Showing posts with label Bankruptcy. Show all posts
Showing posts with label Bankruptcy. Show all posts

Can you buy a house in Kentucky with Bad Credit?

Getting Approved for a Mortgage Loan in Kentucky with Bad Credit.


 Mortgage late payments: One late payment in the last 12 months is permitted so long as it can be explained and fully documented if necessary.


• Foreclosure: Thirty-six months from the date of the foreclosure until eligibility to repurchase using the 3.5 percent down payment FHA Loan, 48 months for VA Loans (no money down required), seven years no matter the down payment on a conventional type.


• Short sale: Thirty-six months from the date of the short sale until eligibility to repurchase using the 3.5 percent down payment FHA Loan, 24 months with the VA, 24 months on a conventional money loan with a minimum down payment of 20 percent.



Bankruptcy: Chapter 7 (Chapter 13 is less common), 24 months from the date of discharge until eligibility to repurchase using the 3.5 percent down FHA Loan, 48 months on VA Loans (still no money down required),  48 months on conventional no matter the down payment. All mortgage companies have different thresholds of risk appetite. For example, the FHA (Federal Housing Administration) has no credit score requirement. Why, then, do lenders have a minimum credit score requirement of 620 for an FHA Loan? Unbeknownst to the majority of home buyers, many mortgage companies have a secret ominous business strategy.


Enter “investor overlays.” 
Investor overlays are adjustments to guidelines and/or pricing created in favor of the mortgage company. This is exactly why one lender can do the loan, and another lender cannot do the loan in some instances.
Tip: every mortgage lender has investor overlays, it’s the nature of how mortgage companies operate, key is work with the lender whose overlays are minimal.




Timing
Typically speaking, if you want to get a mortgage after bankruptcy you’ll need to allow time to pass. For conventional mortgages you’ll need to wait four years after Chapter 7 bankruptcy or two years after Chapter 13 bankruptcy. But there are some other mortgage options that require a shorter waits.



FHA Mortgage


Two years after your Chapter 7 bankruptcy discharge you may apply for an FHA loan. If you filed Chapter 13 bankruptcy, then you’ll only need to wait until you’ve made twelve months of satisfactory payments, and you’ll need to get the approval of the bankruptcy trustee. But if you want to be given serious consideration, you’ll need to provide a clear explanation for why you filed bankruptcy. For example, maybe you filed Chapter 13 bankruptcy because you had a medical emergency and was unable to pay your medical bills.

VA Mortgage

If you’re a veteran, you can get a VA mortgage two years after your bankruptcy discharge. This VA application process can be challenging, but in some ways it’s more lenient since post-bankruptcy credit issues such as a foreclosure won’t restart the 2-year waiting period. However, credit issues after bankruptcy might affect your interest rate, so take care to keep your credit as clean as possible.

USDA Mortgage

If you live in a rural area, you may qualify for a USDA mortgage three years after your bankruptcy discharge. It’s important to note that while the USDA provides loans to rural residents it’s only for property that will serve as the borrower’s primary residence. The USDA will not finance the purchase of income property or a vacation home.
As you prepare to apply for a mortgage after bankruptcy, keep in mind that the mortgage lender will take into account the totality of your financial situation—your finances, credit history, credit score, and any extenuating circumstances




13,foreclosure,Short Sales,chapter 7,bankruptcy va mortgage,bankruptcy usda mortgage,FHA Mortgages and Bankruptcy,Bankruptcy,






Can You Buy A House After Bankruptcy in Kentucky?

Can You Buy A House After Bankruptcy

Can You Buy A House After Bankruptcy in Kentucky?



In some cases, you have exhausted your emergency fund, and have decided there is no option other than to file for bankruptcy to pay off your debt. You may decide to work with a bankruptcy attorney. Plus, you should know all real estate agents and mortgage lenders who have experience working with people with bankruptcy on their credit score.

