the FICO score, to evaluate credit risk. If you’re worried about credit scoring see our articles on it.

The mortgage lending process, once very forgiving, has tightened lending standards considerably. A person with excellent credit, good stability, and sufficient documentable income to make the payments comfortably will usually qualify for an “A” paper loan. “A Paper”, or conforming loans, make up the majority of loans in the U.S. and are loans that must conform to the guidelines set by Fannie Mae or Freddie Mac in order to be saleable by the lender. Such loans must meet established and strict requirements regarding maximum loan amount, downpayment amount, borrower income and credit requirements and suitable properties. Loans that do not meet the credit and/or income requirements of conforming “A-paper” loans are known as non-conforming loans and are often referred to as “B”, “C” and “D” paper loans depending on the borrower’s credit history and financial capacity.

Here are some rules of thumb most lenders follow:

  • 12 plus months positive credit will usually equal an A paperloan program, depending on the overall credit. FHA loans usually follow this guideline more often than conventional loans.
  • Unpaidcollections, judgments and charge offs must be paid prior to closing an A paper loan. The only exception is if the debt was due to the death of a primary wage earner, or the bill was a medical expense.
  • If a borrower has negotiated an acceptable payment plan, and has made on time payments for 6 to 12 months, a lender may not require a debt to be paid off prior to closing.
  • Credit items usually are reported for 7 years. Bankruptcies expire after 10 years.
  • Foreclosure – 5 years from the completion date. From the fifth to seventh year following the foreclosure completion date, the purchase of a principal residence is permitted with a minimum 10% down and 680 FICO score. The purchase of a second or investment property is not permitted for 7 years. Limited cash out refinances are permitted for all occupancy types.
  • Pre-foreclosure (Short Sale) – 2 years from the completion date (no exceptions or extenuating circumstances).
  • Deed-in-Lieu of Foreclosure – 4 year period from the date the deed-in-lieu is executed. From the fifth to the seventh year following the execution date the borrower may purchase a property secured by a principal residence, second home or investment property with the greater of 10 percent minimum down payment or the minimum down payment required for the transaction. Limited cash out and cash out refinance transactions secured by a principal residence, second home or investment property are permitted pursuant to the eligibility requirements in effect at that time.
  • Chapter 7 Bankruptcy – A borrower is eligible for an A paper loan program 4 years after discharge or dismissal, provided they have reestablished credit and have maintained perfect credit after the bankruptcy.
  • Chapter 13 Bankruptcy – 2 years from the discharge date or 4 years from the dismissal date.
  • Multiple Bankruptcies– 5 years from the most recent dismissal or discharge date for borrowers with more than one filing in the past 7 years.
  • The good credit of a co-borrowerdoes not offset the bad credit of a borrower.
  • Credit scores usually range from 400 to 800. Changes to lending standards are occurring on a daily basis as a result of tightening lending standards, and can vary from lender-to-lender– so this information should be considered simply a guideline. For conforming loans, most lenders will lend down to a FICO of 620, with additional rate hits for the lower-end credit scores and loan-to-values. When you are borrowing more than 80%, they typically will not lend if you have a FICO below 680. The FHA/VA program just changed their minimum required FICO to 620, unless you are qualifying a borrower with non-traditional credit. The few non-conforming loan programs that are still available typically require 30% down payment with a minimum FICO of 700 for self-employed and 650 for W-2 employees, and the loan-to-value will change with the loan amount.
  • A credit score below 600 may require an Alternative Credit mortgage program.
  • Misinformation on a credit report can be repaired! For more information see our credit repairsection.
  • The FTC states, “Credit repair companies take your money and vanish.” Anything a credit repair company does for a fee, a consumer can do for free. Be wary of these guys!
  • If a borrower falls behind on a payment, the creditor should be contacted as quickly as possible. Most creditors will work with a borrower who makes an initial good faith effort to communicate with them.

Savings

Lenders evaluate savings for three reasons.

  1. The more money a borrower has after closing, the greater the probability of on-time payments.
  2. Most loan programs require a minimum borrower contribution.
  3. Lenders want to know that people have invested their own into the house, making it less likely that they will walk away from their life’s savings. They analyze savings documents to insure the applicant did not borrow the funds or receive a gift.

Lenders look at the following types of accounts and assets for down payment funds:

Checking and Savings – 90 days seasoning in a bank account is required for these funds.Gifts and Grants – After a borrower’s minimum contribution, a gifts or grant is permitted.

Sale of Assets – Personal property can be sold for the required contribution. The property should be appraised and a bill of sale is required. Also, a copy of the received check and a deposit slip are needed.

Secured Loans – A loan secured by property is also an acceptable source of closing funds.

IRA, 401K, Keogh & SEP – Any amount that can be accessed is an acceptable source of funds.

Sweat Equity and Cash On Hand – Generally not acceptable. FHA programsallow it in special circumstances.

Sale Of Previous Home – Must close prior to new home for the funds to be used. A lender will ask for a listing contract, sales contract, or HUD 1 closing statement.

Debt vs Income Ratio

The percentage of one’s debt to income is one of the most important factors when underwriting a loan. Lenders have determined that a house payment should not exceed approximately 30% of Gross Monthly Income. Gross Monthly Income is income before taxes are taken out. Furthermore, a house payment plus minimum monthly revolving and installment debt should be less than 40% of Gross Monthly Income (this figure varies from 35%-41% contingent on the source of financing).

Example

An applicant has $4,500 gross monthly income. The maximum mortgage payment is:

$4500 X .30 = $1350

Their total debts come to:

$500 Car
$20 Visa
$30 Sears
$75 Master Card
—————-
$625 per month.

Remember, their total debts (mortgage plus other debts) must be less than or equal to 40% of their gross monthly income.

$2,800 X .40 = $1800

$1800 is the maximum debt the borrower can have, debts and mortgage payments combined. Can the borrower keep all their debts and have the maximum mortgage payment allowed? NO!

In this case, the borrower, since they have high debts, must adjust the maximum mortgage payment downward, because:

$625 debts
$1350 mortgage
————–
$1975 – which is more than the $1800 (40% of gross debt) we calculated above.

The maximum mortgage payment is therefore:

$1800 – $625 (monthly debt) = $1175.

ECOA-TRANS-BEST-75x105

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Featured

Kentucky Housing Corporation Products on FHA, VA, USDA for both Refinance and Purchase Transactions


Kentucky Housing Corporation Products on FHA, VA, USDA for both Refinance and Purchase Transactions!
Products Offered:  Conventional Financing with No MI

  • 97% Financing with No Mortgage Insurance/100% Financing with Down Payment Assistance
  • 680 Minimum Credit Score, Maximum Debt Ratio 45%
  • Down Payment can be Gifted

FHA/VA Purchase

  • 96.5% Financing/100% Financing with Down Payment Assistance
  • 640 Minimum Credit Score, Maximum Debt Ratio 45%
Property Eligibility
  • Purchase price limit: $243,000
  • Owner Occupied Transactions Only
  • One-unit, SFR (attached or detached), new or existing property located in Kentucky.
  • May own other real estate at closing except with Conventional No MI program
  • Borrower(s) must qualify with inclusion of the second home or investment property monthly payment.

Manufactured Housing

  • FHA Transactions Only, Doublewides Only
  • Affidavit of Conversion of Real Estate is required
  • An engineer’s certification report is required verifying the property meets the guidelines published in the Permanent Foundations Guide for manufactured housing.

Condominiumns

  • Condominium or PUD’s must follow agency guidelines
  • For FHA, condominium must be listed on HUD’s website as approved
  • For Conventional No MI, must be approved by Fannie Mae
  • KHC website has a condo list. This list must be used to determine if additional interior insurance coverage is required. This does not warrant that the condo is approved by HUD or Kentucky Housing. If condo is not listed, proof of whether the interior coverage is included in the master policy is required. If not, a separate interior policy equal to half of the total loan amount is required

 

Down Payment Assistance Program
Regular DAP
  • Income Limits must meet secondary market limits
  • Eligible on new and existing properties
  • Allowed up to $6,000. Must go maximum LTV allowed on first mortgage amount. The Conventional NO MI program can go to 95% LTV
  • Terms: 5.50% amortized over 10 years
Regular DAP
  • Income limits must meet Affordable Income Limits. Income limits for the Affordable DAP are determined off of Household Income
  • Eligible on new and existing properties
  • Allowed up to $4,500. Must go maximum LTV allowed on first mortgage amount. The Conventional No MI program can go to 95% LTV
  • Terms: 1% amortized over 10 years

Email me at kentuckyloan@gmail.com with your questions

I specialize in Kentucky FHA, VA ,USDA, KHC, Conventional and Jumbo mortgage loans. I am based out of Louisville Kentucky.  For the first time buyer with little money down, we offer Kentucky Housing or KHC loans with down payment assistance.

