Showing posts with label Kentucky VA Home Loans. Show all posts
Showing posts with label Kentucky VA Home Loans. Show all posts

What is the minimum Credit Score Needed to Buy a House and get a Kentucky Mortgage Loan?

Credit Score Needed to Buy a House and get a Kentucky Mortgage?

Conventional Loan


• At least 3%-5% down• 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.
Kentucky USDA Rural Housing Program

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 a 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 109,500 for a family of four, and up to $136,000 for a family of five or more.

The income limits change every spring, so make sure and check to see what updated income limits are.
USDA requires 3 years removed from bankruptcy and foreclosure
There is no max USDA loan limit.
 

Kentucky FHA Loan


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 kind of steep when compared to USDA, VA, but the rates are usually good so it can counteract 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. 
 

Kentucky VA Loan


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 no max loan limits in Kentucky
 
Most VA lenders I work with will want a 580-credit score, even though VA says in their guidelines there is no minimum score, good luck finding a lender
VA requires 2 years removed from bankruptcy or foreclosure
Clear Caviars needed to for a VA loan.
 

Kentucky Down Payment Assistance


This type of loan is administered by KHC in the state of Kentucky. They typically have $10,000 down payment assistance year around, that is in the form of a second mortgage that you pay back over 10 years.



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 is set at 40% and 50% respectively.

What is the minimum Credit Score Needed to Buy a House and get a Kentucky Mortgage Loan?










Joel Lobb (NMLS#57916)
Senior Loan Officer
Text/call 502-905-3708

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3

Louisville, KY 40223
Company ID #1364 | MB73346


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/




What is the minimum Credit Score Needed to Buy a House and get a Kentucky Mortgage Loan?

What are the requirements to buy a house in Kentucky in 2023?


Credit Score and Income Requirements to Buy a Home in Kentucky in 2023




Credit Score and Income Requirements to Buy a Home in Kentucky in 2023

KENTUCKY CONVENTIONAL

Get your fixed interest rates for eligible buyers.620 minimum credit score
3% down payment 
4-7 years removed from Bankruptcy Depending of if Chapter 7 or 13 
Max Loan is $647,200  in Kentucky
2 Year work history but does not have to be same job



Credit Score and Income Requirements to Buy a Home in Kentucky in 2023

KENTUCKY FHA MORTGAGES

Government-backed loans with flexible guidelines.
500 minimum credit score with 10% down payment
3.5% down payment with 580 credit score
2 years removed from bankruptcy
Can be combined with down payment grants for $0 down payment
Max loan for FHA in Kentucky is $420,680
2 year work history with no gaps over 6 months


Credit Score and Income Requirements to Buy a Home in Kentucky in 2023

KENTUCKY USDA MORTGAGES

Government-backed loans with flexible guidelines.
Zero Down Payment
No Minimum Credit Score, 640 is preferred with most USDA Kentucky Lenders
3 years removed from Bankruptcy
Max Income and Property Map Eligibility Requirements
2 year work history with no gaps over 60 days



Credit Score and Income Requirements to Buy a Home in Kentucky in 2023

KENTUCKY VA MORTGAGES

Government-backed loans for those who’ve served our nation.
Zero Down Payment Loan
No minimum credit score, 580 and higher is preferred with most VA lenders in KY with some wanting a 620
2 years removed from bankruptcy
Active Duty --like to see a least a year left in service or 6 months reserves and a job relatable


Have Questions or Need Expert Advice? Text, email, or call me below:





Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916


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/

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 approvalnor 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).


Kentucky VA Home Loan Mortgage Lender: Understanding Your Kentucky VA Home Loan Benefits

Louisville Kentucky VA Home Loan Mortgage Lender: Understanding Your Kentucky VA Home Loan Benefits


Kentucky VA Home Loan Mortgage Lender:


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Is your credit score high enough for a  Kentucky VA Home Loan Approval?

Usually, 620 or Higher is better for 2 reasons lower rate and less
stipulations from the underwriter

Do you have sufficient credit depth for a Kentucky VA Home Loan Approval?

Generally, all on-time payments in the last 12 months. They like to see two-three paid on time  for the last 12 months


Do you make enough money to cover all your debts, including the new
Kentucky VA mortgage?

Debts divided by your gross monthly income is lower than 50%. I have
seen many exceptions to this with compensating factors. I have seen as high as 78% debt ratio get approved through the AUS if you have high credit scores (720 or higher, good residual income, a lot of assets, ie money in the bank, retirement, etc.

-Do you have a high probability of continuing to make that same income?

Two years of stable job history is the best. If you were off work sometimes a good letter of explanation will suffice for a job gap. i.e. hurt, medical, etc.


What is a credit score required for a Kentucky VA Home Loan? 