When you declare bankruptcy, you may find it hard to improve your credit score and financial condition. Even worse, you may think you will never be able to buy a house again, but the reality is different.

Who wants bankruptcy? Of course, no one wants to fall into this drastic situation. But people dealing with financial troubles may think it is the only way to get out of debts and start from the beginning.

However, bankruptcy may minimize financial stress and allow you to focus on making positive financial decisions for your future. So are you ready to move forward and make your dream of owning a home come true? So, adopt the following strategies to achieve the goal.

How Long After Bankruptcy Can I Buy a House?

You can buy a house approximately one or two years after filing for bankruptcy, only if you restore your credit and avoid new debt. Filing a Chapter 7 or Chapter 13 bankruptcy will impact your credit report and put a negative score on your credit. But it does not mean that you cannot buy your own house.

Chapter 7 Bankruptcy

The standard type of bankruptcy is Chapter 7, in which the court wipes down your qualifying debts. In this case, your credit score is affected. If you file Chapter 7 bankruptcy, you have to wait for about four years after the court dismisses your bankruptcy to make you eligible for a conventional loan.

However, government-backed mortgage loans are more complex. You have to wait for about three years after your bankruptcies' dismissal to qualify for a USDA loan. At the same time, you have to wait for about two years in order to qualify for a VA or FHA loan.

Chapter 13 Bankruptcy

Chapter 13 bankruptcy involves the restructuring of your debts. That means you have to make scheduled payments to your creditors. It does not have a substantial effect on your credit score. Moreover, you can keep your assets as well. While regulations for chapter 13 are less severe than Chapter 7, these loans also have a waiting period.

Conventional loans after chapter 13 bankruptcy usually require a waiting period depending on the court’s choice to handle your bankruptcy. Generally, the waiting period is about four years from the date you file bankruptcy and two years from your dismissal date.

While chapter 7 bankruptcy standards are relaxed for government-backed loans, USDA loans have a 1-year waiting period after filing for Chapter 13 bankruptcy. FHA and VA loans need a court to dismiss or discharge approval of your loan before your apply. However, the waiting period remains the same in both cases, whether dismissal or discharge.


Can You Buy A House After Bankruptcy
Kentucky Mortgage After a Bankruptcy in 2024 – Chapter 7 or 13
Mortgage After a Bankruptcy in 2024 – Chapter 7 or 13

Joel Lobb  Mortgage Loan Officer

American Mortgage Solutions, Inc.


10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364

Text/call: 502-905-3708
fax: 502-327-9119
email:
 kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/


FHA loans in Kentucky After A Bankruptcy

FHA loans in Kentucky After A Bankruptcy

Kentucky FHA Loan Guidelines for Bankruptcy and Foreclosure



Chapter 7

Chapter 7 bankruptcy discharged more than 24 months prior to the application date may be allowed.

Chapter 7 bankruptcy discharged between 12 and 24 months prior to the application date requires satisfactorily established credit and documentation showing the circumstances which caused the bankruptcy were beyond the borrower's control (i.e. unemployment, medical bills not covered by insurance). In these instances, the file must be manually downgraded to a refer and manually underwritten. It falls upon the underwriter to make a final determination as to the overall quality of the file.

Chapter 7 bankruptcy discharged less than 12 months prior to the application date is not allowed.

Chapter 13

Loans where the borrower is currently in a Chapter 13 bankruptcy or had a Chapter 13 bankruptcy which was discharged within the previous 2 years require manual downgrade and must be underwritten manually. Note that manual underwrites require Underwriting Management approval.


A borrower who is currently in a Chapter 13 bankruptcy may be eligible for FHA financing provided all of the following conditions are met in addition to standard manual underwriting requirements:


Foreclosure / Short Sale


A foreclosure less than 3 years ago is not allowed.

In all instances, the “date of foreclosure” is considered the date of the foreclosure deed. The end date of the time frame is determined by the application date.

