HomePath Renovation Mortgage allows a borrower to purchase a property that requires light to moderate renovation. The one loan amount includes both the funds for the purchase and renovation – up to 35% of the as completed value, no more than $35,000.
Benefits to You, the Borrower
Low down payment and flexible mortgage terms (fixed- rate or adjustable-rate).
Down payment (at least 3 percent) can be funded by the borrower’s own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer.
Renovation amount based on appraisal “as completed” value.
No mortgage insurance; ask your lender for cost details on loans without mortgage insurance.
Expanded seller contributions for closing costs allowed.
Available for primary residences, second homes, and investment properties.
Many condo project requirements are waived; ask your lender for details.
For more information about the renovation process, contact a HomePath Renovation Mortgage lender.
Note: Potential buyers should always use the lender and financing product that best meets the needs of the buyer and property, and should always consider requesting a home inspection of the property. *Ask your lender for cost details for loans with no mortgage insurance.
I wish it were that easy. There are 4 basic things that a borrower needs to show a lender in order to get approved for a mortgage in Kentucky. Each category has so many what ifs and sub plots that each box can read as it’s own novel. In other words, each category has so many variables that can affect what it takes to get approved, but without further adieu here are the four categories in no particular order as each without any of these items, you’re pretty much dead in the water:
You need income. You need to be able to afford the home. Without it, forget it! But what is acceptable income? Basically, it all depends on the type of loan that a borrower applies for. Jumbo, V.A., USDA, FHA, Conventional, Super Jumbo? Let’s just say that there are two ratios:
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 43% 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.
What qualifies as income? Basically, it’s income that has at least a proven, two year history of being received and pretty high assurances that the income is likely to continue for at least three years. What’s not acceptable?????? Cash income, short term income and income that’s not likely to continue.
For the most part this is fairly simple. Do you have enough assets to put the money forth to qualify for the downpayment that the particular program asks for. USDA says that there can be no money down. FHA, for now, has a 3.5% downpayment. Some loans require 20% down. These assets need to be validated through bank accounts and sometimes gifts. Can you borrower the down payment? Sometimes. Generally if you’re borrowing a secured loan against a secured asset you can use that. But rarely can cash be used as an asset. TALK TO YOUR LOAN OFFICER FIRST when discussing what’s acceptable?
Whewwwwwwwwwwwwwwwwwwwwwwwwwwww. This can be the bane to every borrower, every loan officer and every lender……and yes, to every realtor. How many times has a borrower said my credit’s good, only to find out that it’s not nearly as good as a borrower thinks or nearly as good as the borrower needs. Big stuff for sure. 620 is the bottom score (again with few exceptions) that lenders will permit. Below a 620, then you’re in a world of hurt. Even at 620, people consider you a higher risk that other folks and are going to penalize you or your borrower with a more expensive loan. 700 is when you really start to get in the “as a lender we love you” credit score. 720 is even better. Watch your credit!!!!! Check out my post:
In many ways this is the easiest box. Why????? Generally, there’s nothing you can do to affect this. Bottom line here is…..”is the value of the house at least the value of what you’re paying for it?” If not, then not good things start to happen. Generally you’ll find less issues with values on purchase transactions, because, in theory, the realtor has done an accurate job of valuing the house prior to taking the listing. The big issue comes in refinancing. In purchase transactions, the value is determined as the
Lower of the value or the contract price!!!
That means that if you buy a $1,000,000 home for $100,000, the value is established at $100,000. Conversely, if you buy a $200,000 home and the value comes in at $180,000 during the appraisal, then the value is established at $180,000. Big issues….Talk to your loan officer.
For each one of these boxes, there are over 1,000 things that can effect if a borrower has reached the threshold to complete that box. Soooooooooooo…..talk to a great loan officer. There are so many loan officers that don’t know what they’re doing. But, conversely, there’s a lot of great ones as well. Your loan is so important! Get a great lender so that you know, for sure, that the loan you want, can be closed on!
A credit score is a number that helps lenders and others predict how likely you are to make your credit payments on time. Each score is based on the information then in your credit report.
Why Do Your Scores Matter?
Credit scores affect whether you can get credit and what you pay for credit cards, auto loans, mortgages and other kinds of credit. For most kinds of credit scores, higher scores mean you are more likely to be approved and pay a lower interest rate on new credit.
Want to rent an apartment? Without good scores, your apartment application may be turned down by the landlord. Your scores also may determine how big a deposit you will have to pay for telephone, electricity or natural gas service.
