Sunday, January 25, 2015

Kentucky FHA Mortgage Loans vs Kentucky USDA Rural Housing Loans Compared in 2015



 


Here are the important points about Kentucky USDA Rural Housing Loans:

  • USDA loan are only available in certain counties of Kentucky.
  • There are two types of USDA loans available: Direct and Guaranteed. 
  • 100% financing. No down payment 
  • USDA will go down to 580 score and uses and  automated underwriting pre-approval system called GUS-Guarantee Underwriting System. The GUS findings will dictate your loan pre-approval.
  • Income limits based on county and number of people in household.
  • Must be 3 years removed from bankruptcy and foreclosure
  • No purchase price limit
  • Upfront funding fee of 2% of loan amount paid to RD at closing 
  • Annual mi fee of .50% paid each month for life of loan. 
  • Takes on average 30-45 days to close. 
  • 30 year fixed rate is the only term available and rates are usually comparable to FHA and VA government mortgage insured rates.
  • Do not have to be a first time home buyer and can currently own another home if USDA deems the current living situation not suitable. 
  • Appraisal has to meet FHA minimum standards
  • You can buy a home with land on USDA Loans as long as the property does not have any agricultural characteristics or income producing capabilities. 
  • There is no set max acreage but the appraisal will dictate approval of property by USDA. 
  • You can only use USDA loans to purchase property or refinance an existing USDA loan



  • Here are some important facts about Kentucky FHA Loans:
  • FHA loans can be made in any county of Kentucky. 
  • FHA loans require 3.5% down payment
  • FHA Mortgage terms are available in 30, 20, 15, 10 year terms.
  • Credit score down to 500 are acceptable but subject to investor approval.
  • Most lenders will want a 620 score, with some going down to 580 with conditions
  • FHA loans are pre-approved using DU, an online automated underwriting system that will dictate your loan approval conditions. 
  • FHA has max income limits in Kentucky with the maximum being $271,050 for most Kentucky Counties
  • There are no income limits on the household for FHA loans
  • There is a upfront mi premium of 1.75% and a monthly fee of .85% payable each month. 
  • If you finance over 90% of the homes value, the monthly mi factor of .85% is for life of loan. If less than 90%, 11 year term for annual mi fee.
  • FHA, USDA rates are really comparable on paper, no big difference except for the mi
  • FHA requires 3 years out on a short-sale or foreclosure
  • FHA requires 2 years out on Chapter 7 and 1 year out on a Chapter 13 with good clean history for the last 12 months with no lates. 
  • Not required to be a first time home buyer
  • Can refinance an existing FHA loan to another without appraisal, income, a processed call FHA streamline refinance









Fill out my form!

Sunday, January 18, 2015

4 Things Every Borrower Needs to Get Approved for a Mortgage or Home Loan In Kentucky

4 Things Every Borrower Needs to Get Approved for a Mortgage or Home Loan In Kentucky




Kentucky FHA, VA, KHC, Conventional, Fannie Mae, Freddie Mac, USDA Mortgage Loans


4 Things Every Borrower Needs to know to Get Approved for a Loan!!!!


There are 4 basic things that a borrower needs to show a lender in order to get approved for a mortgage. 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:


1. Income

You need income. You need to be able to afford the home.  But what is acceptable income? Let’s just say that there are two ratios mortgage underwriters look at to qualify you for mortgage payment:

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.

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? Unverifiable cash income, short term income and income that’s not likely to continue like unemployment income, student loan aid,  VA education benefits,or short term disability are not allowed for a  mortgage loan.

2. Assets

What the mortgage underwriter is looking for here is how much can you put down and secondly, how much will you have in reserves after the loan is made to help offset any financial emergencies in the future.

Do you have enough assets to put the money forth to qualify for the down payment that the particular program asks for. The only 100% financing or no money down loans still available in Kentucky for  home buyers are available through USDA, VA, and KHC or Kentucky Housing Loans. Most other home buyers that don't qualify for the no money down home loans mentioned above, will turn to the FHA program. FHA loans currently requires a 3.5% down payment.

Kentucky Home buyers that have access to putting down at least 5% or more, will usually  turn to Fannie Mae or Freddie Mac mortgage programs  so they can get better pricing when it comes to mortgage insurance.

These assets need to be validated through bank accounts, 401k or retirements account and sometimes gifts from relatives or employer.. 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. FHA will allow for gifts from relatives  for down payments with little as 3.5% down but Fannie Mae will require a 20% down payment when a gift is being used for the down payment on the home.

The down payment scenarios listed above are for Kentucky Primary Residences only. There are stricter  down payment requirements for investment homes made in Kentucky.

 3.Credit

 640 is the bottom score (again with few exceptions) that lenders will permit. Below a 640, then you’re in a world of hurt. Even at 640, people consider you a higher risk that other folks and are going to penalize you or your borrower with a more expensive loan. 720 is when you really start to get in the “as a lender we love you” credit score. 740 is even better. Watch your credit scores carefully. You have three credit scores and the lender will take your middle score.

