I specialize in Kentucky FHA, VA, USDA & Rural Housing, KHC and Fannie Mae mortgage loans. I have helped over 589 Kentucky families buy their first home and refinance their current mortgage for a lower rate; First time buyer $0 down still available with down payment assistance with KHC. Free Mortgage applications same day approvals. This web site is not endorsed by the FHA, VA, USDA, HUD or any other govt agency.Text/call 502-905-3708 kentuckyloan@gmail.com
NMLS#57916 Equal Housing Lender
Kentucky Housing is a trusted state agency in Frankfort, KY that works with local lenders to ensure all Kentucky home buyers have access to safe and affordable housing with access to down payment assistance help and counseling if needed to buy a home.
Do I need to be a first-time home buyer to do a KHC loan?
No, you do not have to be a first time home buyer with KHC loans.
How much down payment assistance can I get to buy a home in Kentucky?
Regular DAP
Purchase price up to $314,827 with Secondary Market.
Assistance in the form of a loan up to $6,000 in $100 increments.
Repayable over a ten-year term at 5.50 percent.
Available to all KHC first-mortgage loan recipients.
Affordable DAP
Purchase price up to $314,827 with Secondary Market.
Can I use the $6,000 for repairs to the home or buy stuff for the home?
No you cannot! The $6,000 down payment assistance can be used for down payment, closing costs and prepaids.
How long can I lock a KHC Loan?
You can lock a KHC Loan for 45 days
How long does it take to clsoe a KHC loan?
It takes about 30 to 45 days typically to close a KHC loan.
Can I just get a down payment assistance loan from Kentucky Housing?
In order to use the down payment assistance programs from KHC, you must do the first mortgage loan with them too. Additional eligibility requirements may apply, including income limits.
What if I have bad credit and I get a KHC loan?
Kentucky Housing loans require a minimum 620 credit score. The usually follow agency guidelines for credit, bankruptcy, foreclosure, collections, etc depending on it is FHA, VA, USDA, Fannie Mae.
Can I build a home with a KHC loan?
Kentucky Housing does not provide temporary construction loans, but we can provide the permanent financing for a new construction property with one of your loan programs including FHA, VA, USDA, or Fannie Mae. How much can the house cost for a KHC Loan?
Our current purchase price limits are $314,827 in the state of Kentucky Consult your lender to determine the amount you are approved to borrow in regards to agency debt to income ratios requirements. KHC typically will not go above 40% for the front-end housing ratio, or over 50% for the total debt to income ratio. They will make exceptions sometimes.
What is the required down payment for a KHC Loan?
Required down payments range from 0-3.5% depending on the underlying loan product (Conventional, FHA, RD, VA).
Is a co-signer allowed on a KHC Loan?
KHC does not allow for co-signers to qualify for a mortgage loan
Can I finance improvements or repairs?
KHC does not offer rehab loans or 203k loans, or Renovation loans.
Are there income limits based on gross or net income for a KHC?
Gross household income limits for total household income.
Can I finance a manufactured or mobile home with KHC?
Manufactured and mobile homes are eligible under some mortgage products for KHC Loans. Homes must be double-wide, permanently attached to a foundation, and taxed as real estate (not personal property). Consult your lender for more information.
Read more below at the links for KHC Detailed Mortgage Information in regards to fully qualifying for a KHC loan.
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#57916http://www.nmlsconsumeraccess.org/
-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.
If you are looking to get a mortgage loan in 2020 in the state of Kentucky and you have past credit problems, there maybe some hope for Kentucky Home-buyers to buy a home of their own.
Before we look at some possible home-buying programs, let's first look at what is considered Bad Credit, or less than perfect credit.
Most of the times when borrowers say they have bad credit, they mean one of the following:
Past or Current Bankruptcies
Low credit scores or fico scores
Collections on credit report showing unpaid or paid.
Delinquent or behind on credit cards, mortgage, car loan payments
Foreclosure or short sale where they lost a home to default
Owe back taxes to the Federal Government.
Defaulted Student Loans
Delinquent Child Support Obligations Disputed accounts on credit report
Below I have listed one of the most popular programs Kentucky Home Buyers need to consider when buying a home in 2020 if they have experienced some of the credit issues mentioned above:
When it comes to getting a mortgage loan with past credit problems, FHA is probably going to be your best bet.
They're the most lenient on credit scores, down payment requirements and credit history when it comes to qualifying for a Kentucky Home Loan.