 

This website is not an government agency, and does not officially represent the HUD, VA, USDA or FHA or any other government agency.

NMLS# 57916 http://www.nmlsconsumeraccess.org/

Joel Lobb

Senior  Loan Officer
(NMLS#57916)
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
 phone: (502) 905-3708
 Fax:     (502) 327-9119
 Company ID #1364 | MB73346

 

Featured

What Credit Score do You Need to qualify for a FHA VA KHC USDA Kentucky Mortgage


 

What Credit Score do You Need to Buy a Home?

Call me today for a free credit report–502-905-3708 or email me at kentuckyloan@gmail.com

When it comes to mortgages and credit scores, there are two really important questions to ask:

–What credit score do I need to qualify for a mortgage?

–What credit score do I need to get the lowest interest rate on a mortgage?

These different but related questions are important if you are looking to buy a home. And the second question is particularly important. With a high FICO score, you can literally save tens of thousands of dollars in interest over the life of a home loan. So let’s take a look at both questions. And if you don’t know you score, be sure to get you free credit score.

What credit score do you need to qualify for a mortgage?

The first thing to keep in mind is that qualifying for a mortgage involves a lot more than just a credit score. While your FICO score is a very important ingredient, it is just one factor. Lenders also look at your income and level of debt, among other things.

As a rule of thumb, however, a credit score below 620 will make buying a home very difficult. A FICO score below 620 is considered sub-prime. In the past there were mortgage companies that specialized in sub-prime mortgages. Because of the challenges in the credit market over the last year or so, however, sub-prime loans have become difficult if not impossible to obtain.

A FICO score between 620 and 650 is considered fair to good credit. But keep in mind, this range of credit scores does not guarantee you will qualify for a mortgage, and if you do qualify, it won’t get you the lowest interest rate possible. Still, to buy a home aim for a score of at least 620, recognizing that other factors weigh in the decision and that some banks may require a higher score.

What credit score do you need to get a low rate mortgage?

It use to be that a score of about 720 would yield the lowest mortgage rates available. Today, the best rates kick in with a FICO score of 760. And interest rates go up significantly as your credit score drops. To give you an idea, the following table shows current rates by credit score and calculates a monthly principal and interest payment based on a $300,000 loan:

Eligibility Requirements  for a Kentucky  FHA Loan after September 15, 2015

When applying for eligibility for A Kentucky  FHA Loans, There are some factors taken into account:
  • Credit score 620 and above with the mortgage investors we work with, even though FHA will insured lower credit scores, most mortgage lenders will create overlays
  • No bankruptcies (Chapter 7) in last 2 years with clean credit afterwards and 3 years after a foreclosure or short sale
  • 3.5% Down payment. Can be gifted or money saved-up or money taken out of 401k or retirement account. No cash gifts or unsourced deposits are allowed for down payment on a FHA loan.
  • Debt to income ratios can be up to 55% on an Approved Eligible Files but restricted on manual underwrites to 31% and 43% respectively.
  • Overtime or bonus income needs to show a 2 year history for it be eligible for income qualifying on a FHA loan. FHA underwriters typically will take a 2 year average.
  • FHA appraisals with the new changes now call for the FHA appraiser to check and review the home more thoroughly, hence the typical costs of a FHA appraisal has gone from $325 to $425 due to more legwork involved on a FHA appraisal.
  • Any disputes on credit bureau will need to be taken out of dispute status typically for your credit scores to be validated, so please be aware of this.
  • Rent references are usually not called for unless your file get downgraded to a manual
  • FHA mortgage insurance the upfront and annual mi monthly fee is for life of loan.
  • A lender may approve a borrower if:  acceptable payment history and  no major derogatory credit on revolving accounts in the last 12 months. “Acceptable payment history” means:  the borrower made all housing and installment debt payments on time for the previous 12 months, and  there are no more than two 30‐day late mortgage or installment payments in the last 24 months. “Major derogatory credit” means:  payments made more than 90 days after the due date, or  3 or more payments made more than 60 days after the due date.
  •  Child support income is Allowed If using a voluntary payment agreement, the lender:  obtains 12 months canceled checks, deposit slips, or tax returns.  For divorce decree, legal separation agreement, or court order if there is evidence of receipt for the most recent 6 months, may use the current payment to calculate income, &  if there are not 6 months of consistent payments, may average the income received over the prior 2 years, or less if the income has not been received that long  4000.1 II.A



Joel Lobb
Senior  Loan Officer
(NMLS#57916)
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). 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.
Co-branded Daily Rate Report for:
joel lobb
Louisville Mortgage Group
License:  NMLS# 57916
I specialize in Kentucky FHA, VA, USDA, KHC, Jumbo and Fannie Mae mortgage loans in Ky. I have helped over 589 Kentucky families buy their first home and refinance their current mortgage for a lower rate; For the first time buyer with little money …view more
Email Me | Visit My Website
(502) 905-3708
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Featured

Why You Can’t Get a Louisville Kentucky FHA, VA, KHC, USDA, Rural Housing and Fannie Mae Home Loan

Why You Can’t Get a Louisville Kentucky FHA, VA, KHC, USDA, Rural Housing and Fannie Mae Home Loan


Why You Can’t Get a Home Loan.

Why You Can’t Get a Louisville Kentucky FHA, VA, KHC, USDA, Rural Housing and Fannie Mae Home Loan

Credit

This is probably the most common hurdle. Lenders will have a qualifying credit score depending on the loan type, your background and other details. That baseline also applies to anyone else on the mortgage. So you might have an 800 credit score, but if your spouse is lagging at a 530, you’re going to struggle to obtain financing.

Even if you’re going it alone, lenders in community property states may still factor in your spouse’s credit. The average credit score for conventional purchase loans was 762 in September, according to mortgage software firm Ellie Mae. For FHA loans it was 701. Military borrowers interested in using their VA loan benefits will generally need at least a 620 score.

Debt-to-Income Ratio

Conventional and FHA lenders look at two different debt-to-income (DTI) ratios. The first, or front end, ratio compares your monthly income to your housing costs. The second, or back end, ratio considers the percentage of your income that goes toward major revolving debts like the mortgage payment, credit card bills, student loans and others.

Conventional lenders are generally looking for a 28 percent DTI ratio on the front end and 36 percent on the back end. For FHA loans, it’s more like 31/43. The VA program only uses the back-end ratio and wants to see 41 percent or less.

Your DTI ratio may not be an immediate application killer. Lenders calculate it based in part on your estimated monthly mortgage payment. It might break your heart, but you can always run the numbers with a lower loan amount to try and get that ratio into qualifying range.

Cash on Hand

Down payment requirements are here to stay (unless you qualify for a VA- or USDA-backed mortgage). Conventional lenders typically require at least a 5 percent downpayment, while the minimum on FHA loans is 3.5 percent. In addition, you’ll likely need to put down earnest money, which is basically a good-faith deposit with a seller, and be able to cover an appraisal, a home inspection and possibly other up-front costs.

Assets have become increasingly important in this tighter lending environment.

[Related Article: CFPB Could Pass New Mortgage Rules Soon]

Employment

Lenders want to see stable, reliable income and employment that’s likely to continue. The gold standard is generally two years, but that can vary depending on the lender, the loan type and the borrower’s circumstances.

For example, service members who separate from the military and take civilian jobs may not have to wait two years depending on how the new employment relates to their skillset, education and previous work serving our country.

What’s especially problematic is self-employment. There are a lot of unknowns for lenders here, and they’re almost always going to require at least two years of tax returns. Same goes for seasonal workers and those who work on commission.

