Friday, June 26, 2015

Tuesday, June 16, 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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How much income do I need qualify for Kentucky Home

Kentucky Lender's Criteria: Debt-to-Income Ratios 


From a Kentucky Mortgage lender's perspective, your ability to purchase a home depends largely on the following factors: 

Front-End Ratio 


The front-end ratio is the percentage of your yearly gross income dedicated toward paying your mortgage each month. Your mortgage payment consists of four components: principal, interest, taxes and insurance (often collectively referred to as PITI)  A good rule of thumb is that PITI should not exceed 31% of your gross income. If you make $100,000 a year, then your max house payment to include escrows for home insurance, mortgage insurance, property taxes would be $2583.00

Back-End Ratio 


The back-end ratio, also known as the debt-to-income ratio, calculates the percentage of your gross income required to cover your debts. Debts include your mortgage, credit-card payments, child support and other loan payments. Most lenders recommend that your debt-to-income ratio does not exceed 45% of your gross income. To calculate your maximum monthly debt based on this ratio, multiply your gross income by 0..45 and divide by 12. For example, if you earn $100,000 per year, your maximum monthly debt expenses should not exceed $3,750 with new mortgage payment. Utility bills, car insurance,  cell phone bills, insurance payments does not factor into this ratio. Only bills listed on credit report and 401k loan and child support payments.

There are compensating factors that will allow for higher debt to income ratios for both front and back if you have a large down payment of over 20% or more, credit scores over 740+, and large reserves after loan is made, i.e. 12 months reserves or more money saved up in 401k, retirement account, or savings account. 





Joel Lobb
Senior  Loan Officer
(NMLS#57916)

American Mortgage Solutions, Inc.
10602 Timberwood Circle, Suite 3
Louisville, KY 40223

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

 Company ID #1364 | MB73346





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

Thursday, June 4, 2015

Good Neighbor Next Door Program offered thru HUD officer next door program in Louisville Kentucky HUD Homes for $100 Down



The Good Neighbor Next Door Program offers HUD owned single family (one-unit) homes to eligible participants at a 50% discount. Law enforcement officers, teachers, firefighters and other emergency medical technicians who meet all other requirements of the program are all eligible to participate in this program.

Program
Summary
Borrower is a full-time law enforcement officer, teacher or firefighter/emergency medical technician


A 50 percent discount from the list price is provided in the form of a forgivable second lien


The second mortgage is a mortgage and note payable to and provided by HUD in the amount of the difference between the list price of the home and discounted selling price




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The term of the note is 36 months from the date of owner-occupancy




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Refinance restrictions may apply


One-unit residential properties


Borrower cannot own any other residential property within 12 months of the offer date


None of the borrowers could have ever utilized this program in the past


The following must be detailed on the purchase contract with HUD



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50% discount




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$100.00 downpayment required




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Borrower may finance closing costs


Qualifications

1. You must be able to qualify for an FHA mortgage. 
Good Neighbor Next Door Qualifications
Teachers, Counselors, and Administrators
State certified to teach any grades pre-K through 12
Teach in a private school in the area where the home is located
Teach in the public school district where the home is located
You or your spouse have not had your name on a real estate deed for the past 12 months
You can get a letter of mortgage prequalification or proof of funds before the submitting an intent to purchase
You can provide a refundable earnest money check for 1% of the home’s listed price. It needs to been in the form of a cashier’s check or money order made out to the U.S. Department of HUD.
You intend to teach for at least one more year
Firefighter/Emergency Medical TechniciansYou may participate in the Good Neighbor Next Door program as a Firefighter/Emergency Medical Technician if you are employed full-time as a firefighter or emergency medical technician by a fire department or emergency medical services responder unit of the federal government, a state, unit of general local government, or an Indian tribal government serving the area where the home is located.
You or your spouse have not had your name on a real estate deed for the past 12 months
You can get a letter of mortgage prequalification or proof of funds before the submitting an intent to purchase
You can provide a refundable earnest money check for 1% of the home’s listed price. It needs to been in the form of a cashier’s check or money order made out to the U.S. Department of HUD.
Law EnforcementYou may participate in the Good Neighbor Next Door program as a law enforcement officer if you are employed full-time by a law enforcement agency of the federal government, a state, a unit of general local government, or an Indian tribal government; and, in carrying out such full-time employment, you are sworn to uphold, and make arrests for violations of, federal, state, tribal, county, township, or municipal laws.
You or your spouse have not had your name on a real estate deed for the past 12 months
You can get a letter of mortgage prequalification or proof of funds before the submitting an intent to purchase
You can provide a refundable earnest money check for 1% of the home’s listed price. It needs to been in the form of a cashier’s check or money order made out to the U.S. Department of HUD.

