Monday, May 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 




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Thursday, May 14, 2015

What is minimum credit score for a FHA Loan in Kentucky?

What is minimum credit score for a FHA Loan in Kentucky?


The FHA is introducing new guidelines on loan to value ratios and the minimum credit score required for FHA borrowers in Kentucky. As detailed in a Mortgagee Letter from the Department of Housing and Urban Development (HUD), the following credit requirements will apply for FHA borrowers, effective October 4, 2010.

To be eligible for maximum financing, borrowers will need a minimum credit score of 580 or higher.

Kentucky FHA Borrowers with a credit score between 500 and 579 will be limited to a loan to value of 90%. A sub 580 FICO credit score borrower will henceforth need to make a 10% minimum down payment on a purchase transaction.

All Kentucky FHA borrowers with a credit score below 500 will not be eligible for FHA-insured mortgage financing in Kentucky.

HUD’s newly introduced minimum credit score and loan to value requirements will apply to all single family loan programs, except for Reverse Mortgages (Home Equity Conversion Mortgages) and Hope for Homeowners.


The new credit requirements are not expected to dramatically change the number of Kentucky  FHA mortgage approvals. Most lenders had already imposed a minimum credit score requirement of 640 or higher for Kentucky FHA borrowers. In limited cases, borrowers with scores between 620 and 639 could still obtain mortgage approval.

Many potential Kentucky FHA borrowers with scores below 640 who cannot obtain mortgage approval may be left wondering why this is the case if the FHA has established a minimum score of only 580. The explanation for this is that the FHA does not make mortgage loans but rather insures FHA loans made by lenders. Despite the FHA insurance, banks do not have an iron clad protection from loss.





free mortgage pre-approval on FHA loans in Kentucky!


Saturday, April 25, 2015

New Kentucky FHA Mortgage rules starting June 2015

New Kentucky FHA Mortgage rules starting June 2015



CAVIRS


Old Rule – Federal debt makes borrower ineligible

New Rule – VERIFIED federal debt makes the borrower ineligible

Part-Time Income


Old Rule – Underwriter discretion allowed when received less than 2 years

New Rule – Two years uninterrupted part-time income is required. Average income over prior 2 years or use 12-month average of hours at the current pay rate if the lender documents an increase in pay rate.

Rental Income on Retained Primary Residence
Old Rule – Rental income may be counted when relocating outside of reasonable commute distance for job and borrower has 25% equity.

New Rule – Rental income may be counted when relocating and the new residence is at least 100 miles from previous residence. If no history of rental income since the last tax filing, borrower must have 25% equity.

Non-taxable income


Old Rule – Gross up using tax rate evidenced on last tax return. If borrower did not file a return, use tax rate of 25%.

New Rule – Gross up using the greater of 15% or actual tax rate. If borrower did not file a tax return, use tax rate of 15%

Installment Debts Less Than 10 Months


Old Rule – May be excluded from ratios. If manual underwrite—may be excluded if debt will not affect ability to pay the mortgage.

New Rule – May be excluded ONLY if—they have cumulative payment of less than or equal to 5% of the borrower’s gross monthly income AND the borrower may not pay the debts down to achieve this percentage.

Multiple FHA Loans

Old Rule – If relocating for employment, borrower may obtain a second FHA loan for a new principal residence if current residence is more than a reasonable commute to new residence.

New Rule – If relocating for employment, the commuting distance between the old residence and new residence must be more than 100 miles.

source

http://www.mortgagetalkingpoints.com/2015/04/7-major-fha-rule-changes-eff-june-15-2015/


Senior  Loan Officer
(NMLS#57916)

American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223

 phone: (502) 905-3708
 Fax:     (502) 327-9119

 Company ID #1364 | MB73346

Fill out my form!

Monday, April 20, 2015

Louisville Kentucky First Time Home Buyer Programs and Resources

Louisville Ky First Time Home Buyers Kentucky First Time Home Buyer Programs and Resources


If you are a potential Louisville Kentucky First Time home buyerfirst time home buyer in Louisville Kentucky, we welcome you! It is our utmost desire to assist you in reaching the goal of buying your first home. We've gathered the most helpful, beneficial resources together on this page to make things as easy as possible for you.



We have access to all the Louisville Kentucky First Time home Buyers programs including, FHA, VA, KHC, and USDA, Rural Housing Zero Down home loans--Our site is updated daily for Louisville Kentucky first time home buyers with the best programs and rates available.

What is available for first time home buyer financial programs in Kentucky?The first place to start in that search is the Kentucky Housing Corporation. They provide generous assistance to first time home buyers in the form of grants to help with the down payment as well as closing costs.