Bankruptcy or Foreclosure

Foreclosure starts hit a 71-month low in November, according to RealtyTrac, but they’ve impacted hundreds of thousands of homeowners since 2008. More than 1.2 million people filed for bankruptcy protection in federal court in FY2012.

Each presents short- to medium-term obstacles to obtaining home loans. The waiting periods vary by event and by loan type. Bankruptcy means waiting anywhere from two to four years in many cases. The wait after a foreclosure can range from two to seven years.

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

 

Featured

How Long Do I Have To Be Employed to Qualify for an Kentucky FHA Loan?


How Long Do I Have To Be Employed to Qualify for an Kentucky FHA Loan?

Another Satisfied Home Buyer! Let us help you buy your next Kentucky Home. Great Rates and local, friendly, honest advice. Zero Application FEES! Free Credit Report on all April Applications
Another Satisfied Home Buyer! Let us help you buy your next Kentucky Home. Great Rates and local, friendly, honest advice. Zero Application FEES! Free Credit Report on all April Applications

The Kentukcy FHA loan application process includes many steps, including running a credit report and having the Kentucky FHA borrower fill out paperwork with personal information like open lines of credit and current income. Applying for a government home loan also requires giving the lender two types of personal history–a record of where the borrower has lived and where the borrower has worked.

KEntucky FHA requirements dictate furnishing at least a two-year work history, but that requirement shouldn’t be mistaken for an employment minimum. According to the FHA’s official site, “FHA does not impose a minimum length of time a borrower must have held a position of employment to be eligible for a mortgage.”

What does a buyer do if they can’t show at least a two-year work history? Some KEntukcy FHA home loan applicants who recently graduated from college or have separated from the military may wonder if they have reduced chances of getting an FHA loan approved because they can’t show a history of traditional employment.

In the case of military members, especially Guard and Reserve members who may have joined and been called to active duty right away because of wartime operations, the military service itself is viewed as employment.

There’s no liability or negative consequences as a result of military service, especially where a government home loan application is concerned. The FHA requests a copy of discharge paperwork or related documents to establish a military work history.

For students, part-time work and internships may be interpreted as employment under the right circumstances, but regardless all the FHA requires is supporting documentation of college attendance. College transcripts are usually sufficient. There is one caveat–according to the FHA official site, “…You must prove steady income for at least three years, and demonstrate that you’ve consistently paid your bills on time.”

Steady income for college students may be more difficult to demonstrate, but those on work-study programs, lengthy internships or other programs may find it easier to get Kentucky FHA approval for a home loan than those who studied full-time but did not work. In the end, it’s up to the lender and the FHA to determine what college experience is worth on the Kentucky FHA loan application.

How Long Do I Have To Be Employed to Qualify for an Kentucky FHA Loan?

Free Application and Credit call today 502=905=3708 or email kentuckyloan@gmail.com
Free Application and Credit call today 502=905=3708 or email kentuckyloan@gmail.com
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
Featured

Kentucky Rural Development Kentucky Guaranteed Housing Zero Down


 This website is not an Government Agency, and does not officially represent the HUD, VA, USDA or FHA or any other government agency

  

Kentucky Rural Development

Kentucky Guaranteed Housing

Home Financing Options for Lenders

Think Guaranteed First!

Do you have clients with no down payment?  Do you have clients with some cash but they do not wish to exhaust all of it to buy a home?   How many times have you pre-qualified an applicant only to realize that the mortgage insurance or higher interest rates keep them out of the price range needed to accommodate their family?   The Rural Development guarantee may be able to help!

  • Generous income limits
  • Flexible credit and qualifying ratios can help open up a new market of homebuyers.
  •  Competitive 30 year fixed rates – no monthly mortgage insurance allows you to offer affordable payments to all homebuyers.
  • No down payment and no cash reserve requirements help you qualify more clients.
  • No maximum purchase price or mortgage limit.
  • Become an expert in Guaranteed Rural Housing financing to gain more clients and close more loans in small communities and rural areas.

Rural Development assists thousands of clients annually to become homeowners.  This year we want you as our partner!

The advantages

  • Loan up to appraised value plus the guarantee fee.
  • No monthly mortgage insurance (MI).
  • Maximum loan amount is the appraised value plus a one time guarantee fee.
  • No cash contribution or cash reserves required from applicant.
  • Unrestricted gifts.
  • Non-traditional credit acceptable.
  • Streamlined credit documentation available – based upon credit.
  • No minimum credit score.
  • Repayment ratios are 29/41.  Ratio waivers are allowed with documented compensating factors.
  • Not limited to first-time home buyers.
  • Competitive market based fixed interest rates with 30 year term.
  • Available secondary markets: wholesale lenders as well as Fannie Mae, Freddie Mac, and Ginnie Mae.
  • Qualifies for Community Reinvestment Act (CRA)
  • Agency approved lenders underwrite the loan.
  • Any lender, or broker, may originate loans through an Agency approved lender.
  • Agency guarantee commitments are issued within 1-2 business days of receipt of the complete package – based on volume of loan requests.
  • Rural Development provides lender support for questions, training, and outreach assistance.

 Choose Rural Development as the first option

  • A competitive fixed rate combined with no mortgage insurance provides long term savings for the customer.
  •  Home buyers are able to retain their savings since there is no down payment requirement and closing costs can be financed up to the appraised value.
  • Lenders report an overwhelming preference for the Guaranteed Rural Housing loans for the great value it provides to their customers.  Choose the best program for your customers!

Applicant eligibility criteria: 

  • Occupy the property as your primary residence.
  • Be able and willing to occupy the property.
  • Be a U.S. citizen, a U.S. non-citizen national or a qualified alien.
  • Demonstrate an ability and willingness to meet obligations and debts as they become due.
  • Have a credit history that indicates a willingness to meet obligations as they become due.
  • Have an adjusted household income that is within Rural Development guidelines based on the number of persons who will occupy the home.
  • Purchase a residential property that is within a Rural Development eligible area.

 Checklists and web site links:

  What is the Rural Development “guarantee?

  • Lenders have less risk with the Rural Development guaranteed loans than with conventional loans covered by private mortgage insurance.

Thank you for visiting our web site.  We look forward to working with you as partners in providing affordable housing opportunities in rural areas.  Let us know how we can further serve you.

Apply today for Free Below:

 
Apply below for free–I am a USDA Expert and have done over 200 USDA loans in my lifetime in Kentucky

 

 

 

 

 

 

 

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Featured

HARP 2.0 Refinance Guidelines for Fannie Mae and Freddie Mac Louisville Kentucky Mortgage Loans


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HARP 2.0 Frequently Asked Questions

HARP has been expanded to help more homeowners qualify for refinancing their

Louisville Kentucky Mortgage Loans

 – even those with little or no equity available.

With HARP you could take advantage of low interest rates and other refinancing benefits even if the value of your home has declined and you owe more than your home is worth.

The questions and answers below will help you better understand how this program can help you refinance your underwater mortgage:

  • What does it mean to Refinance my Louisville Kentucky Mortgage Loan?When you refinance your mortgage, you are applying for a new mortgage, which replaces your current home loan.
  • What does it mean to be upside down on my mortgage?The terms “Upside Down”or “Underwater” simply mean that you owe more on your home loan than your property may appraise or sell for.The percentage that you are upside down is factored into what’s called a Loan-to-Value(LTV) ratio. So, if you owe $125,000 on a property that is valued at $100,000, then your LTV would be 125%.With the new updates to the HARP 2.0 program, borrowers with an LTV ratio greater than 125% may now qualify for a new refinance, provided they meet the other criteria.
  • What is the difference between a refinance and a loan modification?Basically, a modification is a change to an existing loan, where a refinance is a new loan.A Refinance on your loan means that you get a new loan to pay off an existing mortgage.A modification is for borrowers who are behind on their mortgage payment, or struggling to remain current, and are either not eligible for a refinance or it will not help them maintain their payments.
  • What changes were made to HARP that may make me eligible now?There were several changes to HARP, but the primary enhancement removed the limit on the amount that homeowners could be underwater (owe more on their mortgage than their home is worth). With that change, many homeowners who were not eligible will now qualify.The amount a borrower owes on a mortgage compared to the appraised value of a property is called Loan-to-Value (LTV).With the release of “HARP 2.0” guidelines, the original 125% LTV Cap was lifted, which will essentially allow borrowers who owe more than 125% on their first mortgage the ability to qualify for a new refinance, provided they meet the other underwriting and program criteria.
  • Is HARP the only refinance program available for underwater homeowners?HARP is one of several refinancing options available to eligible homeowners. However, HARP is unique because it is the primary refinance program that enables eligible borrowers with little to no equity in their homes to take advantage of low interest rates and other refinancing benefits.Making Home Affordable is a trademark of the United States Department of the Treasury.
  • How can I find out whether my loan is owned by Fannie Mae or Freddie Mac?Only mortgages owned or guaranteed by either Fannie Mae or Freddie Mac are eligible for refinance under the enhanced and expanded provisions of HARP. You can confirm that your mortgage is owned by either Fannie Mae or Freddie Mac by checking the following Web sites:http://fanniemae.com/loanlookup/ 
    http://freddiemac.com/mymortgage
  • Who is Fannie Mae?Fannie Mae is a government-chartered company with a mission to provide a stable source of funding to the U.S. housing and mortgage markets.The company purchases and securitizes mortgage loans to ensure that money is consistently available to financial institutions that lend money to home buyers.
  • What is the difference between a lender and a servicer?Your mortgage lender is the financial institution that gave you your mortgage loan.Your servicer is the financial institution that you send your monthly payment to. Your servicer is responsible for collecting your payments and crediting your account.You can find your mortgage servicer contact information on your monthly statement or coupon book.
  • On The Fannie Mae loan lookup tool, what does “Match Found” mean?A “Match Found” response to your search in the Fannie Mae Loan Lookup means that Fannie Mae owns a loan at the address entered in the search, however, it does not guarantee or imply that you will qualify for a Fannie Mae loan refinance or loan modification.
  • My loan is owned by Fannie, but it says that I don’t qualify for HARP?This is because Fannie Mae needed to receive your loan on May 31, 2009 or before.
  • Does Fannie Mae own my first and second mortgage?Fannie Mae generally owns primary (first-lien) mortgages only. A “Match Found” on the Fannie Mae Loan Lookup Tool means that they own the primary mortgage on the address entered in the search field.To find out who owns your second mortgage, refer to your monthly mortgage statement or contact the mortgage servicer to whom you send your monthly payment to.
  • What if I have an adjustable-rate mortgage (ARM)?HARP allows you to replace your adjustable-rate mortgage and many homeowners opt for a more stable fixed-rate mortgage.Every adjustable-rate mortgage is different, but refinancing may still provide you with a lower monthly payment, and allow you to avoid the sometimes large payment increase that comes once your ARM initial rate ends. The stability of a fixed monthly payment will give you security in knowing what you’ll owe every month.
  • Will the lender require an appraisal with a new HARP loan?Maybe – Even though the new updates to this program are intended to give borrowers with a Loan-to-Value (LTV) ratio above 125% the ability to refinance, lenders will still run an online valuation or require a full appraisal.Fannie Mae and Freddie Mac are updating their systems as this program progresses, but a good rule-of-thumb to follow is that loans under 125% LTV will generally not have an appraisal.If the appraisal is not conducted because of what is called PIW (Property Inspection Waiver), there will still be a $75 fees paid to Fannie Mae. Irrespective of what the appraisal value comes out to be, the loan would go through. However, some lenders may still cap the LTV to 150% – 200% or more, mainly depending on how the market reacts to this new program. Basically, expect LTV, Appraisal and Lending Limits to vary between lenders, and the time of the month.
  • Do I have to refinance through my current lender?No – As of March 19, 2012, Fannie Mae and Freddie Mac have opened this program up to non-servicing mortgage lenders.This is a huge benefit to borrowers in the fact that you have an opportunity to find a bank or mortgage broker who specializes in the new HARP program and can offer competitive rates.
  • Am I eligible for a refinance if my current loan has mortgage insurance (MI)?Yes, and the good news is that most of the mortgage insurance companies are working with HARP lenders to make the process as seamless as possible.Your new lender will do the work to make sure your current mortgage insurance scenario is similar to what you were, or were not paying.
  • Will I have to pay MI with a HARP since my new LTV will be >80%?No – If you did not originally have mortgage insurance due to the fact that your original LTV was less than 80% when acquired that loan, you will not be required to have MI, even though your new Loan-to-Value ratio will be greater than 80%.
  • I did not put 20% down when I purchased my property, but I do not have MI?If your current loan at the time of closing was over 80% and you are not paying a monthly Mortgage Insurance, most likely you have a Lender Paid Mortgage Insurance (LPMI).And yes, you would be able to refinance if you have an LPMI. Your lender will simply need to transfer the same coverage level from your current MI company to the new HARP 2.0 Refinance.
  • Can I Combine My First And Second Mortgage Into The New HARP Refinance?No – HARP does not allow for cash-out refinances or combining a first and second.Your new lender will order a subordination from your current second mortgage holder, which may require a fee.To quote the guidelines: “The refinance will not have a cash-out component, except for closing costs and certain de minimis allowances to cover items such as association fees, property tax bills, insurance costs, and rounding adjustments.
  • Will the lender need to verify income, assets and employment?Fannie Mae doesn’t expressly ask for Income, Employment or Asset verification for HARP 2.0 Loans. But, Fannie Mae suggests that the lender must obtain a verbal verification of employment (VOE) and verify the borrower’ss source of non-employment income, plus obtain any other income documentation as required by the Underwriting Findings Report.The borrower’s ability to repay the mortgage loan is based primarily on the acceptable payment history of the existing mortgage and the borrower benefit provisions. The acceptable payment history is no late in last 6 months and no more than one 30 days late in 7-12 months.If the borrower’s principal and interest payment is increasing more than 20%, the borrower must be re-qualified for the new loan, including verification of all income sources and amounts, and verification of any assets needed to close.Basically, your new lender will run your application through an online Fannie Mae or Freddie Mac approval engine, which will then provide a list of necessary documentation you need to prepare for loan submission.
  • Can I qualify for a new loan on an investment property or second home?All occupancy types i.e. Primary Residence, Second Homes and Investment Properties are allowed with HARP, even if the occupancy type has changed since the time of the original loan.Aliquam porttitor metus felis. Curabitur euismod porta justo ut mattis. Mauris condimentum ultrices justo, ac suscipit leo tempor eget
  • Are All Borrowers on the existing mortgage required to be on the new loan?Borrower(s) may be removed through the new transaction, provided that:a) The lender obtains documented evidence that the remaining borrower has been making payments from his or her own funds for the past 12 months, andb) The borrower(s) being removed is also removed from the deed.If the borrower(s) is being removed due to death, however, evidence that the remaining borrower(s) has been making payments from his or her own funds is not required.
Joel Lobb (NMLS#57916)

HARP REFINANCE QUESTIONS?

HARP 2.0 Refinance Guidelines for Fannie Mae and Freddie Mac Louisville Kentucky Mortgage Loans

You can determine whether your mortgage is owned by either Fannie Mae or Freddie Mac by checking the following Web sites:

http://www.fanniemae.com/loanlookup/
http://www.freddiemac.com/mymortgage

Fannie Mae and Freddie Mac have adopted changes to the Home Affordable Refinance Program (HARP) and you may be eligible to take advantage of these changes. If your mortgage is owned or guaranteed by either Fannie Mae or Freddie Mac, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP.

We Are Not The Government. All approvals and rates are not guaranteed, and are only issued based on standard HARP or other mortgage qualifying guidelines.  Equal Opportunity Lending, Fair Credit, Truth in Lending, and their own local and state RESPA, or otherwise lending laws. Privacy Statement | Equal Housing

Making Home Affordable is a trademark of the United States Department of the Treasury.

Call us at 502-905-3708 today, or CLICK HERE to apply online.

Joel Lobb (NMLS#57916)
Senior  Loan Officer
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All Current FHA, VA, KHC, USDA , Fannie Mae Programs for a mortgage in Kentucky with our company require a FICO Score of 640-We take your middle score.


