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!
The first step to qualifying for an FHA loan is to work with a loan officer at an FHA approved lender. General FHA guidelines that the loan officer will discuss with you include:
Documenting an employment history over the last two years. FHA guidelines consider the last two years of employment and look at a steady pay history or employment with the same employer.
Providing a valid social security number and proof that you’re a resident of the United States. There are exceptions for resident aliens, but these exceptions will vary by lender.
Producing the necessary down payment. FHA loans require a minimum down payment of 3.5% when buying a home — but the down payment may be a gift under certain conditions.
Performing the necessary due diligence. The property will need to be inspected by an FHA appraiser and an FHA approved appraisal must be done.
Assessing how much you can afford.Although there is some flexibility, the total monthly mortgage payment generally should not exceed 30-32% of your gross monthly income.
Assessing your level of debt. Your total debt should not be more than 43% of your gross monthly income. Again, there is some flexibility with this number, but this is a good guideline.
Note from mortgage professional, Albert Bui, “the 43% DTI to income is mainly a guideline max for many loans out on the market to comply with certain qualified mortgages (QM) guidelines however in reality the max on FHA I’ve seen is 46.99% on the front ratio (housing payment only) and 56.99% on the backend when factoring in all other obligations. So this means you can borrow up to 46.99% on the front ratio for your housing payment but it doesn’t mean the borrower should max it out, rather they “can.”
Knowing your credit score. Minimum credit scores now apply with FHA loans and can vary by lender. A credit score of 580 and above requires a 3.5% down payment, and a credit score of 500-579 requires a 10% down payment. Credit score requirements will vary by lender.
According to Mr. Bui, “a 3.5% down payment is the min however there are many down payment assistance (DPA) programs that will either grant you the 3.5% for free with no repayment’s, offer the borrower a 3.5% community 2nd loan that is silent (no payment) and may be forgivable after a certain period of time, or a 2nd that has a silent payment but is due at a certain period of time or payoff in the future. So you can bring in as little as $0.00 with qualifying income or additional requirements.”
Disclosing prior bankruptcies. If you have had a bankruptcy that has been discharged, the waiting period is 2 years.
Disclosing prior foreclosures. If you have had a foreclosure, the waiting period is 3 years, and you must have good credit
GOOD NEWS! In Circular 26-16-36, VA has announced loan limit changes for the year 2017. The base limit will be increased to $424,100 for 2017.This limit applies to the loan amount for VA loans with no down payment and with full entitlement.
These new loan limits will be effective for loans closing on or after January 1, 2017.
We will be accepting locks at the higher limits beginning December 12, 2016, but cannot close until January 1, 2017.
Funding is Available for your SFH Guaranteed Applications!
As we enter the last two months of Fiscal Year (FY) 2016, Rural Development is pleased to announce that USDA has more than $10 billion available to guarantee no-down payment loans for your rural customers through our Single Family Housing Guaranteed Program.
Today’s low interest rate environment, coupled with new program features such as the single-close construction loan and the streamlined-assist refinance option, makes this a great opportunity for rural Americans! Please visit our SFH Guarantee website or contact a Guaranteed Loan Specialist for more information!
Thank you for your support of the Single Family Housing Guaranteed Loan Program! We are proud to partner with you to serve the rural homebuyers of America.
Joel Lobb, FHA, VA, USDA, KHC, First Time Home Buyer Expert Louisville, Kentucky