Is the Good Neighbor Next Door a legitimate program? Yes, this a United States Department of Housing and Urban Development program that has been created for the benefit of civil servants when purchasing a designated HUD home. If you want verification you can visit HUD’s website. The program has been created for teachers, firefighters, police officers, and EMT’s.
What does it mean that these houses are 50% off? HUD has their homes appraised based on their current condition. The homes are discounted from this appraised price.  
What is a HUD home? HUD acquires properties from insured lenders who have foreclosed FHA loans.
Are HUD homes bad homes? Just because it’s a HUD home doesn’t mean it’s a bad home. The only reason it’s a HUD homes is because it has gone through foreclosure.
Do all HUD homes qualify for the Good Neighbor Next Door program? No. Only the homes that are designated by HUD are eligible.
How often do Good Neighbor Next Door homes become available? Every day homes are listed some where in the country. Sign-up on the notification list so that you will be notified when a home becomes available in your community.
How long do these homes stay on the market? These homes are only listed for a seven day period. If they don’t sell through the Good Neighbor Next Door program then they will go to the general HUD list at full list price.
Do I have to live in the Good Neighbor Next Door home that I purchase for a certain length of time? To receive the full 50% discount you agree to live in the home for three years.
What if I move out of the house before three years? You will still receive a discount, but it will be prorated according to how long you live in the house.
If I own the house, how can HUD enforce how long I own the home? HUD will require that you sign a silent second mortgage in the amount of the discount. There is no monthly payment or interest on the second mortgage. HUD uses the second to track your homeownership. If you sell your home before the three-year anniversary date then a prorated portion of the second mortgage will be due at closing. This second mortgage will automatically drop off after three years.
My name has been on a deed in the past year, do I still qualify? No, neither your name nor your spouse’s name can have been listed on any real estate deed in the United States in the past year.
Are there any other benefits associated with the Good Neighbor Next Door program? Yes. If you get an FHA loan HUD will allow you to finance in all of your closing costs, move-in for only a $100 down payment, and finance certain home repairs.
How do I submit a bid? You can enter on this website. A qualified broker will call you and give you access to the home, assist you with locating a lender, and monitor inspections & the closing process. We will work with that broker to make sure the closing process goes smoothly.
Who pays the real estate broker? For the Good Neighbor Next Door program, HUD requires that the buyer pay the real estate commission. If you get an FHA loan HUD will allow you to roll the commission into your mortgage. On each property that’s listed on this website there is an approximate mortgage payment. This payment includes the financed commission.
Can I bid higher or lower than the list price? No. In this program HUD will only allow you to submit “an intent to purchase” for full list price. This list price will be discounted by 50% at closing. Everyone who bids will have identical bids.
If there is more than one person bidding on a home, how does HUD determine who wins the house? A computer will randomly decide who wins.
Can you bid on more than one home? You can purchase only one home, but to increase your chances of winning one of the houses you can submit bids on different houses. HUD limits people to only one Good Neighbor Next Door home in their lifetime.
How much earnest money is required? HUD requires that you give your broker a cashier’s check or money order for 1% of the home’s list price. On a $100,000 home your earnest money will be $1,000. HUD has a minimum earnest money requirement of $500 and a maximum $2,000.
I thought the down payment was only $100, what’s this 1% of list price? The 1% earnest money is refundable at closing or if you are not selected as the winner of a home. If you are selected as the winner of a Good Neighbor Next Door home and if you want to finance in all of your closing costs with only a $100 down payment, then you could receive back a check at closing. This check will be your earnest money minus the $100 down payment.  
What if there are significant repairs required on a home and I don’t have the cash to fix it? You are able to get a specific type of FHA loan (203K) that will allow you to finance up to $35,000 worth of home repairs into your mortgage.
Can I use a Good Neighbor Next Door homes as an investment? Yes, but only if you occupy the home and don’t own any other real estate. After three years you can sell the home, realize any increases in value, and pay off the discounted mortgage that you have. Since this is your principal residence you can claim a capital gains exemption and not be taxed on gains. Consult your CPA for details.
What if my employment changes before the three years is up? After you close your discount will not be in jeopardy.
What do I do next? What is the process?  1. Fill out the ”Entry Form” and we will contact you.  Everyone is required to have a letter of prequalification or proof of funds before submitting an “intent to purchase.” You may use any lender that offers FHA financing. If you would like us to help you through the process fill out this questionnaire and we will have a lender get in contact with you. Often, people can get a letter of prequalification within hours of contacting one of the lenders we recommend. 2. View the home. If you don’t have time to view the home you may still have the opportunity to submit your name in the lottery and if selected inspect the home then. 3. Get either a cashier’s check or money order for 1% of the home’s listed price. 4. Decide on one or more homes to submit your intent to purchase.