I have listed below some of the requirements you must overcome to get approved for a Kentucky FHA home loan.
Kentucky FHA Mortgage Loans:
The credit score requirements for Kentucky FHA home loans:
FHA says on paper in their written guidelines that they will insure a FHA loan down to 500 - 579 with a 10% down payment or 580+ with a 3.5% down payment. However, in the real world of lending in the secondary market, most lenders will not adhere to these guidelines.
Most FHA investors will want a 620 middle credit score, but they're a few that will go by the written FHA guidelines above for credit scores, but very few. Your best bet is to get with a loan officer and get your scores up to at least 580 so you can have a better shot of getting approved and access to more FHA lenders.
Be aware there are a lot of credit scores out there, but each lender must pull their own credit report and credit scores to determine your creditworthiness. I would shop around first to see what the requirements are for each FHA lender before they pulled your credit report.
Mortgage lenders use the FICO score model below for each credit bureau when they look at your credit scores.
MyFICO is now selling additional score versions to the public. These include three scores most often used by mortgage lenders:
ExperianFICO Score 2 (also known as EX-98 or Risk Model v2)
TransunionFICO Score 4 (also known as TU-04 or TransunionFICO Risk Score Classic 04)
EquifaxFICO Score 5 (also known as EQ-04 or Beacon 5).
Bankruptcy Requirements for Kentucky FHA Home Loans:
FHA states in their published guidelines that if you had a Chapter 7 Bankruptcy, you must wait 2 years from the discharge date to reapply for a FHA insured mortgage loan.
If you had a Chapter 13 Bankruptcy and have a 12 month on-time payment history with the courts, you can potentially get approved for a FHA loan if you get permission from the trustee and qualify with the Chapter 13 payment plan in your debt to income ratio. If you have been in the plan for over 12 months, and have a good pay history, you can submit your paperwork for FHA approval.
For example, let's say you have been in the Chapter 13 repayment plan for 3 years and you want to buy a home using FHA financing. You could go ahead and petition the Chapter 13 trustee for approval from the courts to get a home loan. The trustee of the Chapter 13 courts will want to know your new loan payment with the home loan, so make sure you know how much you want to borrow before you apply ,.
Collections on Credit Report Requirements for Kentucky FHA Home Loans:
:
If the credit report shows a cumulative balance of $2,000 or more for collection accounts:
The debt(s) must be paid in full prior to or at closing, or
Payment arrangements must be made with the creditor and the monthly payment included in the DTI, or
A monthly payment of 5% of the outstanding balances of each collection must be included in the borrower’s DTI.
Collection accounts of non-borrowing spouses in a community property state must be included in the $2,000 cumulative balance and analyzed as part of the Borrower’s ability to pay all collection accounts. Community property states are Arizona, California, Texas, Washington, and Wisconsin
Medical collections and charge offs are excluded from this guidance.B. Judgments – Loans for borrowers with outstanding judgments are generally not acceptable unless the following documentation is obtained. a. Judgment must be on the credit report that is linked to the TOTAL Scorecard findings and the findings must be “approve/eligible” or “accept/accept.” b. If the judgment will not be paid off and released prior to the closing, evidence of a payment agreement may be considered. The payment agreement must be in writing and provided at the time of underwriting. Crescent will require evidence that 12 months satisfactory payments have been made as scheduled. Borrowers may not pre-pay scheduled payments in order to meet this requirement. The monthly payment must be considered in the borrower’s debt-to-income ratio for qualifying. c. Any judgments that are discovered in the processing of the loan that ARE NOT on the credit report linked to the TOTAL findings require the loan to be manually downgraded to “refer” status. Crescent does not approve loans that must be manually downgraded. d. A subordination agreement will be required for any judgment that is also a lien against the borrower and/or the subject property. C. Disputed Accounts – Because disputed accounts are not generally considered in the borrower’s credit report FHA will now require loans of borrowers who have derogatory disputed accounts with cumulative balances of $1000 or more (excluding medical) to be downgraded to “refer” findings and manually underwritten. As you are aware, Crescent does not approve loans that require manual underwriting. NOTE 1: Disputed derogatory credit account of a non-purchasing spouse in a community property state are not included in the cumulative balance for purposes of determining if the mortgage application must be downgraded to a “refer.” NOTE 2: Disputed medical collections are excluded from the $1000 limit as are derogatory credit accounts resulting from identity theft, credit theft unauthorized use, etc. However, documentation must be provided to conclusively support the disputed status. Documentation might entail police reports, letters from the creditor, etc. II. ML 2013-26 – Back to Work-Extenuating Circumstances The guidance provided in ML 13-26 requires loans to be manually underwritten. For this reason Crescent cannot approve loans that need these credit underwriting leniencies. III. ML 2013-29 – Application of Unused Funds from
Short-sale or Foreclosure Guidelines for a Kentucky FHA Loan:
If you have experienced a short-sale or foreclosure, FHA states that you must wait 3 years from the date of the sale to obtain FHA financing again. And important note is this: The waiting period starts not when you were discharged from the home or bankruptcy, the waiting period starts when the home is sold and the deed transferred at the courthouse.