What Credit Score do You Need to qualify for a FHA VA KHC USDA Kentucky Mortgage

 

WHAT CREDIT SCORE DO YOU NEED FOR A KENTUCKY MORTGAGE LOAN

You Are More Than a Credit Score. However, you still need to understand what your score means.
Why do credit scores matter for Kentucky Mortgages?
Because they have a direct impact on your chances of qualifying when you apply for a mortgage, car loan or credit cards.  Your credit score is a numerical indication of the risk of you not repaying a loan. The lower your score, the higher that risk has been determined to be. A company called the Fair Isaac Corporation is responsible for these scores, also known as FICO scores. Credit scores are derived from reports kept by major credit agencies, including Experian, Equifax and TransUnion. These agencies track the amount of debt consumers have taken on and whether they pay their bills on time.
Credit scores range from 350-850. Consumers with scores below 600 may be charged higher loan rates, while those with scores above 700 are generally charged lower rates. Those with scores above 760 generally get the best rates.
How Lenders View Your Credit Score for a Kentucky Mortgage
There are 3 national credit programs at 3 different bureaus:
  • Fair, Isaac Model at Experian (formerly TRW)
  • BEACON at Equifax
  • EMPIRICA at Trans Union
Beacon and Empirica, both subscribe to the Fair Isaac’s FICO model of scoring and then they integrate their own version of a person’s FICO score.  On the other hand, when borrowers are looking for a mortgage loan, lenders pull what’s called a “tri-merge.”   A tri-merge merges and verifies all information detailed from all 3 unions into one report.
The main determinants of a credit grade are based on your credit and debt ratio. Beacon scores range from 400 – 844; while, FICO scores range from 350 – 880. Conversely, lenders determine the investment quality of a loan, with the equivalent of a grade, A, B, C or D. y ‘A” paper represents the highest quality loan, and D paper is the highest risk loan for the investor.
For example, if your credit score is 680 or more, you fall in the ‘A’ paper category; however, not all lenders rate credit the same way. So the question is: how does your credit affect the interest rate a lender will charge you? The answer depends on the level of the consistency of good payment in your credit history, along with your debt ratio. If both are great, the loan is assigned “A” grade; and, qualifies for the best interest rate. If even one of the factors is not up to par, the quality of the loan is downgraded to ‘A-” or ‘B’ paper. Consequently, the interest rate goes up as the perceived risk factor increases. There is a higher risk for a lender making a B, C or D paper loan because there is a higher risk for a defaulted loan. Therefore, the lender is compensated for the higher risk by charging the borrower a higher interest rate.
When lenders review one’s credit score, an underwriter reviews it. The underwriter and credit scores are assessed and rated by the following criteria:
Lifestyle History
  • How long you’ve lived at your residence
  • Do you own or rent (Owning property – earns extra credit)
  • How long you’ve been employed at your current job
  • How much money earned and how credit has been used
Payment history
  • Public record and collection items
  • Severity, recent and frequency of delinquencies noted in trade line section
Outstanding debt
  • Credit history
  • Number of balances recently reported
  • Average balance across all trade lines
  • Relationship between total balances and total credit limits on revolving trade lines
Pursuit of new credit
  • Number of inquiries and new account openings in the last year
  • Amount of time since most recent inquiry
Types of credit in use
  • Number of trade lines reported for each type
  • Bankcard
  • Department store cards
  • Personal finance company references
  • Travel and entertainment cards
  • Installment loans
Quick Improve Your Credit Scoring Tips
  • Obtain Your Credit FICO Score
  • Make any credit corrections with the proper documentation
  • Pay off small balances on high limit credit cards
  • Cancel certain credit cards and consolidate all the balances into a lower interest home equity loan or refinace your home loan with a cash out option.
All Current FHA, VA, KHC, USDA , Fannie Mae Programs for a mortgage in Kentucky with our company require a FICO Score of 640-We take your middle score.

Louisville Kentucky Mortgage Loans

 

What Credit Score do You Need to Buy a Home?

When it comes to mortgages and credit scores, there are two really important questions to ask:

–What credit score do I need to qualify for a mortgage?

–What credit score do I need to get the lowest interest rate on a mortgage?

These different but related questions are important if you are looking to buy a home. And the second question is particularly important. With a high FICO score, you can literally save tens of thousands of dollars in interest over the life of a home loan. So let’s take a look at both questions. And if you don’t know you score, be sure to get you free credit score.

What credit score do you need to qualify for a mortgage?

The first thing to keep in mind is that qualifying for a mortgage involves a lot more than…

View original post 929 more words

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Louisville Mortgage Underwriting Guidelines


Louisville Mortgage Underwriting Guidelines

Understanding Louisville Mortgage mortgage underwriting guidelines will help you understand your loan options when purchasing or refinacing a home. Now that you have found your dream house, you are going to need to apply for a Louisville Mortgage mortgage loan. Your realtor will either recommend a banking institution or you may already have one in mind. You will be dealing with a loan officer who will be compiling all the data on you to see if you qualify for a loan to pay for this house. All lending institutions have different Underwriting Guildelines set in place when reviewing a borrower’s financial history to determine the likelihood of receiving on-time payments. The primary items reviewed are:

Income

Income is one of the most important variables a lender will examine because it is used to repay the loan. Income is reviewed for the type of work, length of employment, educational training required, and opportunity for advancement. An underwriter will look at the source of income and the likelihood of its continuance to arrive at a gross monthly figure.

Salary and Hourly Wages – Calculated on a gross monthly basis, prior to income tax deductions.

Part-time and Second Job Income – Not usually considered unless it is in place for 12 to 24 straight months. Lenders view part-time income as a strong compensating factor.

Commission, Bonus and Overtime Income – Can only be used if received for two previous years. Further, an employer must verify that it is likely to continue. A 24-month average figure is used.

Retirement and Social Security Income – Must continue for at least three years into the future to be considered. If it is tax free, it can be grossed up to an equivalent gross monthly figure. Multiply the net amount by 1.20%.

Alimony and Child Support Income – Must be received for the 12 previous months and continue for the next 36 months. Lenders will require a divorce decree and a court printout to verify on-time payments.

Notes Receivable, Interest, Dividend and Trust Income – Proof of receiving funds for 12 previous months is required. Documentation showing income due for 3 more years is also necessary.Rental Income – Cannot come from a Primary Residence roommate. The only acceptable source is from an investment property. A lender will use 75% of the monthly rent and subtract ownership expenses. The Schedule E of a tax return is used to verify the figures. If a home rented recently, a copy of a current month-to-month lease is acceptable.

Automobile Allowance and Expense Account Reimbursements – Verified with 2 years tax returns and reduced by actual expenses listed on the income tax return Schedule C.

Education Expense Reimbursements – Not considered income. Only viewed as slight compensating factor.

Self Employment Income – Lenders are very careful in reviewing self-employed borrowers. Two years minimum ownership is necessary because two years is considered a representative sample. Lenders use a 2-year average monthly income figure from the Adjusted Gross Income on the tax returns. A lender may also add back additional income for depreciation and one-time capital expenses. Self-employed borrowers often have difficulty qualifying for a mortgage due to large expense write offs. A good solution to this challenge used to be the No Income Verification Loan, but there are very few of these available any more given the tightened lending standards in the current economy. NIV loan programs can be studied in the Mortgage Program section of the library.

Debt

An applicant’s liabilities are reviewed for cash flow. Lenders need to make sure there is enough income for the proposed mortgage payment, after other revolving and installment debts are paid.

  • All loans, leases, and credit cards are factored into the debt calculation. Utilities, insurance, food, clothing, schooling, etc. are not.
  • If a loan has less than 10 months remaining, a lender will usually disregard it.
  • The minimum monthly payment listed on a credit card bill is the figure used, not the payment made.
  • An applicant who co-borrowed for a friend or relative is accountable for the payment. If the applicant can show 12 months of on-time cancelled checks from the co-borrowee, the debt will not count.
  • Loans can be paid off to qualify for a mortgage, but credit cards sometimes cannot (varies by lender). The reasoning is that if the credit card is paid off, the credit line still exists and the borrower can run up debt after the loan is closed.
  • A borrower with fewer liabilities is thought to demonstrate superior cash management skills.