Lenders look at your scores all the time. They look at your scores when deciding, for example, whether to change your interest rate or credit limit on a credit card, or whether to send you an offer through the mail. Having good credit scores makes your financial dealings a lot easier and can save you money in lower interest rates. That’s why they are a vital part of your financial health.
Consider a couple who is looking to buy their first house.
Let’s say they want a thirty-year mortgage loan and their FICO credit scores are 720. They could qualify for a mortgage with a low 5.5 percent interest rate*. But if their scores are 580, they probably would pay 8.5 percent* or more — that’s at least 3 full percentage points more in interest. On a $100,000 mortgage loan, that 3 point difference will cost them $2,400 dollars a year, adding up to $72,000 dollars more over the loan’s 30-year lifetime. Your credit scores do matter.*Interest rates are subject to change. These rates were offered by lenders in 2005.
What is a Good Score?
When lenders talk about “your score,” they usually mean the FICO® score developed by Fair Isaac Corporation. It is today’s most commonly used scoring system. FICO scores range from 300-850, and most people score in the 600s and 700s (higher FICO scores are better). Lenders buy your FICO score from three national credit reporting agencies (also called credit bureaus): Equifax, Experian and TransUnion.
In the eyes of most lenders, FICO credit scores above 700 are very good and a sign of good financial health. FICO scores below 600 indicate high risk to lenders and could lead lenders to charge you much higher rates or turn down your credit application.
Not Just One Score
There are many types of credit scores. They are developed by independent companies, credit reporting agencies, and even some lenders. As a rule, the higher the score, the better.
Each credit reporting agency calculates your score and each score may be different because the credit history each agency has about you may be different. Lenders may make a credit card or auto loan decision based on a single agency’s score, although others such as mortgage lenders often will look at all three scores.
Your credit score changes when your information changes at that credit reporting agency. This is good news! It means you can improve a poor score over time by improving how you handle credit.
Many insurance companies use something similar when setting your insurance rates, called a “credit-based insurance score.” You may be able to improve your insurance score by improving how you handle credit, which in turn may lower your premium payments on auto or homeowners insurance.
Some credit scores offered to consumers are just estimates and are different from the credit risk scores lenders actually use, although they may appear similar. Consumer reporting agencies and other companies sometimes use an estimated score to illustrate a consumer’s general level of credit risk. How might you tell whether a score is estimated? Ask the company if the score is used by most lenders. If it isn’t, it is likely to be an estimated score.
Five Parts to Your FICO Credit Scores
As a rule, credit scores analyze the credit-related information on your credit report. How they do this varies. Since FICO scores are frequently used, here is how these scores assess what is on your credit report.
Your payment history – about 35% of a FICO score
Have you paid your credit accounts on time? Late payments, bankruptcies, and other negative items can hurt your credit score. But a solid record of on-time payments helps your score.
How much you owe – about 30% of a FICO score
FICO scores look at the amounts you owe on all your accounts, the number of accounts with balances, and how much of your available credit you are using. The more you owe compared to your credit limit, the lower your score will be.
Length of your credit history – about 15% of a FICO score
A longer credit history will increase your score. However, you can get a high score with a short credit history if the rest of your credit report shows responsible credit management.
New credit – about 10% of a FICO score
If you have recently applied for or opened new credit accounts, your credit score will weigh this fact against the rest of your credit history. FICO scores distinguish between a search for a single loan and a search for many new credit lines, in part by the length of time over which inquiries occur. If you need a loan, do your rate shopping within a focused period of time, such as 30 days, to avoid lowering your FICO score.
Other factors – about 10% of a FICO score
Several minor factors also can influence your score. For example, having a mix of credit types on your credit report – credit cards, installment loans such as a mortgage or auto loan, and personal lines of credit – is normal for people with longer credit histories and can add slightly to their scores.
What’s NOT In Your Scores
By law, credit scores may not consider your race, color, religion, national origin, sex and marital status, and whether you receive public assistance or exercise any consumer right under the federal Equal Credit Opportunity Act or the Fair Credit Reporting Act.
Learn Your Scores Soon
It’s now easy to get your credit scores to check your financial health. Different sources provide credit scores to consumers via the Internet, telephone or U.S. Mail. For most scores, you will need to pay a small amount. You also will be asked to prove your identity to make sure your financial information isn’t given to the wrong person.
Here are recommended places you can get your scores:
ANNUAL CREDIT REPORT SERVICE
Congress recently established this outlet to make it easier for consumers to get their credit reports and credit scores from the three national credit reporting agencies.Web:www.annualcreditreport.com Phone: 1 877 322 8228 U.S. Mail:
Annual Credit Report Request Service
P. O. Box 105281
Atlanta, GA 30348-5281
Credit Score is free when applying for mortgage or home equity loan.