The Kentucky Housing Corporation has a down payment assistance program for eligible homebuyers who meet specific moderate income limits to help with downpayment and/or closing costs. Check and see what is available and if you qualify....

To visit the website of the Kentucky Housing Corporation Zero Down Home Loans for Ky Home Buyers First Time. In certain situations they will provide loans for the down payment for first time home buyers in Louisville Kentucky and Jefferson County Kentucky. . It is a great program for first time home buyers and is worth investigating. Simply go to their website above for complete information.



There are other Louisville, Kentucky first time homeownership programs available through the Kentucky Housing Corporation. You can visit the website by clicking here. You'll find information on income limits in order to qualify for the first time home buyer program, program descriptions, a list of approved lenders, an interest rate lock program, and a host of other first time home buyer resources.


In addition to the state programs, there are federal funds and grants available to residents and first time home buyers in Kentucky through the Homes and Communities program of the US Department of Housing and Urban Development. On their website you'll find complete grant information, application forms, description of available funds, as well as many other helpful tools.



Every potential first time home buyer should investigate what they have to offer. You can visit the website by clicking on US Dept. of Housing and Urban Development. Finally, there is a website that lists all grant programs available through the federal government, Grants.gov. Louisville, Kentucky First time home buyers should plan to spend the required time investigating to determine how many specific grants they may qualify for. You can visit the website by clicking here.



We will be adding more resources to this page as we discover them and/or they become available to first time home buyers in Kentucky, so please do bookmark this site and check back often! In the meantime, please do look around and get the most of the information that is here.

Kentucky First Time Home Buyer Grants and Loan Programs

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell



THIS WEBSITE IS NOT AFFILIATED WITH ANY GOVERNMENT AGENCY TO INCLUDE FHA, HUD, USDA, OR ANY OTHER GOVERNMENT AGENCY

Wednesday, April 15, 2015

Kentucky HomePath Mortgage Loans for 2015



HomePath® is proud to launch our HomePath Ready Buyer program, a comprehensive online homebuyer education course. First Time Homebuyers who complete this education course by their initial offer may request up to 3% closing cost assistance toward the purchase of a HomePath property and reimbursement of the HomePath Ready Buyer training cost.

To be eligible for the offer: 
  • Buyers must complete the full online HomePath Ready Buyer training course on www.homepath.com and receive the Certificate of Completion.
     
  • The request for closing cost assistance must be made at initial offer in the HomePath Online Offers system on or after April 14, 2015.
     
  • Must be First Time Homebuyer (did not own a property in the past three years) and plans to reside in the property as their primary residence.
     
  • Auction, pool and investor sales are not eligible. 
Get the full details here on https://www.homepath.com/ready_buyer.html

Download the flyer

Buying a home can be a daunting process, especially for First Time Buyers. That's why HomePath is proud to bring you this homebuyer education course. If you're a First Time Homebuyer, we encourage you to take this education course to prepare you for the responsibilities of homeownership. After completing the course, if you attach the course completion certificate to an initial offer and successfully negotiate a purchase of a HomePath property, you can request up to 3% closing cost assistance toward your purchase. Restrictions apply. See full terms & conditions.
Tell me more about the training.
This course is intuitive, self-directed and interactive. The course is being used by other non-profits and lenders and exceeds both HUD standards and National Industry Standards for Homeownership Education and Counseling. The course has 9 modules with a quiz at the end and takes about 4 hours to complete. The course costs $75. After completing the course, download and save your Certificate of Completion. If you decide to purchase a HomePath property after course completion and you successfully close on a contract, the cost of the course ($75) will be reimbursed.
How do I ask for the 3% closing cost assistance?
After completing the course, you must attach the HomePath Ready Buyer course completion certificate to the initial offer submission on a HomePath property. Your Real Estate Agent must submit this at initial offer on the HomePath Online Offers system.

First-Time Homebuyers who complete this education course by their initial offer may request up to 3%* closing cost assistance toward the purchase of a HomePath property and reimbursement of the HomePath Ready Buyer training cost. To be eligible for this offer: • Buyers must complete the full online HomePath Ready Buyer training course on www.homepath.com and receive the Certificate of Completion. • The request for closing cost assistance must be made at initial offer in the HomePath Online Offers system on or after April 14, 2015. • Must be a First-Time Homebuyer (did not own a property in the past three years) and plan to reside in the property as their primary residence. • Auction, pool, and investor sales are not eligible.

Joel Lobb
Senior  Loan Officer
(NMLS#57916)

American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223

 phone: (502) 905-3708
 Fax:     (502) 327-9119

 Company ID #1364 | MB73346





Fill out my form!

Monday, March 23, 2015