Credit History

Most lenders require a residential merged credit report (RMCR) from the 3 main credit bureaus: Trans Union, Equifax, and Experian. They will order one report which is a blending of all three credit bureaus and is easier to read than the individual reports. This “blended” credit report also searches public records for liens, judgments, bankruptcies and foreclosures. See our credit report index.

Credit report in hand, an underwriter studies the applicant’s credit to determine the likelihood of receiving an on-time mortgage payment. Many studies have shown that past performance is a reflection of future expectations. Hence, most lenders now use a national credit scoring system, typically the FICO score, to evaluate credit risk. If you’re worried about credit scoring see our articles on it.

The mortgage lending process, once very forgiving, has tightened lending standards considerably. A person with excellent credit, good stability, and sufficient documentable income to make the payments comfortably will usually qualify for an “A” paper loan. “A Paper”, or conforming loans, make up the majority of loans in the U.S. and are loans that must conform to the guidelines set by Fannie Mae or Freddie Mac in order to be saleable by the lender. Such loans must meet established and strict requirements regarding maximum loan amount, downpayment amount, borrower income and credit requirements and suitable properties. Loans that do not meet the credit and/or income requirements of conforming “A-paper” loans are known as non-conforming loans and are often referred to as “B”, “C” and “D” paper loans depending on the borrower’s credit history and financial capacity.

Here are some rules of thumb most lenders follow:

  • 12 plus months positive credit will usually equal an A paperloan program, depending on the overall credit. FHA loans usually follow this guideline more often than conventional loans.
  • Unpaidcollections, judgments and charge offs must be paid prior to closing an A paper loan. The only exception is if the debt was due to the death of a primary wage earner, or the bill was a medical expense.
  • If a borrower has negotiated an acceptable payment plan, and has made on time payments for 6 to 12 months, a lender may not require a debt to be paid off prior to closing.
  • Credit items usually are reported for 7 years. Bankruptcies expire after 10 years.
  • Foreclosure – 5 years from the completion date. From the fifth to seventh year following the foreclosure completion date, the purchase of a principal residence is permitted with a minimum 10% down and 680 FICO score. The purchase of a second or investment property is not permitted for 7 years. Limited cash out refinances are permitted for all occupancy types.
  • Pre-foreclosure (Short Sale) – 2 years from the completion date (no exceptions or extenuating circumstances).
  • Deed-in-Lieu of Foreclosure – 4 year period from the date the deed-in-lieu is executed. From the fifth to the seventh year following the execution date the borrower may purchase a property secured by a principal residence, second home or investment property with the greater of 10 percent minimum down payment or the minimum down payment required for the transaction. Limited cash out and cash out refinance transactions secured by a principal residence, second home or investment property are permitted pursuant to the eligibility requirements in effect at that time.
  • Chapter 7 Bankruptcy – A borrower is eligible for an A paper loan program 4 years after discharge or dismissal, provided they have reestablished credit and have maintained perfect credit after the bankruptcy.
  • Chapter 13 Bankruptcy – 2 years from the discharge date or 4 years from the dismissal date.
  • Multiple Bankruptcies– 5 years from the most recent dismissal or discharge date for borrowers with more than one filing in the past 7 years.
  • The good credit of a co-borrowerdoes not offset the bad credit of a borrower.
  • Credit scores usually range from 400 to 800. Changes to lending standards are occurring on a daily basis as a result of tightening lending standards, and can vary from lender-to-lender– so this information should be considered simply a guideline. For conforming loans, most lenders will lend down to a FICO of 620, with additional rate hits for the lower-end credit scores and loan-to-values. When you are borrowing more than 80%, they typically will not lend if you have a FICO below 680. The FHA/VA program just changed their minimum required FICO to 620, unless you are qualifying a borrower with non-traditional credit. The few non-conforming loan programs that are still available typically require 30% down payment with a minimum FICO of 700 for self-employed and 650 for W-2 employees, and the loan-to-value will change with the loan amount.
  • A credit score below 600 may require an Alternative Credit mortgage program.
  • Misinformation on a credit report can be repaired! For more information see our credit repairsection.
  • The FTC states, “Credit repair companies take your money and vanish.” Anything a credit repair company does for a fee, a consumer can do for free. Be wary of these guys!
  • If a borrower falls behind on a payment, the creditor should be contacted as quickly as possible. Most creditors will work with a borrower who makes an initial good faith effort to communicate with them.

Savings

Lenders evaluate savings for three reasons.

  1. The more money a borrower has after closing, the greater the probability of on-time payments.
  2. Most loan programs require a minimum borrower contribution.
  3. Lenders want to know that people have invested their own into the house, making it less likely that they will walk away from their life’s savings. They analyze savings documents to insure the applicant did not borrow the funds or receive a gift.

Lenders look at the following types of accounts and assets for down payment funds:

Checking and Savings – 90 days seasoning in a bank account is required for these funds.Gifts and Grants – After a borrower’s minimum contribution, a gifts or grant is permitted.

Sale of Assets – Personal property can be sold for the required contribution. The property should be appraised and a bill of sale is required. Also, a copy of the received check and a deposit slip are needed.

Secured Loans – A loan secured by property is also an acceptable source of closing funds.

IRA, 401K, Keogh & SEP – Any amount that can be accessed is an acceptable source of funds.

Sweat Equity and Cash On Hand – Generally not acceptable. FHA programsallow it in special circumstances.

Sale Of Previous Home – Must close prior to new home for the funds to be used. A lender will ask for a listing contract, sales contract, or HUD 1 closing statement.

Debt vs Income Ratio

The percentage of one’s debt to income is one of the most important factors when underwriting a loan. Lenders have determined that a house payment should not exceed approximately 30% of Gross Monthly Income. Gross Monthly Income is income before taxes are taken out. Furthermore, a house payment plus minimum monthly revolving and installment debt should be less than 40% of Gross Monthly Income (this figure varies from 35%-41% contingent on the source of financing).

Example

An applicant has $4,500 gross monthly income. The maximum mortgage payment is:

$4500 X .30 = $1350

Their total debts come to:

$500 Car
$20 Visa
$30 Sears
$75 Master Card
—————-
$625 per month.

Remember, their total debts (mortgage plus other debts) must be less than or equal to 40% of their gross monthly income.

$2,800 X .40 = $1800

$1800 is the maximum debt the borrower can have, debts and mortgage payments combined. Can the borrower keep all their debts and have the maximum mortgage payment allowed? NO!

In this case, the borrower, since they have high debts, must adjust the maximum mortgage payment downward, because:

$625 debts
$1350 mortgage
————–
$1975 – which is more than the $1800 (40% of gross debt) we calculated above.

The maximum mortgage payment is therefore:

$1800 – $625 (monthly debt) = $1175.

Apply today -It’s free and takes only 10 minutes.
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Louisville Ky First Time Home Buyer

Louisville Ky First Time Home Buyer


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Louisville Ky First Time Home Buyer Loan

Many home loan programs have been specifically created for first time home buyers. These loans feature low down paymentsand approval guidelines that make it easier to qualify. Some of the more popular first time homebuyer programs are listed below. .

Louisville KY First Time Buyers Loans

What is a First Time Buyer Loan?

Kentucky FHA and VA Loans for First Time Buyers

Who is Eligible for a Kentucky First Time Buyer Loan?

Louisville Ky Community Home Buyer Programs

What is Escrow?

Mortgage Credit Certificates from KHC

What is a First Time Buyer Loan?

Many people dream of owning a home but the home loan process can be confusing for many first time home buyers. Mortgage lenders offer first time buyers with many home loan options and assist the buyer in finding the best home loan for them. First time home buyer programs can offer lower interest rates, low down payments, or reduced taxes.

FHA and VA Loans for First Time Buyers Apply Online

First time homebuyers often experience the most difficulty amounting a significant down payment and everyone should have the opportunity to buy a home. For this reason the Federal government has developed two loan programs to assist homebuyers that have a little or no down payment. These programs are called the Kentucky Federal Housing Administration (FHA) and the Kentucky Veteran’s Administration (VA). These programs are not solely intended for first time home buyers; your home loan advisor will be able to determine if you qualify and if so which program is acceptable for your needs. Kentucky FHA and VA loans can be especially advantageous when combined with a HFA or MCC first time homebuyer program.