This is important to remember because a lot of people think it starts when they vacate the home or when there bankruptcy is discharged if the mortgage was in the bankruptcy, but it does not!!! The date used to end the waiting period starts when the deed is transferred at the courthouse from the owner to back to bank or whomever buys the home in the default.
Delinquent Federal Debt (Taxes, Student Loans) Kentucky FHA Loan Requirements:
If you have a delinquency with the Federal Government, this could hurt your chances of getting approved for a FHA backed Mortgage Loan. Here is why:
All FHA participants are ran through the CAVIRS Alert System administered by HUD to check to see if the mortgage applicant is delinquent to the Federal Government. This usually arises from an IRS income tax lien, over-payment on a social security claim, or lastly, a defaulted student loan.
A lot of the times FHA borrower don't realize that if they don't pay there Federal backed student loans, they go into default and this will hold you up from getting a FHA loan or possibly they will hold your tax refund.
If you have been delinquent on your student loans, you have to call and get on a 9 month repayment plan with them and they will clear you of your CAVIRS Alert. The payment plan can be as little as 5 or $10 a month, but the important thing is to get started so this will improve your credit rating too along with releasing the liens against you for other federal assistance like tax refunds, social security payments and benefits to name just a few.
I have done many FHA loans in Kentucky where they have rehabbed their Student loans if they are backed by Federal government and got them loan after 9 months.
If you happen to have an agreement already worked-out with the IRS or student loan creditors, sometimes we can take that arrangement and get you approved sometime with FHA depending on the lender.
Child Support Obligations Kentucky FHA Loan Requirements:
If the credit report shows a delinquent child support agreement, the FHA Government Underwriter will want to see the current child support agreement and what the monthly payment is so as to make sure they have your debt to income ratio figured correctly. You can have a delinquency report of child support on your credit report and still get an FHA loan.
It is okay to be paying child support ,a lot of times it shows on a borrower's pay stubs, and if so, we simply use that child support obligation to use for debt to income ratio qualifying.
As you can see, it is quite possible to buy a home in Kentucky with past bad credit. I work with a lot of mortgage applicants that has experienced credit issues in the past, but with the right direction and guidance, I can possibly get you into a home in 2020.
Put my 20 years of Kentucky Mortgage Experience to work for you .
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#57916http://www.nmlsconsumeraccess.org/
-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.
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:
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.
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 and Fannie Mae or Conventional loans require a 3% to 5% down payment. The more you put down, the better your rate and terms usually and your chances of qualifying.
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
620 is the bottom score (again with few exceptions) that lenders will permit. Below a 620, then you have to look at doing a FHA loan or VA loan if you are a veteran. 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. 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. For example lets say you have a 590 on Transunion, 679 on Experian, and a 618 on Equifax. Then your middle qualifying credit score will be 618 credits score.
If you absolutely cannot get your credit scores up to 620, then FHA will be a good option for you. FHA states that if your fico credit score is 580 or above they will allow for a 3.5% down payment, and if below 580, you will need 10% down payment.
There are a lot of mortgage lenders that will not go below 620, so keep that in mind when you are shopping for a mortgage lender, because they create credit overlays.
Kentucky FHA Mortgage Loans currently requires 3 years removal from a foreclosure or short sale and 2 years on a bankruptcy with good re established 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!
• Closing costs will vary on which rate you choose and the lender. Typically the higher the rate, the lesser closing costs due to the lender giving you a lender credit back at closing for over par pricing. Also, called a no-closing costs option. You have to weigh the pros and cons to see if it makes sense to forgo the lower rate and lower monthly payment for the higher rate and less closing costs.