Kentucky  FHA Mortgage Loans currently requires 3 years removal from a foreclosure or short sale  and 2 years on a bankruptcy with good reestablished credit.

Kentucky Fannie Mae Mortgage Loans currently requires 4 years removal from a bankruptcy, and 7 years on a foreclosure.

Kentucky VA Mortgage Loans currently requires 2 years removal from a bankruptcy or foreclosure with good reestablished credit.

Kentucky USDA loans require 3 years removal from bankruptcy and foreclosure with good reestablished credit.



4. Appraisal

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!


I can answer your questions and usually get you pre-approved the same day.




Joel Lobb (NMLS#57916)
Senior  Loan Officer

American Mortgage Solutions, Inc.
 800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
((502) 905-3708 | 7 Fax: (502) 327-9119|
 Company ID #1364 MB73346
http://mylouisvillekentuckymortgage.com 




<!—- End of Lender411.com Calculator Widget -->

Friday, January 16, 2015

New Kentucky FHA Mortgage insurance Chart for 2015 with Changes effective Jan 26, 2015

New FHA MIP Chart for Kentucky FHA loans for refinances and purchase loans effective January 26,2015





Loan Purpose
Up-Front MI Premium
Endorsement Date of Current 
FHA-insured Mortgage
Purchase, Rate/Term Non-Streamline Refinance, Cash Out Refinance
1.75%
N/A
Streamline Refinance
1.75%
Endorsed on or after 06/01/2009
Streamline Refinance
0.01%
Endorsed prior to 06/01/2009

For Loan Terms > 15 years
Loan Purpose
Base Loan Amount
LTV
Case Number Assigned on or After01/26/2015
Case Number Assigned6/03/2013–01/25/2015
Purchase, Rate/Term, Cash-Out, or Streamline Refinance Endorsed on or after 06/01/2009
<=$625,500
<=95%
.80
1.30
<=$625,500
>95%
.85
1.35
> $625,500
<=95%
1.00
1.50
> $625,500
>95%
1.05
1.50
FHA Streamline endorsed prior to 06/01/2009
All Loan Amounts
All LTVs
0.55

For Loan Terms <=15 Years
Loan Purpose
Base Loan Amount
LTV
Case Number Assigned 
on and after 6/03/2013
Purchase, Rate/Term, Cash-Out, or Streamline Refinance Endorsed on or after 06/01/2009
<=$625,500
<=90%
0.45
<=$625,500
>90%
0.70
> $625,500
<=90%
0.70
> $625,500
>90%
0.95
FHA Streamline endorsed prior to 06/01/2009








The length of time on which you'll pay mortgage insurance premiums on your FHA loan is as follows:
Mortgage Term
Loan to Value Ratio
Length of Mortgage Premium
15 years or shorter
Up to 90%
11 years
15 years or shorter
Greater than 90%
Full loan term
Greater than 15 years
Up to 90%
11 years
Greater than 15 years
Greater than 90%
Full loan term
Source: HUD.gov.





Fill out my form!

Saturday, January 10, 2015

NEW LOWER FHA MORTGAGE INSURANCE FOR KENTUCKY HOME BUYERS AND HOMEOWNERS WHO HAVE A FHA MORTGAGE JANUARY 2015

HUD Lowers FHA MIP FOR KENTUCKY FHA MORTGAGE BUYERS 
EFFECTIVE JANUARY 26, 2015




 
U.S. Dept HUD released Mortgagee Letter 15-01 today, which outlines plans to reduce the annual MIP (i.e., monthly MI payment) for certain section 203(b) Kentucky FHA-insured loans with Kentucky  FHA case numbers obtained on or after January 26, 2015.  KENTUCKY FHA MORTGAGE INSURANCE CHANGES 2015 Further details, effective date and action plan are outlined below:  
Effective Date
The reduced annual MIP (i.e., monthly MIP) premiums announced in this ML are effective for eligible Kentucky FHA loans (see below) with a case number issued on or after January 26, 2015.
Streamline Refinances for Kentucky FHA Mortgage Loans
The annual MIP (i.e., monthly MI) rate will remain the same for Streamline Refinances which are refinancing existing Kentucky FHA loans that were endorsed on or before May 31, 2009.  

Purchase and other Refinance transactions for Kentucky FHA Mortgage loans
For other affected loans with case numbers issued on or after January 26, 2015, the annual MIP rate (i.e., monthly MI) will be as follows:





NOTE:  15 YR PREMIUMS ARE REMAINING THE SAME.

 
Up Front MIP (UFMIP)
UFMIP for all FHA transactions remains unchanged at this time.

MI duration

The duration of MI for FHA loans is also unchanged, remaining effective for life of loan for most transactions.

As an example, on a Kentucky FHA loan with a $150k loan amount, the new reduced mortgage insurance premiums  will save the existing FHA Mortgage holder or new Kentucky FHA homebuyer potentially $65 a month, $780 year, and $23,400 over a 30 year term. As you can see, this is a huge savings with the new changes.







Fill out my form!




--