You can obtain a copy of your bankruptcy paperwork from the website below:


Bankruptcy Courts 👉    http://www.pacer.psc.uscourts.gov/





FHA loans in Kentucky After A Bankruptcy Kentucky FHA Loan Guidelines for Bankruptcy and Foreclosure






Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: FHA loans in Kentucky After A Bankruptcy

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: FHA loans in Kentucky After A Bankruptcy:



FHA loans in Kentucky After A Bankruptcy


FHA Mortgage
Two years after your Chapter 7 bankruptcy discharge you may apply for an FHA loan.
 If you filed Chapter 13 bankruptcy, then you’ll only need to wait until you’ve made twelve months of satisfactory payments, and you’ll need to get the approval of the bankruptcy trustee. But if you want to be given serious consideration, you’ll need to provide a clear explanation for why you filed bankruptcy. For example, maybe you filed Chapter 13 bankruptcy because you had a medical emergency and was unable to pay your medical bills.


FHA loans in Kentucky After A Bankruptcy



WHAT IS THE MINIMUM CREDIT SCORE FOR A KENTUCKY FHA MORTGAGE HOME LOAN APPROVAL?


Kentucky FHA Mortgage Credit Score Requirements


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 500 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.


The new credit requirements are not expected to dramatically change the number of Kentucky FHA mortgage approvals.


Get used to the term credit overlays. You may call several FHA lenders and a lot of them will tell you that even though FHA will insure lower credit scores, most lenders had already imposed a minimum credit score requirement of 580 to 620 or higher for Kentucky FHA borrowers.


In limited cases, borrowers with scores between 580 and 639 could still obtain mortgage approval with compensating factors such as large down payment (more than 3.5% minimum), low debt to income ratios, and substantial reserves in the bank with a verifiable pay history of no late payments in the last 12 months of rent and on credit report. A late is considered 30 days late in the credit rating world.

Ultimately, there is no singular credit score that can guarantee you a mortgage approval. Each lender is free to set their own credit score requirements.

But many loan types are insured by government organizations. And lenders cannot accept borrowers with credit scores below the minimum these organizations set. The four most popular home loan types are:


Conventional: Not backed by any government agency, but must meet the Fannie Mae and Freddie Mac underwriting guidelines

FHA: Loans backed by the Federal Housing Administration


VA: Loans backed by the US Department of Veterans Affairs (for military members)USDA: Loans backed by the US Department of Agriculture (for low- to moderate-income families who buy homes in rural areas)



The minimum credit score requirements for each of these loan types:



Conventional:


620 SCORE NEEDED. BUT TO GET APPROVED FOR A FANNIE MAE LOAN MOSTLY LIKE YOU WILL NEED A 720 SCORE OR HIGHER IF YOU HAVE LESS THAN 20% EQUITY POSITION OR LESS THAN 20% DOWN PAYMENT DUE TO PRIVATE MORTGAGE INSURANCE


FHA:

580 for a 3.5% down payment
500 for down payments of at least 10%
**MOST FHA LENDERS WILL WANT A 580 to 620 CREDIT SCORE NOWADAYS

VA:

No minimum BUT MOST VA LENDERS WILL WANT A 580 to 620 CREDIT SCORE

USDA:

No minimum, but with a credit score of at least 620 to 640 you could qualify for streamlined credit analysis and chances of approval goes way down if score is below 640...



WHAT IS THE MINIMUM CREDIT SCORE FOR A KENTUCKY FHA MORTGAGE HOME LOAN APPROVAL?






Which credit score is used to qualify for a Mortgage loan in Kentucky?






CREDIT SCORES OR FICO SCORES USED FOR A KENTUCKY MORTGAGE LOAN APPROVAL




For example if you have a 598, 625, 604 on each of the main three reporting agencies, then your qualifying fico score would be 604. 



If you’re planning to apply for a mortgage, be aware that the credit score you see on your application might differ slightly from the one you’re used to. 

It might even be different than what comes up when you monitor your credit, or even when you apply for a car loan.

