Locking In Rates


 

Locking In Rates

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When is it appropriate to ‘lock in’ our interest rate?

 

May 17, 2004

Good question. And, as with the answer to so many things, it depends. Some say:

1. It is considered a fool’s game to try to time the bottom of the market.
2. If you can’t afford to lose, you can’t afford to gamble.
3. Interest rates can, and do, go up…as much as 3/4% or more in one week.

Although we certainly have not seen evidence of it lately, interest rates can rise and fall often and rapidly. The Wall Streetmoney market” is manipulated by so many factors, it is extremely difficult to predict. Everyone is guessing what might happen, but no one really knows. If you want to be safe, you lock in as soon as your lender will allow it.

Sometimes you need a tough hide to “float” and ride along with the market fluctuations. If you do this, you believe interest rates will fall during the period of your mortgage processing, and you must be prepared to take the consequences if they do not.

Before you decide which way to go, be sure you understand your lender’s rules. Some allow you to lock in at the time of application, generally without cost for 15 to 30 days; some only let you lock in after you are approved for the loan and, in a busy environment, this can take a few weeks. Some will let you lock in for extended periods of time for a fee, often payable upfront and nonrefundable. Some will allow you a “float down” option that provides you with a lower rate if rates go down, typically for a cost.

As you can tell by some of my comments, I would suggest you lock in your rate as soon as you can…then forget about it. You will sleep better. There are not many people who can stand the uncertainty of gambling with this big commitment.

Discuss the options with your loan officer, be sure you understand whether you are getting a “lock” with the lender making the loan and what period it covers. I have heard horror stories of “locks” made for short periods when everyone is so busy, and the timeline for closing is just about impossible. That’s a promise that is useless. Be sure you understand what kind of company you are dealing with, whether you have a true commitment on your rate and fee, one that really be trusted and accomplished.

Good luck.

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Bullitt County Kentucky USDA Home Loan and Rural Housing Loans for Bullitt County KY


Bullitt County USDA Loan Adjusted Maximum Income Limits by County
Updated 10/24/2012

County Name     1-4 Person Households
(Guaranteed Loans)
5-8 Person Households 
(Guaranteed Loans)
LOUISVILLE-JEFFERON COUNTY, KY-IN (MSA) BULLITT $74,750 $98,650
Bullitt Bullitt County Area
Bullitt County Overview
Bullitt County Map 1
Bullitt County Map 2
Bullitt County Map 3
Bullitt County Map 4
Bullitt County Map 5 
Bullitt County Map 6
Bullitt County Map 7
 

Overview Map of Bullitt Ineligible area

Fill out the Application on this page, or call one of our certified USDA loan agents at 502-905-3708 and find out if you’re eligible.

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.comKey Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

How much of a Mortgage Can I get apprvoed for a Kentucky Mortgage Loan FHA, VA, KHC, USDA, Fannie


Joel Lobb (NMLS#57916)
Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.com

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
http://mylouisvillekentuckymortgage.com

Louisville Kentucky Mortgage Loans

kentuckym mortgage, fha, jumbo, debt ratio, fha, va, khc, usda

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Joel Lobb (NMLS#57916)
Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.com

Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
http://mylouisvillekentuckymortgage.com

4 Things Needed to Get Approved for a Mortgage Loan In Kentucky


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:

Income

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:
  1. 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.
  2. 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.

Assets

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?

Credit

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:

Appraisal

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!
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

Credit Fico Score for a Kentucky Mortgage FHA VA KHC


Credit Fico Score for a Kentucky Mortgage FHA VA KHC.

As a rule of thumb, however, a credit score below 640 will make buying a home very difficult. A FICO score below 640 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 640, recognizing that other factors weigh in the decision and that some banks may require a higher score.

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