This score will likely be the actual score used to evaluate your application. Ask your lender to be sure.
FICO score from Equifax, Experian or Trans Union 300-850
Meet Vera, A Single Mother
Behavior of action
Change in score
Vera’s current FICO score
Vera and husband Dave have been married for 10 years. They have one daughter April, age 4. Financially they are making payments on time for two car loans, one mortgage and four credit cards which have low balances. But sadly, their marriage has deteriorated and they agree to divorce. In the settlement Vera retains custody of April. Dave takes one of the cars and responsibility for its loan. He also takes two of their four credit cards, and agrees to pay 50 percent of the monthly mortgage payments.
Dave struggles financially following the divorce and runs up his two credit cards to nearly their limit. Vera doesn’t realize her name is still on the card accounts Dave is using.
Dave continues to struggle and misses payments on both cards. Both cards still are nearly maxed out.
Vera gets a call from her bank about the missed payments. Once she understands what has happened, she contacts Dave and asks him to roll over the balances on both cards to a new card that he opens in his name only, which he does. Paying off the two accounts improves her score.
Vera continues to manage her money carefully, paying her bills on time and keeping her two card balances low. Meanwhile the two missed payments get older on her credit file and have less impact to her score. Dave lands a better job and makes his part of the mortgage payments on time.
Vera’s car breaks down. Since she relies on it to get to work and to take April to preschool, she has no choice but to have it repaired. To pay the garage she maxes out one of her credit cards.
Since Vera needs a reliable car, she asks her bank about auto loan rates. They tell her that her credit score is too low to qualify her for their best rate. Since money is tight, she waits to buy a car.
Vera has steadily paid down her high credit card balance and monitored her score. When her score has improved, Vera applies and is approved for an excellent rate on an auto loan. She buys a used car and feels good about how she has managed her credit.
Now Meet Don and Doris
Behavior of action
Change in score
Don and Doris’s current FICO score
Don and Doris are married and in their 50s. They have twin sons who graduated from college a year ago, have good jobs and live in different states. Don and Doris have been managing their money carefully for 30 years. They are making payments on a mortgage, three credit cards with large balances, and a $50,000 bank loan that paid for their sons’ college. Now that their sons are on their own financially, Don and Doris focus on paying down their credit card balances by making larger monthly payments and using their cards sparingly.
After a year of steady payments, their credit card balances are significantly lower. They continue to manage their credit well and haven’t opened any new accounts.
The couple decides to go on an extended vacation, taking leaves of absence from the jobs to so they can tour the U.S. in a motor home. They buy their motor home with help from a new bank loan at a favorable rate, thanks to their good credit scores. But opening the new loan lowers their scores a bit. Since their plans will keep them on the road for three months, they put one of their sons in charge of paying their monthly bills.
They have a wonderful vacation. When they return, they find they had neglected to tell their son about the bank loan. He didn’t open the invoices they received from the bank thinking they were monthly account statements. Now their bank loan payment is 60 days late.
Doris calls the bank, explains the mix-up and sends in the overdue payments immediately. A couple of weeks later their bank conveys their new account information to the credit reporting agencies, where it is available to influence their credit scores.
After six more months of on-time payments, their credit scores have steadily improved. Although the late payment will remain on their credit reports for seven years, it will impact their scores less as time passes. Don and Doris are on track once again to regain their good FICO credit scores in the 700s.
* Don and Doris have separate FICO score, but in this example, they would rise and fall together.
When you get your credit scores, make sure you also learn the highest and lowest scores possible, as well as the most important factors that influenced your scores. These factors can give you an idea of how you can improve your scores.
Getting your own credit scores or credit reports won’t affect your scores, as long as you order them from one of the sources we list here.
Review your credit reports for accuracy. Mistakes and omissions on your credit reports probably will affect your credit scores. If you spot an error, contact the credit reporting agency and the creditor whose information is wrong.
If you have questions or problems with your credit scores, contact the company that provided them to you.
Boosting Your Scores
Your credit scores change when new information is reported by your creditors. So your scores will improve over time when you manage your credit responsibly.
Here are some general ways to improve your credit scores:
Pay your bills on time.Delinquent payments and collections can really hurt your score.
Keep balances low on credit cards.High debt levels can hurt your score.
Pay off debt rather than moving it between credit cards.The most effective way to improve your score in this area is to pay down your revolving credit.
Apply for and open new credit accounts only when you need them.