Fico scores needed start at 620, but most conventional lenders will want a higher score to qualify for the 3-5% minimum down payment requirements Most buyers using this loan have high credit scores (over 720) and at least 5% down.
The rates are a little higher compared to FHA, VA, or USDA loan but the mortgage insurance is not for life of loan and can be rolled off when you reach 80% equity position in home.
Conventional loans require 4-7 years removed from Bankruptcy and foreclosure.
Max Conventional loan limits are set at $484, 350 for 2019 in Kentucky
If you meet income eligibility requirements and are looking to settle in a rural area, you might qualify for the KY USDA Rural Housing program. The program guarantees qualifying loans, reducing lenders’ risk and encouraging them to offer buyers 100% loans. That means Kentucky home buyers don’t have to put any money down, and even the “upfront fee” (a closing cost for this type of loan) can be rolled into the financing.
Fico scores usually wanted for this program center around 620 range, with most lenders wanting a 640 score so they can obtain an automated approval through GUS. GUS stands for the Guaranteed Underwriting system, and it will dictate your max loan pre-approval based on your income, credit scores, debt to income ratio and assets.
They also allow for a manual underwrite, which states that the max house payment ratios are set at 29% and 41% respectively of your income.
They loan requires no down payment, and the current mortgage insurance is 1% upfront, called a funding fee, and .35% annually for the monthly mi payment. Since they recently reduced their mi requirements, USDA is one of the best options out there for home buyers looking to buy in an rural area.
A rural area typically will be any area outside the major cities of Louisville, Lexington, Paducah, Bowling Green, Richmond, Frankfort, and parts of Northern Kentucky .
There is a map link below to see the qualifying areas.
There is also a max household income limits with most cutoff starting at $76,000 for a family of four, and up to $98,000 for a family of five or more.
USDA requires 3 years removed from bankruptcy and foreclosure.
FHA loans are good for home buyers with lower credit scores and no much down, or with down payment assistance grants. FHA will allow for grants, gifts, for their 3.5% minimum investment and will go down to a 580 credit score.
The current mortgage insurance requirements are kinda steep when compared to USDA, VA , but the rates are usually good so it can counteracts the high mi premiums.
As I tell borrowers, you will not have the loan for 30 years, so don’t worry too much about the mi premiums.
THe mi premiums are for life of loan like USDA.
FHA requires 2 years removed from bankruptcy and 3 years removed from foreclosure.
Maximum FHA loan limits in Kentucky are set around $304,000 and below for 2019 FHA
VA loans are for veterans and active duty military personnel. The loan requires no down payment and no monthly mi premiums, saving you on the monthly payment. It does have an funding fee like USDA, but it is higher starting at 2% for first time use, and 3% for second time use. The funding fee is financed into the loan, so it is not something you have to pay upfront out of pocket.
VA loans can be made anywhere, unlike the USDA restrictions, and there is no income household limit and the max loan is $453,000 in Kentucky
Most VA lenders I work with will want a 580 credit score even though on paper, VA says they don't have a minimum credit score.
VA requires 2 years removed from bankruptcy or foreclosure.
This type of loan is administered by KHC in the state of Kentucky. They typically have $4500 to $6000 down payment assistance year around, that is in the form of a second mortgage that you pay back over 10 years at a interest rate of 1% or 5.5% depending on your income in the household.
Sometimes they will come to market with other down payment assistance and lower market rates to benefit lower income households with not a lot of money for down payment.
KHC offers FHA, VA, USDA, and Conventional loans with their minimum credit scores being set at 620 for all programs.
The conventional loan requirements at KHC requires 660 credit score.
The max debt to income ratios are set at 40% an 50% respectively.
∘ What kind of credit score do I need to qualify for different first time home buyer loans in Kentucky?
Answer. Most lenders will wants a middle credit score of 620 to 640 for KY First Time Home Buyers looking to go no money down. The two most used no money down home loans in Kentucky being USDA Rural Housing and KHC with their down payment assistance will want a 620 to 640 middle score on their programs.
If you have access to 3.5% down payment, you can go FHA and secure a 30 year fixed rate mortgage with some lenders with a 580 credit score. Even though FHA on paper says they will go down to 500 credit score with at least 10% down payment, you will find it hard to get the loan approved because lenders will create overlays to protect their interest and maintain a good standing with FHA and HUD.
Another popular no money down loan is VA. Most VA lenders will want a 620 middle credit score but like FHA, VA on paper says they will go down to a 500 score, but good luck finding a lender for that scenario.