AWho is Eligible for a First Time Buyer Loan?
Kentucky First time home buyer programs are designed to help borrowers who may not have enough money to pay the full cost of the down payment or the closing costs on a mortgage. These programs make obtaining a mortgage more cost effective. There are even programs specifically for residents of each state. First time home buyer programs are available to those who have not owned a home for the past three years.

Community Home Buyer Programs
Kentucky  Community homebuyer programs reduce the down payment the borrower must pay to 3%, which must be the borrower’s own funds. The closing costs can be gift funds, a grant, or seller assistance up to 3% of sale price. This type of home loan requires the home buyer to take a class on home ownership in their state. Upon completion of the class, the homebuyer will receive a certificate that reduces the cash requirement and expands the qualification ratios. Community homebuyer programs have been making it possible for many people to have the opportunity to buy a home.

What is Escrow?

Escrow is a deposit of funds, a deed or other instrument by one party for the delivery to another party upon completion of an event. In simpler terms, escrow is where the transaction changes hands and prevents the seller from not receiving the money from the sale and prevents the buyer from not receiving the home that was purchased. Escrow is important to both buyers and sellers during the mortgage process.

Mortgage Credit Certificates
A Mortgage Credit Certificate or MCC from KHC -Kentucky Housing Corp is a certificate awarded by your local government agency authorizing the home loan borrower to take certain federal income tax credits. The credits awarded help to free up funds and make the monthly home loan payments more affordable for the homeowner. First time home buyers are typically the candidates eligible for an MCC but in special cases that you may discuss with your home loan advisor this requirement may be waived. Income and purchase price requirements also vary state to state and should be covered in conversations with your home loan representative.

Louisville Ky First Time Buyers Program
First time buyer programs in Louisville can make securing a Louisville home loan easier and more affordable. Contact us at 502-905-3708 for your Louisville Ky  mortgage to begin your first time buyer loan.

Interest Rates

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KHC Mortgage Interest Rates as of 11/09/2011, 10:00 a.m. ET

Rates subject to change without notice.

Secondary Market Interest Rates

Loan Type

Rate without DAP*

Rate with DAP

FHA only

3.875%

4.250%

RHS only

3.875%

4.250%

VA only

3.875%

4.250%

* DAP – Down Payment Assistance Program, including Regular DAP and HOME DAP

 

MRB Interest Rates

  • NEW – EFFECTIVE WITH RESERVATIONS BEGINNING ON 11/7/2011
  • For all approved KHC lenders
  • 60-day reservation for new and existing properties

640+ Credit Score Mortgage Revenue Bond (MRB) Interest Rates

  • KHC-funded down payment assistance may be utilized with these rates

Loan Type

Rate without DAP

Rate with DAP

*Government Rates only

4.250%

4.375%

* Government includes FHA, RHS, and VA.

 

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Refinance your Kentucky Mortgage Loan


If you are a homeowner who was lucky enough to buy when Kentucky mortgage rates were low, you may have no interest in refinancing your present loan. Perhaps you bought your home when rates were higher. Or perhaps you have an adjustable rate loan and would like to obtain different terms.

Should could you refinance your  Kentucky Mortgage Loan? This page will answer some questions that may help you decide. If you do refinance, the process will remind you of what you went through in obtaining the original mortgage. That’s because, in reality, refinancing a mortgage is simply taking out a new mortgage. You will encounter many of the same procedures and the same types of costs the second time around.

Would Refinancing your Kentucky Mortgage loan Be Worth It?

Refinancing can be worth while, but it does not make good financial sense for everyone. A general rule is that refinancing becomes worth your while if the current interest rate on your mortgage is at least two percentage points higher than the prevailing market rate. This figure is generally accepted as the safe margin when balancing the costs of refinancing a mortgage against the savings.

There are other considerations, too. Such as how long you plan to stay in the house. Most sources say it takes at least three years to realize fully the savings from a lower interest rate, given the costs of the refinancing. (Depending on your loan amount and the particular circumstances, however, you might choose to refinance a loan that is only 1.0 percentage points higher then the current rate. You may even find you could recoup the refinancing costs in a shorter time.)

Refinancing can be a good idea for homeowners who:

  • Want to take advantage of lower rates. This is a good idea only if you intend to stay in the house long enough to make the additional fees worthwhile.
  • Have an adjustable rate mortgage (ARM) and want a fixed-rate loan, to have the certainty of knowing exactly what the mortgage payment will be for the life of the loan.
  • Want to convert to an ARM with a lower interest rate or more protective features (such as a better rate and payment caps) than the ARM they currently have.
  • Want to build up equity more quickly by converting to a loan with a shorter term.
  • Want to draw on the equity built up in their house to get cash for a major purchase or for their children’s education.

If you decide that refinancing is not worth the costs, ask your lender whether you may be able to obtain all or some of the new terms you want by agreeing to a modification of your existing loan.

Should You Refinance Your  ARM?

In deciding whether to refinance an ARM you should consider these questions:

  • Is the next interest rate adjustment on your existing loan likely to increase your monthly payments substantially? Will the new interest rate be two or three percentage points higher than the prevailing rates being offered for either fixed-rate loans or other ARMs?
  • If the current mortgage sets a cap on your monthly payments, are those payments large enough to pay off your loan by the end of the original term? Will refinancing a new ARM or a fixed-rate enable you to pay your loan in full by the end of the term?

What Are The Costs of Refinancing?

The fees described below are the charges that you’ll most likely encounter in refinancing.

  • Title Search and Title Insurance
    This charge will cover the cost of examining the public record to confirm ownership of the property. It also covers the cost of a policy, usually issued by a title insurance company, that insures the policy holder in a specific amount for any loss caused by discrepancies in the title to the property. Be sure to ask the company carrying the present policy if it can re-issue your policy at a re-issue rate. You could save up to 70 percent of what it would cost you for a new policy.
  • Lender’s Attorney’s Review Fees
    The lender will usually charge you for fees paid to the lawyer or company that conducts the closing for the lender. Settlements are conducted by lending institutions, title insurance companies, escrow companies, real estate brokers, and attorneys for the buyer and seller. In most situations, the person conducting the settlement is providing a service to the lender. You may want to retain your own attorney to represent you at all stages of the transaction, including settlement.
  • Loan Origination Fees and Discount Points
    The origination fee is charged for the lender’s work in evaluating and preparing your mortgage loan. Discount points are prepaid finance charges imposed by the lender at closing to increase the lender’s yield beyond the stated interest rate on the mortgage note. One point equals one percent of the loan amount. For example, one point on a $100,000 loan would be $1,000. In some cases, the points you pay can be financed by adding them to the loan amount. The total number of points a lender charges will depend on market conditions and the interest rate to be charged.
  • Appraisal Fee
    This fee pays for an appraisal which is a supportable and defensible estimate or opinion of the value of the property.
  • Prepayment Penalty
    A prepayment penalty on your present mortgage could be the greatest determent to refinancing. The practice of charging money for an early pay-off of the existing mortgage loan varies be state, type of lender, and type of loan. Prepayment penalties are forbidden on various loans including loans from federally chartered credit unions, FHA and VA loans, and some other home-purchase loans. The mortgage documents for your existing loan will state if there is a penalty for prepayment. In some loans, you may be charged interest for the full month in which your prepay your loan.
  • Miscellaneous
    Depending on the type of loan you have and other factors, another major expense you might face is the fee for a VA loan guarantee, FHA mortgage insurance, or private mortgage insurance. There are a few other closing costs in addition to these.

In conclusion, a homeowner should plan on paying an average of 3 to 6 percent of the outstanding principal in refinancing costs, plus any prepayment penalties and costs of paying off any second mortgage that may exist. One way of saving on some of these costs is to check first with the lender who holds your current mortgage. The lender may be willing to waive some of them, especially if the work relating to the mortgage closing is still current. This could include the fees for the title search, surveys, inspections, and so on.

The information contained in this page is intended to help you ask the right questions when considering refinancing your loan. It is not a replacement for professional advice. Talk with mortgage lenders, real estate agents, attorneys, and other advisors about lending practices, mortgage instruments, and your own interests before you commit to any specific loan.