Banks use a slightly different credit score model when evaluating mortgage applicants. Below, we go over what you need to know about credit scores you’re looking to buy a home.

The scoring model used in mortgage applications

While the FICO® 8 model is the most widely used scoring model for general lending decisions, banks use the following FICO scores when you apply for a mortgage:

FICO® Score 2 (Experian)
FICO® Score 5 (Equifax)
FICO® Score 4 (TransUnion)

As you can see, each of the three main credit bureaus (Equifax, Experian and TransUnion) use a slightly different version of the industry-specific FICO Score. That’s because FICO tweaks and tailors its scoring model to best predict the creditworthiness for different industries and bureaus. You’re still evaluated on the same core factors (payment history, credit use, credit mix and age of your accounts), but the categories are weighed a little bit differently.


The FICO 8 model is known for being more critical of high balances on revolving credit lines. Since revolving credit is less of a factor when it comes to mortgages, the FICO 2, 4 and 5 models, which put less emphasis on credit utilization, have proven to be reliable when evaluating good candidates for a mortgage.

Mortgage lenders pull all three reports,from all three bureaus, but they only use one when making their final decision.

“A bank will use all three bureaus,”--- “It’s called a tri-merge.”

If all three of your scores are the same, then their choice is simple. But what if your scores are different?


If two of the three scores are the same, lenders use that one, regardless of whether it’s higher or lower than the other one.

And if you are applying for a mortgage with another person, such as your spouse or partner, each applicant’s FICO 2, 4 and 5 scores are pulled. The bank identifies the median score for both parties, then uses the lowest of the final two.

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916

American Mortgage Solutions, Inc.

Text/call:      502-905-3708
fax:            502-327-9119
email:
          kentuckyloan@gmail.com

 





How To Get Approved for A Kentucky FHA, VA, USDA, Mortgage Home Loan After A Bankruptcy?




How To Get Approved for A Kentucky FHA, VA, USDA, Mortgage Home Loan After A Bankruptcy?



Many debtors fear that a bankruptcy will close off any chance of getting a mortgage. But that’s simply not true, with a little time and proper planning you can get a mortgage with good interest rates.
Rebuild Your Credit
If you want to get a mortgage after bankruptcy, you’ll need to get busy rebuilding your credit right away. If you make sure your credit report accurately reflects your bankruptcy, all zero balance credit accounts are closed at the time of your discharge, and pay your credit bills on time you will begin to see some improvement in your credit score within 12 months of your discharge.
Here are some key tasks in rebuilding your credit:
  • Get a secured credit card

  • Credit Score
While the items on your credit report matter, you’ll also need to watch your FICO score. There are many different types of credit scores out there.  You have the individual credit bureaus scores (Experian, Trans Union, and Equifax), FICO scores, Vantage Scores, and industry specific scores. However when looking to purchase a home you will want to watch your FICO as it is used in an overwhelming majority of mortgage related credit evaluations.
Also it’s important to note that FICO changes the way they evaluate creditworthiness based on new information and changes in the market.  They have recently release FICO version 9. Since the majority of mortgage lenders still use an older FICO scoring model, when evaluating and monitoring your score, FICO recommends you use one calculated from a scoring model previous to Version 8.
When evaluating your FICO score it’s good to know that a score above 760 is considered excellent while a score under 620 is considered poor AND IT WILL BE HARD TO GET PRE-APPROVED WITH A CREDIT SCORE BELOW 580 RIGHT NOW
Timing
Typically speaking, if you want to get a mortgage after bankruptcy you’ll need to allow time to pass. For conventional mortgages you’ll need to wait four years after Chapter 7 bankruptcy or two years after Chapter 13 bankruptcy. But there are some other mortgage options that require a shorter waits.
FHA Mortgage
Two years after your Chapter 7 bankruptcy discharge you may apply for an FHA loan. If you filed Chapter 13 bankruptcy, then you’ll only need to wait until you’ve made twelve months of satisfactory payments, and you’ll need to get the approval of the bankruptcy trustee. But if you want to be given serious consideration, you’ll need to provide a clear explanation for why you filed bankruptcy. For example, maybe you filed Chapter 13 bankruptcy because you had a medical emergency and was unable to pay your medical bills.
VA Mortgage
If you’re a veteran, you can get a VA mortgage two years after your bankruptcy discharge. This VA application process can be challenging, but in some ways it’s more lenient since post-bankruptcy credit issues such as a foreclosure won’t restart the 2-year waiting period. However, credit issues after bankruptcy might affect your interest rate, so take care to keep your credit as clean as possible.
USDA Mortgage
If you live in a rural area, you may qualify for a USDA mortgage three years after your bankruptcy discharge. It’s important to note that while the USDA provides loans to rural residents it’s only for property that will serve as the borrower’s primary residence. The USDA will not finance the purchase of income property or a vacation home.
As you prepare to apply for a mortgage after bankruptcy, keep in mind that the mortgage lender will take into account the totality of your financial situation—your finances, credit history, credit score, and any extenuating circumstances.