A lot of times if your scores are in the high 500’s or low 600’s range, we can do a rapid rescore and get your scores improved within 30 days.
∘ Does it costs anything to get pre-approved for a mortgage loan?
Answer: Most lenders will not charge you a fee to get pre-approved, but some lenders may want you to pay for the credit report fee upfront. Typically costs for a tri-merge credit report for a single borrower runs about $50 or less. Maybe higher if more borrowers are included on the loan application.
∘ How long does it take to get approved for a mortgage loan in Kentucky?
Answer: Typically if you have all your income and asset documents together and submit to the lender, they typically can get you a pre-approval through the Automated Underwriting Systems within 24 hours. They will review credit, income and assets and run it through the different AUS (Automated Underwriting Systems) for the template for your loan pre-approval. Fannie Mae uses DU, or Desktop Underwriting, FHA and VA also use DU, and USDA uses a automated system called GUS. GUS stands for the Guaranteed Underwriting System.
If you get an Automated Approval, loan officers will use this for your pre-approval. If you have a bad credit history, high debt to income ratios, or lack of down payment, the AUS will sometimes refer the loan to a manual underwrite, which could result in a longer turn time for your loan pre-approval answer
∘ Are there any special programs in Kentucky that help with down payment or no money down loans for KY First Time Home Buyers?
Answer: There are some programs available to KY First Time Home Buyers that offer zero down financing: KHC, USDA, VA, Fannie Mae Home Possible and HomePath, HUD $100 down and City Grants are all available to Kentucky First Time Home buyers if you qualify for them. Ask your loan officer about these programs
∘ When can I lock in my interest rate to protect it from going up when I buy my first home?
Answer:You typically can lock in your mortgage rate and protect it from going up once you have a home picked-out and under contract. You can usually lock in your mortgage rate for free for 90 days, and if you need more time, you can extend the lock in rate for a fee to the lender in case the home buying process is taking a longer time. The longer the term you lock the rate in the future, the higher the costs because the lender is taking a risk on rates in the future.
Interest rates are kinda like gas prices, they change daily, and the general trend is that they have been going up since the Presidential election in November 2016.
∘ How much money do I need to pay to close the loan?
Answer:Depending on which loan program you choose, the outlay to close the loan can vary. Typically you will need to budget for the following to buy a home: Good faith deposit, usually less than $500 which holds the home for you while you close the loan. You get this back at closing; Appraisal fee is required to be paid to lender before closing. Typical costs run around $400-$450 for an appraisal fee; home inspection fees. Even though the lender’s programs don’t require a home inspection, a lot of buyers do get one done. The costs for a home inspection runs around $300-$400. Lastly, termite report. They are very cheap, usually $50 or less, and VA requires one on their loan programs. FHA, KHC, USDAS, Fannie Mae does not require a termite report, but most borrowers get one done.
There are also lender costs for title insurance, title exam, closing fee, and underwriting fees that will be incurred at closing too. You can negotiated the seller to pay for these fees in the contract, or sometimes the lender can pay for this with a lender credit.
The lender has to issue a breakdown of the fees you will incur on your loan pre-approval.
How long is my pre-approval good for on a Kentucky Mortgage Loan?
Answer:Most lenders will honor your loan pre-approval for 60 days. After that, they will have to re-run your credit report and ask for updated pay stubs, bank statements, to make sure your credit quality and income and assets has not changed from the initial loan pre-approval.
How much money do I have to make to qualify for a mortgage loan in Kentucky?
Answer:The general rule for most FHA, VA, KHC, USDA and Fannie MAe loans is that we run your loan application through the Automated Underwriting systems, and it will tell us your max loan qualifying ratios.
There are two ratios that matter when you qualify for a mortgage loan. The front-end ratio, is the new house payment divided by your gross monthly income. The back-end ratio, is the new house payment added to your current monthly bills on the credit report, to include child support obligations and 401k loans.
Car insurance, cell phone bills, utilities bills does not factor into your qualifying rations.
If the loan gets a refer on the initial desktop underwriting findings, then most programs will default to a front end ratio of 31% and a back-end ratio of 43% for most government agency loans that get a refer. You then take the lowest payment to qualify based on the front-end and back-end ratio.
So for example, let’s say you make $3000 a month and you have $400 in monthly bills you pay on the credit report. What would be your maximum qualifying house payment for a new loan?