Check your credit report regularly for accuracyand contact the creditor and credit reporting agency to correct any errors.
If you have missed payments, get current and stay current. The longer you pay your bills on time, the better your score.
Improving your credit scores can help you:
Lower your interest rates
Speed up credit approvals
Reduce deposits required by utilities
Get approved for apartments
Get better credit card, auto loan and mortgage offers
This publication has been prepared by Consumer Federation of America and FICO, and was reviewed by the Federal Citizen Information Center. These materials may be reproduced for educational purposes only.
Website Fine Print
The content provided on this website is presented or compiled by Joel Lobb and is provided for informational purposes only. It does not necessarily represent the views or opinions of Key Financial Mortgage .Neither Joel Lobb nor Key Financial Mortgage assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information disclosed, or represents that its use would not infringe privately owned rights.
The mortgage or financial services or strategies mentioned in this website may not be not suitable for you.
Key Financial Mortgage is an Equal Opportunity Lender. All rights Reserved.
Joel Lobb is a Licensed Mortgage Originator: NMLS #57916. Key Financial Mortgage NMLS # 1800 is a licensed Mortgage Broker Company in the State of Kentucky
This web site is not the FHA, VA, USDA, HUD or any other government organization responsible for managing, insuring, regulating or issuing residential mortgage loans.
Under normal Fannie Mae underwriting standards, a borrower is considered self-employed if he or she owns more than 25% of a business from which income is derived. Any lower percentage ownership and a borrower can simply be considered employed by the firm (Yes, this is a help for co-owners of a small business – if you own less than 25% you don’t even have to read this article).
How do you calculate income for self-employed borrowers KentuckyMortgage? Self-employed borrowers who want to go the full documentation route must be able to provide the following:
Underwriters average the net income to the business owner over the past two years to obtain an estimate of total income.If a business owner suffered a difficult year in 2011, but in all years before and after income was significantly higher, then the averaging method of analyzing income would unfairly deny the borrower a standard loan.
Louisville FHA and Louisville VA home loans. Louisville FHA home loans can help Louisville borrowers obtain a Louisville mortgage more easily. Louisville VA home loans can help Louisville Veterans secure Louisville home loans to purchase their dream home. Contact for help with your Louisville FHA and VA home loans.
1 hour preapproval and 21 day closings– call toay for your free application an credit report
Key Financial Mortgage
107 South Hurstbourne Parkway
Louisville Ky 40222
Kentucky Housing Mortgage Rates—Kentucky
Louisville Kentucky Mortgage | August 18, 2010 at 8:05 pm
700+ Credit Score Mortgage Revenue Bond (MRB) Interest Rates
• KHC-funded down payment assistance not available with these rates
Loan TypeRegular Rate
*Government Rates only3.500%
620+ Credit Score Mortgage Revenue Bond (MRB) Interest Rates
• KHC-funded down payment assistance may be utilized with these rates
Loan TypeRegular Rate
*Government Rates only3.875%
* Government includes FHA, RHS, and VA.
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Senior Mortgage Loan Officer
Key Financial Mortgage
107 S. Hurtsbourne Parkway
Louisville Ky 40222
Down Payment Assistance Program | Louisville Kentucky
The Down Payment Assistance Program provides qualified homebuyers a loan to assist with purchasing a home which will be their primary residence.
Homebuyer households must have income no greater than 80% of median income, adjusted for family size.
All Homebuyers must complete HUD approved homeownership counseling before assistance can be committed. A Certificate of Completion from the counseling agency must be submitted with the application. Contact us at (502) 905-3708 for counseling.
Metro Louisville Government has revised its Down Payment Assistance Program increasing the amount of assistance.
We are now offering Metro Louisville Kentucky Wide assistance, and homebuyers may qualify for a forgivable mortgage which will be forgiven over a five (5) year period of 10% of the purchase price of the home to a maximum of $10,000.
Our Department has also allocated closing cost assistance in the amount of up to $2,000 for down payment assistance programs; however, homebuyers must pay all prepaid costs from their own funds.
Homebuyers are responsible for obtaining primary financing with a fixed rate mortgage from a reputable lender.
A Housing Quality Standards inspection will be conducted by a inspector before closing. All deficiencies must be corrected and verified by re-inspection prior to closing
A HUD-1 closing statement must be received two working days (48 hours) prior to closing.
Applications will be accepted at any time. Assistance is granted on a first come, first serve basis. For more information about the Down Payment Assistance Program, please call 502-905-3708
Down Payment Assistance Program | Louisville Kentucky