How To Get Approved for A FHA, VA, USDA, Mortgage Home Loan After A Bankruptcy?









--

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916

American Mortgage Solutions, Inc.

Text/call:      502-905-3708
fax:            502-327-9119
email:
          kentuckyloan@gmail.com

 CONFIDENTIALITY NOTICE: This message is covered by the Electronic Communications Privacy Act, Title 18, United States Code, §§ 2510-2521. This e-mail and any attached files are deemed privileged and confidential, and are intended solely for the use of the individual(s) or entity to whom this e-mail is addressed. If you are not one of the named recipient(s) or believe that you have received this message in error, please delete this e-mail and any attached files from all locations in your computer, server, network, etc., and notify the sender IMMEDIATELY at  502-327-9770. Any other use, re-creation, dissemination, forwarding, or copying of this e-mail and any attached files is strictly prohibited and may be unlawful. Receipt by anyone other than the named recipient(s) is not a waiver of any attorney-client, work product, or other applicable privilege. E-mail is an informal method of communication and is subject to possible data corruption, either accidentally or intentionally. Therefore, it is normally inappropriate to rely on legal advice contained in an e-mail without obtaining further confirmation of said advice.

Kentucky Bankruptcy Guidelines for Kentucky Conventional & Kentucky FHA Mortgage Loans

Can you buy a home while in bankruptcy in Kentucky?



KENTUCKY MORTGAGE WITH A BANKRUPTCY

KENTUCKY MORTGAGE WITH A BANKRUPTCY



Bankruptcy Chapter 7


Kentucky Fannie Mae Guidelines for a Previous Chapter & Bankruptcy:




4 years from discharge or dismissal date
2 years from discharge or dismissal date it borrower meets FNMA definition for Extenuating Circumstances
5 years if more than one bankruptcy was filed within the last 7 years


Kentucky FHA Guidelines for a Past Bankruptcy Chapter 7


2 years from the discharge date for DU approval. Case number assignment cannot be ordered until wait period has elapsed
Manual underwrites are allowed on a refer/eligible DU finding as long as 2 years has elapsed from the discharge date and the borrower has either re-established good credit or chosen not to incur any new credit obligations
Exception for 2 year wait period:
An elapsed period less than 2 years but no less than 12 months may be acceptable
The borrower must document the bankruptcy was caused by extenuating circumstances beyond their control such as a serious illness or death of a wage earner
The borrower must document an ability to manage their financial affairs in a responsible manner
Divorce, loss of a job, or inability to sell a home after relocation is not an acceptable extenuating circumstance


Bankruptcy Chapter 13


KY Fannie Mae Bk Guidelines for Chapter 13 Bk


2 years from discharge date
4 years from dismissal date
2 years from dismissal date it borrower meets FNMA definition for Extenuating Circumstances 5 years if more than one bankruptcy was filed within the last 7 years


