Louisville Kentucky Mortgage Loan Officer originating FHA, VA, KHC, Rural Housing, USDA, Fannie Mae Mortgage Loans. Call or Text 502-905-3708 or Email me at Kentuckyloan@gmail.com NMLS#57916 Equal Housing Lender. Not Endorsed or Affiliated with any Government Lending Agency. I have over 18 years experience originating Kentucky Mortgage Loans. Put my experience and trust to work for you today. Free Pre-Approvals and Credit Report Same Day!
Credit Cards / New debt: Once you have applied for a mortgage, do not apply for new debt or credit cards, even if you do not plan to use them until after settlement. When you buy a home, you will undoubtedly buy items for that home; please wait until after you own the home!
Review your credit report: Be proactive in the process by thoroughly reviewing your credit report with me at the beginning of the process and report any inaccurate or missing information so that we can address it accordingly. What is missing on your report today could show up later and derail your closing.
Save everything: Save all of your bank statements, paystubs and credit card statements from time of application until closing. We may need them.
Do not pack your financial papers: Keep all tax returns, W-2’s, paystubs, 1099’s, K-1’s, bank statements etc… in an accessible place – not in POD somewhere in Timbuktu. You never know what you may have to provide at the last minute with the new guidelines. Be prepared!
Gift Funds and Large deposits: Based on the new rules, we will need a more detailed paper trail on gift funds and large deposits that are not consistent with your normal deposit pattern. If you are receiving a gift, we will need to verify that you have received it and that the donor has the ability to give those funds. Large deposits will have to be sourced; be prepared to show and explain where that money came from. If it was from a bonus, have the check ready. If you sold a car, have the bill of sale and a copy of the title transfer.
Changing Jobs: This one may seem obvious, but if you are planning to change jobs during the loan process, please inform me ASAP. If you are forced to change jobs, inform me immediately. You will sign a final application at settlement. When you sign it, you will be verifying the information that it contains. Do not commit mortgage fraud.
Do not move cash around: Lenders must verify all funds for closing and the source of those funds. When you move those assets around, it creates a paper trail nightmare. The best practice is to leave everything where it is. Once we have verified all accounts and given you the ”ok” , then you can commence shuffling funds.
Finally, when in doubt, contact me to ask. Do not take any chances with the approval of your loan. If additional verification is required, it will in most cases, delay your closing.
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.
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.
Where can you find the best brokers representing Kentucky borrowers? Look no further, We ares dedicated to helping Kentucky home owners find the best mortgage rates and loans!
No matter if you are looking to release the cash in your home equity, lower your monthly mortgage payments by refinancing your mortgage, or simply find the best current mortgage rates in Lexington, Louisville, or any other area of Kentucky; you have found the best resource! You can compare rates and get the best quotes with the lowest rates for free.
National Mortgage Rates 09/08/2010
Loan Type Today +/-
15 yr fixed 3.875
30 yr fixed 4.45
5/1 ARM 3.40
FHA Loans for FirstFHA Loans for First-time Home Buyers
FHA Loans for First-time Home Buyers
Getting an HUD Insured Home Loan with Low Down Payment
FHA loans are attractive for first-time home buyers with a less than perfect credit history and who find it difficult to come up with the 10 to 20% down payment.
FHA loans are once again gaining popularity due to a variety of reasons. Their market share dropped significantly during the period from 2000 to 2007 due to the surge in popularity of sub-prime loans and loans that allowed zero down payment. However the recent sub-prime crisis and the flurry of foreclosures led to most of the lenders tightening the mortgage requirements. FHA loans are once again becoming a viable option for low-to-middle income families for acquiring home loans. The recent bridge loan for the $8000 tax credit which is limited to FHA loans may well be another boost for the popularity of FHA loans.
How FHA Loans Work
The FHA loans are available to purchase or refinance a principal residence. Federal Housing Administration(FHA), which is a part of HUD do not fund a loan, instead they insure the loan. The mortgage loan is funded by a lending institution, such as a mortgage company, bank or savings and loan association.
Borrowers are required to pay a small upfront mortgage insurance premium(1.5% of the purchase price) and a small monthly mortgage insurance (MMI) premium.
Advantages of FHA Loans
1. Low Down Payment- The minimum down payment requirement for FHA loans is 3.5%. Combined with a HUD down payment assistance grant or other similar programs, the borrower can often purchase a home with zero down payment.
2. Less than perfect credit history- FHA loans are ideal for borrowers with less than perfect credit history who will find it difficult to qualify for a conventional loan. Since the loan is guaranteed by the government, lenders will
3. Ideal for first-time home buyers- The typical first-time home buyer is someone who is young and in the early stages of their career. They will have other student debts and will find it difficult to come up with the 5 to 20% down payment required for a conventional loan. They are also likely to have a blemished credit history. FHA loans are much more suited to this type of home buyers because they allow for higher debt-to-income ratios, less than perfect credit history and lower down payment.
4. Down payment can be gifted by a family member or non-profit organization- One significant advantage of FHA loans is that the down payment can be gifted by a parent, a government agency or a non-profit organization which will allow people with out money for down payment to buy a home.
5. Foreclosures and bankruptcy- While borrowers whose homes have been foreclosed or who have gone into bankruptcy will have to wait for a longer period to get a conventional loan, FHA will allow a home purchase two years after a Bankruptcy and three years after a foreclosure.
6. No prepayment penalties- FHA loans do not have any prepayment penalties and can be easily refinanced.
7. Higher debt-to-income ratios- The maximum allowable debt-to-income ratio for a FHA loan is 41%, which is higher than most conventional loans.
Limitations of FHA Loans
Relatively low limits- One important disadvantage of FHA loans is that loan limits for FHA loans is typically less than the loan limits for most conventional loans. If the loan amount exceeds the loan limits, the borrowers will have to contribute additional money or they will have to look for other types of loans.
Borrowers with good credit history can find better rates- FHA loans are typically for borrowers with a blemished credit history or who find it difficult to come up with the 10 to 20% down payment. Borrowers with a good credit history who can also come up with the 10 to 20% down payment can find better rates with conventional loans.
FHA loans are a great option for first-time home buyers who are looking to buy a home in this buyer’s market. Lenders are willing to give better rates even with tighter credit norms since they are assured that the loan will be paid off by HUD in the event of a foreclosure.
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