Take the $3000 x .43%= $1290 maximum back-end ratio house payment. So take the $1290-$400= $890 max house payment you qualify for on the back-end ratio.
Then take the $3000 x .31%=$930 maximum qualifying house payment on front-end ratio.
So now your know! The max house payment you would qualify would be the $890, because it is the lowest payment of the two ratios.
These 10 mortgage facts will give you an advantage when shopping for a home or refinancing an existing loan.
1. Mortgage Rates Change
Just like the stock market, mortgage rates change throughout the day. Mortgage rates you see today may not be available tomorrow. If you are in the market for a mortgage loan, be sure to check the current rates being offered by lenders. If you have already done your research and have found your dream home consider locking in your rate as soon as possible.
2. Different Lenders Charge Different Fees
Don’t expect every lender to charge the same fees for a mortgage loan. Every lender structures their fees differently, which is why it is important to shop with at least 3 lenders to compare. Next time you apply for a mortgage loan pay attention to the rates, points being charged and closing costs.
3. Lenders Can Sell Your Loan to Another Bank
Many borrowers have experience getting a mortgage loan with a certain lender only to find out that the loan has been sold to another bank. This occurs because lenders need to free up their liabilities in order to make room to give out more loans. This does not affect your mortgage whatsoever, but it’s important to pay close attention to your mortgage statement and any correspondence you receive in the mail to make sure you do not make payments to the wrong bank.
4. Your Middle Credit Score Matters
When you apply for a mortgage loan, the lender will pull your credit scores from three credit bureaus (Transunion, Equifax and Experian) to help them determined if you are credit worthy. Your middle score of the three is what lenders will use for loan qualification. However, the underwriter will review all three scores as part of the loan underwriting process. If you pull your own credit score through a website online, the credit scores displayed to you may be different than what lenders use because they use different reporting systems.
5. You Can Refinance Your Home Loan Anytime
You can refinance your mortgage anytime, but it doesn’t necessarily mean you should. Think about why you want to refinance. Is because you want to lower your monthly payments, to change the type of loan you are in or to take cash out from your equity? Whatever the reason is, make sure that it makes financial sense.
6. You Can Get a Mortgage Loan After a Foreclosure
Many homeowners have experienced a foreclosure after the recent mortgage crisis. There is good news for these borrowers because they can get a mortgage loan after foreclosure. There are waiting periods involved, for example, to apply for an FHA loan you must wait three years after foreclosure to apply. If you want to get a conventional loan the waiting period is seven years from foreclosure. For those seeking a VA loan, the waiting period is two-years.
There are exceptions to the waiting periods, but you have to show the lender that your foreclosure was caused by an event outside your control, such as losing your job or being seriously ill.
8. Good Credit Allows you to Get Better Mortgage Rates
Good credit scores mean a better rate in any type of loan, especially a mortgage loan. Your credit heavily impacts the type mortgage loan you will qualify for. To maintain a good credit report, make sure you monitored it closely. One of the advantages to good credit is that more banks will want to compete for your business, therefore giving you leverage to negotiate the closing costs.
9. Know Your Annual Percentage Rate (APR)
Knowing your APR will allow you see the true cost of your loan. While the interest rate shows the annual cost of your loan, the APR includes other fees such as origination points, admin fees, loan processing fees, underwriting fees, documentation fees, private mortgage insurance and escrow fees.
There may be more or less fees included in the ARP from what we mentioned. To be sure what fees are included in the APR, ask your lender to give you a breakdown of the closing costs included.
10. You Can Always Reduce Closing Costs
One way to reduce closing costs is to have the sellers contribute towards the closing costs when purchasing your home. This can be negotiated between the buyer and the sellers in the purchase contract. The amount the seller can contribute will depend on the type of loan. Another way to save on closing costs is to have the lender give you a credit to cover out of pocket loan costs.
What income can be used for a Mortgage Loan Approval in Kentucky?
Income is one of the most important variables a lender will examine because it is used to repay the loan. Income is reviewed for the type of work, length of employment, educational training required, and opportunity for advancement. An underwriter will look at the source of income and the likelihood of its continuance to arrive at a gross monthly figure.
Salary and Hourly Wages - Calculated on a gross monthly basis, prior to income tax deductions.
Part-time and Second Job Income - Not usually considered unless it is in place for 12 to 24 straight months. Lenders view part-time income as a strong compensating factor.