Kentucky FHA Mortgage Guidelines for Chapter 13


2 years from the discharge date for DU approval. Case number assignment cannot be ordered until wait period has elapsed
Manual underwrites are allowed 1 day after discharge date or at least 12 months of the payout period under the bankruptcy has elapsed at the time of case number assignment
Must receive a refer/eligible DU finding
Must have documentation of 12 months satisfactory payment history
Must have written permission from trustee to enter into new mortgage transaction

How to Get Approved for a Kentucky Mortgage While in A Chapter 13 Bankruptcy:


Can you get a mortgage loan while in a Chapter 13 Bankruptcy?

Here is a brief summary:

You must have 12 payments paid into the Chapter 13 before you can apply for a mortgage loan.

The payments must be made on time for last 12 months or after 12 months if you have been in longer, so no late payments to the Chapter 13 while in it.

You have to ask permission from the courts to seek a mortgage loan. They usually grant this. I have never not seen them grant it.

You have to qualify with the new house payment along with Chapter 13 payments and other debts listed on credit report. Debt to income ratios usually center around 31 and 43% respectively, meaning the new house payment should not be more than 31% of your gross monthly income and your total house payment and debts listed on credit report along with Chapter 13 payment should not be more than 43% of your total gross monthly income.

Credit scores
: Most FHA lenders I work with will want a 620-middle score. You have three fico scores from Experian, Equifax, and Transunion, and they throw out the high and low score and take middle score. For example, if you had a 598, 679, and 590 scores respectively for all three bureaus listed above, your qualifying score would be 598.

There are some FHA investors that I am set up with that will go down to 580, but I have seen in my past experiences 620 will get you a better deal and far greater chance of closing on your loan with FHA.

Down payment:
For FHA loans, you will need to have at least 3.5% down payment saved up. It is extremely hard to find a no money down loan program to get you approved for a mortgage while you are in a Chapter 13 plan.

FHA and USDA are really the only two options that I know of that offer financing for a borrower with a current Chapter 13 Bankruptcy plan, so keep that in mind.

Conventional loan program offered by Fannie Mae will not allow a mortgage loan for someone in a Chapter 13 Bankruptcy plan.

On USDA loans, it is possible to get 100% Financing after you have paid into the plan for 12 months with a good pay history. The credit scores needed for a USDA loan approval really need to be above 640 in my past experience in getting them approved. 

A lot of USDA lenders will say they will do down to 620, but it is very difficult getting them approved. Best to get your scores up to increase your changes in qualifying for a USDA loan. There is not much that difference in getting your scores up to that range if you are at a 620 score now.

With USDA loans, they have income and property eligibility requirements that FHA does not have, so below is a rough run down of FHA vs USDA loan for you:


Typically, USDA-eligible properties are located in rural areas. It is a mistake, however, to think that you have to live far out in the country to qualify for a USDA loan. USDA-eligible properties are often located near urban areas.

A property’s eligibility is determined by its location with respect to USDA’s map of eligible locations. The USDA program also places limits on your household income based on median earnings in an area. If you exceed that limit, you can’t obtain a USDA loan.

The FHA, by contrast, does not place limits on household earnings. The FHA, however, does establish a maximum limit on the amount of money that can be borrowed through the program.

So, if you were in a hurry to buy, after you have been in your Chapter 13 plan for 12 months, I can look at getting you approved to buy a home if you wish:







If you have questions about qualifying as first time home buyer in Kentucky, please call, text, email or fill out free prequalification below for your next mortgage loan pre-approval.


Joel Lobb
Senior Loan Officer

(NMLS#57916)


Text or call phone: (502) 905-3708

email me at kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

Buy a Home Again After Foreclosure Short Sale or Bankruptcy FHA Conventi...

Conventional Mortgage Guidelines for Kentucky in 2020


 These are called conventional because they must conform to the Freddie Mac and Fannie Mae standards set by the government, but they are not government insured. This poses a greater risk to lenders because they are not guaranteed repayment in the event the loan defaults; rather, they are forced to take a personal loss.