Refinancing Savings On A $100,000 Loan
Your Present Mortgage Rate Current Monthly Payment Monthly Payment Monthly Savings Annual Savings
@ 6.0%
@ 6.0%
@ 6.0%
10 $878 $600 $144 $1,728
9.5 $841 $600 $107 $1,284
9 $805 $600 $71 $852
8.5 $769 $600
8 $734 $600
7.5 $700 $600
7 $665 $600
6.5 $632 $600
6 $600 $600

NMLS# 57916

Call today for your Kentucky Mortgage Refinance Mortgage -502-905-3708
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Frequently Asked Questions about FHA Kentucky Home Loans


Frequently Asked Questions about FHA Kentucky Home Loans

FAQ’s about Kentucky  FHA Home Loans

Q. Can only a first time home buyer use the Kentucky FHA loan program?
A. No. You can use  FHA home loans as many times as you desire when buying a home or doing a Kentucky  mortgage refinance. The onlyKentucky  FHA loan requirements is that you cannot have more than one outstanding FHA Kentucky  mortgage loan with a loan to value of higher than 75%. You can own rental property and purchase your primary residence using FHA mortgage financing.

Q. Can FHASecure refinance Kentucky FHA loans help me save my house from foreclosure?
A. Yes. The newly released FHA Secure loan program is designed to help people with subprime loans that have adjusted after June 2005 who currently have mortgage late payments or facing foreclosure can refinance using the FHA home loan program, FHASecure.

Q. Does FHA use a FICO credit score for loan qualifying in Kentucky ?
A. No. FHA is one of the only types of real estate mortgage loans that currently does not require a FICO credit score to obtain a loan but those who do have a score should have a credit score of 580 or higher. FHA requires the last two years of credit history to determine your FHA loan qualification.

Q. Can I streamline refinance my Kentucky FHA loan at any time?
A. Yes, you can do a FHA streamline refinance assuming that the you are lowering your monthly payments or converting the loan to a fixed rate mortgage.

Q. Can I buy a 4 Unit Home with FHA loan financing?
A. Yes, you may use a FHA mortgage for buying a  2,3, or 4 unit home assuming that the  Kentucky  FHA mortgage amount does not exceed the maximum FHA loan limits for where the property is located.

Q. Can I buy a home with no down payment and get 100% financing using a Kentucky FHA loan?
A. Yes. Using a FHA insured real estate first mortgage in combination with other specialized no down payment and first time home buyer loan programs, such as , you may be able to buy a home with no money down.

Q. How long after a bankruptcy can I use a FHA loans for buying a home or mortgage refinance in
Kentucky
?
A. You may buy a home or do a refinance mortgage using FHA loans two years after the date of discharge for a bankruptcy, assuming that you have maintained perfect credit since the discharge of the bankruptcy with a FHA streamline refinance loan.

Q. How long after a Foreclosure can I use a Kentucky  FHA mortgage loan for buying a home or aKentucky FHA  refinance mortgage?
A. FHA loans may be used for buying a home or Kentucky FHA mortgage refinance three years after the final date of foreclosure assuming that your credit since the foreclosure has been perfect.

                                                                                                                     

Are There Limits for VA Loans in Kentucky?


via Are There Limits for VA Loans in Kentucky?

 

Kentucky VA Loan Limits by County

  • Adair$510,400
  • Allen$510,400
  • Anderson$510,400
  • Ballard$510,400
  • Barren$510,400
  • Bath$510,400
  • Bell$510,400
  • Boone$510,400
  • Bourbon$510,400
  • Boyd$510,400
  • Boyle$510,400
  • Bracken$510,400
  • Breathitt$510,400
  • Breckinridge$510,400
  • Bullitt$510,400
  • Butler$510,400
  • Caldwell$510,400
  • Calloway$510,400
  • Campbell$510,400
  • Carlisle$510,400
  • Carroll$510,400
  • Carter$510,400
  • Casey$510,400
  • Christian$510,400
  • Clark$510,400
  • Clay$510,400
  • Clinton$510,400
  • Crittenden$510,400
  • Cumberland$510,400
  • Daviess$510,400
  • Edmonson$510,400
  • Elliott$510,400
  • Estill$510,400
  • Fayette$510,400
  • Fleming$510,400
  • Floyd$510,400
  • Franklin$510,400
  • Fulton$510,400
  • Gallatin$510,400
  • Garrard$510,400
  • Grant$510,400
  • Graves$510,400
  • Grayson$510,400
  • Green$510,400
  • Greenup$510,400
  • Hancock$510,400
  • Hardin$510,400
  • Harlan$510,400
  • Harrison$510,400
  • Hart$510,400
  • Henderson$510,400
  • Henry$510,400
  • Hickman$510,400
  • Hopkins$510,400
  • Jackson$510,400
  • Jefferson$510,400
  • Jessamine$510,400
  • Johnson$510,400
  • Kenton$510,400
  • Knott$510,400
  • Knox$510,400
  • Larue$510,400
  • Laurel$510,400
  • Lawrence$510,400
  • Lee$510,400
  • Leslie$510,400
  • Letcher$510,400
  • Lewis$510,400
  • Lincoln$510,400
  • Livingston$510,400
  • Logan$510,400
  • Lyon$510,400
  • Madison$510,400
  • Magoffin$510,400
  • Marion$510,400
  • Marshall$510,400
  • Martin$510,400
  • Mason$510,400
  • Mccracken$510,400
  • Mccreary$510,400
  • Mclean$510,400
  • Meade$510,400
  • Menifee$510,400
  • Mercer$510,400
  • Metcalfe$510,400
  • Monroe$510,400
  • Montgomery$510,400
  • Morgan$510,400
  • Muhlenberg$510,400
  • Nelson$510,400
  • Nicholas$510,400
  • No County$510,400
  • Ohio$510,400
  • Oldham$510,400
  • Owen$510,400
  • Owsley$510,400
  • Pendleton$510,400
  • Perry$510,400
  • Pike$510,400
  • Powell$510,400
  • Pulaski$510,400
  • Robertson$510,400
  • Rockcastle$510,400
  • Rowan$510,400
  • Russell$510,400
  • Scott$510,400
  • Shelby$510,400
  • Simpson$510,400
  • Spencer$510,400
  • Taylor$510,400
  • Todd$510,400
  • Trigg$510,400
  • Trimble$510,400
  • Union$510,400
  • Warren$510,400
  • Washington$510,400
  • Wayne$510,400
  • Webster$510,400
  • Whitley$510,400
  • Wolfe$510,400
  • Woodford$510,400

How does Kentucky FHA Mortgage Rates work?


How does Kentucky FHA Mortgage Rates work?

 

 

via How does Kentucky FHA Mortgage Rates work?

Mortgage Loans After Bankruptcy Louisville Ky


via Mortgage Loans After Bankruptcy Louisville Ky

Louisville Kentucky FHA Streamline Requirements


Louisville Kentucky FHA Streamline Mortgage Refinance Program

Kentucky FHA Mortgage Loans Guidelines

Louisville Kentucky FHA Streamline Requirements

Kentucky FHA Streamline loans can help homeowners lower monthly mortgage payments and interest rates. But what do you need to qualify for an FHA Streamline loan? To begin, you need an existing FHA mortgage—if you don’t have an Kentucky FHA loan but want to refinance, your options include conventional refinancing or applying for an Kentucky FHA refinancing loan.

If you have a conventional loan you wish to refinance with an FHA refinancing loan, you’ll need to apply with the usual credit check, employment verification, debt-to-income ratio requirements and other considerations. An FHA Refinancing loan can get you many of the same results—if you refinance from a conventional loan to an FHA-insured refinancing loan you may get better rates and lower payments.

For those who do have an Kentucky FHA home loan, the other requirements for FHA Streamline include:

  • Being current on the existing loan with…

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Kentucky FHA loans have new guidelines for collections, judgements, and disputed accounts on credit report.


via Kentucky FHA loans have new guidelines for collections, judgements, and disputed accounts on credit report.

Kentucky FHA loans have new guidelines for collections, judgement, and disputed accounts on credit report

 

 

2020 Welcome Home Program for Kentucky Home Buyers.


via 2020 Welcome Home Program for Kentucky Home Buyers.

 

Kentucky Welcome Home Grant