Commission, Bonus and Overtime Income - Can only be used if received for two previous years. Further, an employer must verify that it is likely to continue. A 24-month average figure is used.
Retirement and Social Security Income - Must continue for at least three years into the future to be considered. If it is tax free, it can be grossed up to an equivalent gross monthly figure. Multiply the net amount by 1.20%. Alimony and Child Support Income - Must be received for the 12 previous months and continue for the next 36 months. Lenders will require a divorce decree and a court printout to verify on-time payments.
Notes Receivable, Interest, Dividend and Trust Income - Proof of receiving funds for 12 previous months is required. Documentation showing income due for 3 more years is also necessary.Rental Income - Cannot come from a Primary Residence roommate. The only acceptable source is from an investment property. A lender will use 75% of the monthly rent and subtract ownership expenses. The Schedule E of a tax return is used to verify the figures. If a home rented recently, a copy of a current month-to-month lease is acceptable. Automobile Allowance and Expense Account Reimbursements - Verified with 2 years tax returns and reduced by actual expenses listed on the income tax return Schedule C.
Education Expense Reimbursements - Not considered income. Only viewed as slight compensating factor. Self Employment Income - Lenders are very careful in reviewing self-employed borrowers. Two years minimum ownership is necessary because two years is considered a representative sample. Lenders use a 2-year average monthly income figure from the Adjusted Gross Income on the tax returns. A lender may also add back additional income for depreciation and one-time capital expenses. Self-employed borrowers often have difficulty qualifying for a mortgage due to large expense write offs. A good solution to this challenge used to be the No Income Verification Loan, but there are very few of these available any more given the tightened lending standards in the current economy. NIV loan programs can be studied in the Mortgage Program section of the library.
😃👍
Customer Testimonials
We just moved here the first of January in 2017 from Ohio to the Louisville, KY area and we found Joel's website online. He was quick to respond to us and got back the same day on our loan approval. He was very knowledgeable about the local market and kept us up-to date throughout the loan process and was a pleasure to meet at closing. Would recommend his services.
Angela Forsythe
"We were searching online for mortgage companies in Louisville, Ky locally to deal with and found Joel's website, and it was a godsend. He was great to work with, and delivered on everything he said he would do. I ended up referring my co-worker at UPS, and she was very pleased with his service and rates too. Would definitely vouch for him." September 2016
Monica Leinhardt
"We contacted Joel back in July 2011 to refinance our Mortgage and he was great to work with. We contacted several lenders locally and online, and most where taking almost 60 days to close a refinance, Joel got it done in 23 days start to finish,I would definetly recommmend him. He got us 3.75% with just $900 in closing costs on our FHA Streamline loan.
Kayle Griffin
“Joel is one of the best Mortgage Brokers I have ever worked with in my sixteen years in the real estate and mortgage business.” May 25, 2010
Tim Beck
“Joel has always worked very hard to keep his word and to work out seasonable solutions to difficult problems. He is truly an expert in FHA and other type loans.” September 1, 2010
Nancy Nalley
“I have worked with Joel since 1998. He is a great loan professional.” I refer most of my Louisville, Kentucky area home buyers to him and he always take special care of them. August 23, 2012
Jon ClarK
“Joel Lobb is a real professional in the lending industry, with many years of experience, he is the one to go to for any mortgage lending needs.” August 22, 2011
RICHARD VOLZ , Residential Sales , Remax Foursquare Realty
“When looking to purchase our new home in 2006, I had the pleasure of meeting Joel Lobb. Not only was he personable and easy to reach, he was extremely knowledgable in his field and made sure to find us the best rate and a top notch mortgage company. We were able to complete the process in less than 3 weeks with his expertise. I find Joel to have the utmost high integrity and I recommend him to anyone who say's they are need of mortgage assistance. He is also fantastic and keeping everyone up to date on the latest in the housing industry through his twitter posts. He provided great results for our family and we still communicate to this day!” August 21, 2010 Stacie Drake
"We first use Joel on our new home purchase in 2007 in St Matthews, Kentucky area and he was great to work with. We have since refinanced our home with him in 2010 when rates got really low and he has always delivered on what he says. I could not imagine using anyone else."