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

KKentucky HUD Homes for $100 Down



To search for available HUD homes for sale, please click here

To find out more about the Good Neighbor Next Door program, please click here.
Fill out my form for a free mortgage pre-approval same day!

Monday, June 1, 2015

Kentucky FHA Student loans Credit Underwriting Change June 2015

Kentucky FHA Credit Deferred Installment Debt:

Student loans under Income Based repayment plans with payments greater than $0.00 are acceptable. Payments of $0.00 under an IBR plan are not acceptable and will be subject to a payment calculation of 2% of the outstanding balance of the loan. If payments are not listed on the credit report and cannot be verified with the creditor, the payment will be calculated using 2% of the outstanding balance of the loan.



-- 

Joel Lobb
Senior  Loan Officer
(NMLS#57916)



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

 Company ID #1364 | MB73346
Fill out my form!

Friday, May 29, 2015

What do I need to get approved for a Rural Housing Loan in Kentucky?




What do I need to get approved for a Rural Housing Loan in Kentucky?
You really need to look at the four following items below:

Credit Score: They typically want a 640 credit score with no bankruptcies or foreclosures in the last 3 years. KY USDA Loans are initially ran thru GUS (Guarantee Underwriting System), an underwriting approval engine online that Kentucky USDA Mortgage lenders use to tell us how much you are qualified for based on the income, assets, property, and credit provided. Most lenders will want an Approved Eligible. If your score is below 640, you will automatically get a refer eligible which most lenders will not do.

Homeownership: You cannot currently own another home with a USDA loan but there are waivers granted if you can show the current living arrangements are not suitable and safe for your family.

Income: Typically, you cannot make more than $75k approximately for a household family of four, and up to $98k for  a household family of five in most Kentucky counties. Some Kentucky Counties are more but not much.

Location: Kentucky has 120 counties, and USDA is not allowed in the following KY Counties: Jefferson, Fayette (whole county)  and parts of  McCracken, Boone, Kenton, Campbell, Bullitt, Daviess, Warren, Franklin and Christian counties. The best thing to do on the location is tell me an address and I can look it up for you.

I have a website that is really good for USDA loans, located at http://kentuckyruralhousingusdaloan.blogspot.com/p/usda-rural-housing-loan-program.html  that may assist and educate you about the program.

 In order to get you pre-approved, I will need the following items from you. This is a free process and I will give you a copy of your credit report for free. 

 Loan Checklist
The following is a list of documents that may be required to process your  mortgage loan:
  • One full month’s worth of pay stubs
  • Last 2 years W-2′s
  •  Last 2 years tax returns 
  • Last two months bank statements for all accounts

I don't need originals, copies are fine. You can fax, email, or drop off at my office below . 

Let me know your questions. 

Thanks and look forward to helping you
Joel Lobb
Senior  Loan Officer
(NMLS#57916)



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

 Company ID #1364 | MB73346


Fill out my form!