For these reasons, conventional mortgages are more difficult to obtain with stricter lending requirements in regards to credit score, down payment, debt to income ratio, mortgage insurance  and previous bankruptcies or foreclosure.

 Let's take a look at each subject below:👇


Credit Scores: 


Fannie Mae and Freddie Mac Require a minimum 620 credit score.

You have three credit scores from Experian, Equifax, and Transunion, and they take the middle score, throwing out the high and low score. The higher the credit score the better pricing you will get on the rate and mortgage insurance along with your down payment.
Ideally for higher credit score buyers, say over 680, and with at least 3% down payment with a low debt to income ratio.


Down Payment:  

Conventional mortgage loans require a minimum of 3% down payment. The more you put down, the better the rate, lower the mortgage insurance, and greater chances of getting approved.

If you put down 20%, then you will not have to pay mortgage insurance, or if you refinance an existing loan that has mortgage insurance, you can potentially get rid of the mortgage insurance if your equity position is less than 20% of the home's value.


Debt to Income: 


Conventional Mortgage loans typically will not allow for a back-end ratio of over 45%. They're two ratios, the front-end and back-end ratio. The front-end ratio is a percentage of the total house payment of your total gross monthly income. The back-end ratio is the new total house payment along with the monthly payments on your credit report divided by your total gross monthly income.

For example, if you make $3,000 gross a month, your total backend ratio would me maxed out at 1,350 a month. So if you had $300 in monthly payments on the credit report, this would allow for a maximum house payment of $1,050.00

Mortgage Insurance:


 Mortgage insurance is typically cheaper and less expensive on conventional mortgage loans. They're competing private mortgage insurance companies competing for the business with the names of MGIC, Radian, Essent, Genworth and Ugcorp.

 Conversely, it is not like Government insured FHA, VA and USDA  mortgage loans where all applicants get the same premiums regardless of credit score, down payment and debt to income ratio. Mortgage insurance is usually expressed as a monthly premium, with no upfront mortgage premiums like FHA, VA, and USDA government loan programs.

The higher the credit score, lower debt to income ratio and more nd can be removed once you reach 80% equity position in the home.

Bankruptcies and Foreclosure: 

A four-year waiting period is required, measured from the discharge or dismissal date of the bankruptcy action.
Exceptions for Extenuating Circumstances
A two-year waiting period is permitted if extenuating circumstances can be documented, and is measured from the discharge or dismissal date of the bankruptcy action.
A distinction is made between Chapter 13 bankruptcies that were discharged and those that were dismissed. The waiting period required for Chapter 13 bankruptcy actions is measured as follows:
  • two years from the discharge date, or
  • four years from the dismissal date.

.Foreclosure

A seven-year waiting period is required, and is measured from the completion date of the foreclosure action as reported on the credit report or other foreclosure documents provided by the borrower.

These transaction types are completed as alternatives to foreclosure.
  • A deed-in-lieu of foreclosure is a transaction in which the deed to the real property is transferred back to the servicer. These are typically identified on the credit report through Remarks Codes such as “Forfeit deed-in-lieu of foreclosure.”
  • A preforeclosure sale or short sale is the sale of a property in lieu of a foreclosure resulting in a payoff of less than the total amount owed, which was pre-approved by the servicer. These are typically identified on the credit report through Remarks Codes such as “Settled for less than full balance.”
  • A charge-off of a mortgage account occurs when a creditor has determined that there is little (or no) likelihood that the mortgage debt will be collected. A charge-off is typically reported after an account reaches a certain delinquency status, and is identified on the credit report with a manner of payment (MOP) code of “9.”
A four-year waiting period is required from the completion date of the deed-in-lieu of foreclosure, preforeclosure sale, or charge-off as reported on the credit report or other documents provided by the borrower.
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346

Text/call 502-905-3708
kentuckyloan@gmail.com
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.
Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant's eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/