Melody Glasscock March 2014
Absolutely Amazing!! I emailed Joel after I had just got a denial from a bank and just thought i would try to get some advice on what my next steps would be to get a house. I honestly didn't expect to even get a reply because my credit is not great. That was about a week and a half ago. I just signed a contract on a house last night. ONLY because of Joel Lobb. He even worked with us throughout the weekend, which shocked me. Best decision I have ever made. THANK YOU SO MUCH FOR WORKING WITH US THROUGHOUT THE ENTIRE PROCESS.
Cee Bellisle August 2018
😃
Contacted him about buying a home and he was great to work with. I was moving to Louisville Ky to take a new job and he walked me through the entire process. He explained to me all the different options for FHA, VA, USDA mortgage loans and credit score requirements versus Fannie Mae. Since I was a first time home buyer I needed alot of help and guidance. I would definitely recommend him. Fast to respond and available to answer questions that I or my realtor had after hours. Anderson Johnson April, 2018
We moved from Michigan to Northern Kentucky area and we were really impressed. We got a USDA loan no money down and closed in less than 3.5 weeks. We shopped around online with other lenders but Joel was always first to respond and his rates were just a little better than other lenders. He kept us informed through the process along with our realtor and there was absolutely no surprises like we heard from other co-workers and friends that they experienced in their loan process. We have already referred another co-worker to Joel . He's AWESOME!
Patty Kingston July 2018
😍
betty parsons
Wow, what a great loan officer. I was referred to him by our agent and he was great to work with. We used him for a USDA no money down loan in Shelby County and we were really impressed. We were afraid we could not buy a home since we did not have money saved for a down payment, but Joe l was able to get us a zero down loan and we even got our appraisal fee and good faith deposit back at closing. We actually got money back at closing!!! I Can't think him enough. Our family moved from our apartment in the south end of town to get our own home with 5 acres for our kids and 2 dogs, at a payment that is equal to our rent payment also. .Thanks Again Joel. May god bless you
Patty Locker
We contacted Joel about buying a house on our move from Ohio for my husband's job transfer with Ford. We put a lot of trust in him since we were new to the area and first time home buyers in the Louisville KY market, and he always delivered on what he said. It took us a while to find a home due to the lack of homes, but once we got one, he was always quick to respond our questions via text or email ,and kept us informed through the process. We got to meet him at the closing and he was super nice and even got us a closing gift for our home which we didn't expect at all. Super nice guy 😀!!! I would definitely recommend him for a local Home loan in the Louisville area.
Like
pam dolby
I got a VA loan with Joel and he was great. He is an ex-army guy so he could relate to my past experiences of being a veteran and moving around the country a lot. I had some credit issues that required a little extra work but Joel was able to find A VA lender to approve my situation as far as having past bad credit problems and a lower credit score. We closed yesterday on our home here in Louisville and we could not be happier. We finally have a home of our own thanks to Joel . I would definitely recommend him for a mortgage loan. Great experience and closed 8 days before expected close date so we were able to move in early.
I contacted Joel about the $10,000 KY Housing Grant last month and we were able to get it and I just closed on my home. He was great to work with and if you are a first time home buyer here in Louisville, I would definitely contact him. I met him at his office and he was very nice and knowledgeable and kept me informed through the process. No surprises either so I was very happy. I am new homeowner thanks to Joel .
I can answer your questions and usually get you pre-approved the same day. Call or Text me at 502-905-3708 with your mortgage questions. Email Kentuckyloan@gmail.com
Mortgage Application Checklist of Documents Needed below
Standard Documentation for All Borrowers
W-2 forms (previous 2 years)
Paycheck stubs (last 30 days - most current)
Employer name and address (2 year history including any gaps)
Bank accounts statement (recent 2 months – all pages
Statements for 401(k)s, stocks and other investments (most recent)
federal tax returns (previous 2 years)
Residency history (2 year history)
Photo identification for applicant and co-applicant (valid Driver’s License
Additional Required Documentation (if applicable)
Divorced Borrowers
Divorce Decree
Self-Employed Borrowers
Copies of most recent 2 years corporate tax returns (with all schedules)
YTD profit and loss statement and balance sheet
Copy of business license or CPA contact information
1099s or K1 forms
Eligible Active Military or Veterans
Veteran DD214 or Veteran Reservists DD256
Certificate of Eligibility
Previous Bankruptcy
Petition and Discharge
Supporting schedules A through K
*Additional items may be requested during the loan underwriting phase if more information is required to guarantee your loan.
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people. , NMLS ID# 57916, (www.nmlsconsumeraccess.org). I lend in the following states: Kentucky