There is no minimum credit score in the VA guidelines.
But, the lender may have a minimum score. It is called credit "overlays".
Most Kentucky VA Home lenders will require a 620 middle credit score.
You have three fico scores from Experian, Equifax, and Transunion.
They will use the middle score of the three. For example, if you have a 675,689,619,
your qualifying fico score to be used would be 675. you can possibly get a VA home
loan approval with a lower score, but you will
have to provide a lot of other information to get that approval

.
 What does Debt to income mean for a Kentucky VA Home Loan Approval?

Your ratio of total monthly debt payments on the credit report divided by your gross
monthly income. They do not include, utilities, car insurance, cell phone bills,
only credit reporting items. Typically on a VA home loan, they like to see that number around 43% on the back-end ratio for loan approval. You can go above this with high credit scores, good residual income, assets in the bank, etc. Conversely, if you have a low fico score, no money in the bank, going up in house payment from your current housing payment, or low va residual income. then you will need to be under this.






Louisville Kentucky VA Home Loan Mortgage Lender: How to Get Approved for a Kentucky VA Home Mortgag...

Louisville Kentucky VA Home Loan Mortgage Lender: How to Get Approved for a Kentucky VA Home Mortgag...: Basic Understanding of a Kentucky VA Mortgage Loan Approval Process. The VA makes a guarantee to the lending institution (the insurance)-for...


Basic Understanding of a Kentucky VA Mortgage Loan Approval Process.

The VA makes a guarantee to the lending institution (the

insurance)-for 25% of the loan amount (from a lenders

perspective the effective LTV is 75%).

Because the risk to the bank is reduced, the bank can provide

more affordable loans to the Veteran:

• Eliminating the need for a down payment (100% Mortgage)

• Provides the Veterans favorable interest rates

• Eliminating Mortgage Insurance (NO PMI)

Crushing the Myths of the VA Loan

• VA Mortgage Benefits do not expire.

• You can use your VA benefits as many times as you wish.

• You can have more than 1 at a time. (See occupancy rules)

• There is no limit to the size of a VA loan. (There is a county

loan limit, but veterans can purchase above the county loan

limit with a 25% down payment)

• Credit and risk is reviewed differently by each bank

and lender.

• Even with a foreclosure or short sale, the veteran may still be

able to buy a house with a VA loan. (See burnt entitlement,

veteran might have reduced buying power, but can still

use the VA loan). The VA understands that bad things can

happen to good people.

• VA Appraisals are significantly different than they use to be.


What military documents would I need
to have in order to get a VA mortgage?

I don’t know if I still have my documents from when I

served. How can I retrieve them?

There are three websites that should be able to help you, they are:

vetrecs.archives.gov

archives.gov/veterans/military-service-records/

ebenefits.va.gov

*If you have difficulty retrieving information from any of these sites,

the local recruiting office for your branch would be able to assist.

I have my discharge paperwork, but would like help

obtaining my Certificate of Eligibility

Contact your lender.

I served, but it was a very long time ago. Do my VA
benefits for a mortgage expire?

No, VA Home Loan benefits never expire. You can use your

VA benefit as long as you’re alive.

I used my VA mortgage along time ago to buy a
home. That means I can’t use it again, right?

The VA Mortgage can be used several times over. If the previous

home was sold, your entitlement should be fully reinstated.

What is the minimum credit score to obtain
a VA mortgage?

The VA does not have a minimum credit score, but lenders will

have their own internal overlay. If your score is greater than 580,

you are likely a candidate for the VA mortgage.


Can I use the VA loan to buy a condo?

You can, with the same terms as buying a detached single family

residence. However, we do have to see if the condo association

is VA approved. Check this website:

vip.vba.va.gov/portal/VBAH/VBAHome/condopudsearch

I relocated here and have a home in my hometown. I

kept the home and it has a VA mortgage on it now.

Can I get another VA mortgage?

You can get another VA Mortgage. Mortgage

will calculate your remaining entitlement to compute your

maximum loan amount with no money down and/or what

you would have to put down if you exceed the remaining

entitlement.

Can I build a home with a VA Home Loan?

Yes, but there are several clauses that may make this difficult

to accomplish. Many veterans use their VA Home Loan

Certificate of Eligibility to negotiate in good faith a private home

construction loan and then refinance the completed home using

VA Home Loans.

I heard the VA Mortgage was more expensive than
other mortgage types. Is that true?

There is a mandatory funding fee on all VA mortgages (unless

the borrowing veteran is receiving a VA related disability, then

the funding fee is waived). The funding fee is built over and

above the loan amount and the fees are as below.



It's Military May, and that means Permanent Change of Station (PCS) season for military families is upon us. However, some brokers will miss out on opportunities to help more Veterans due to a few commonly held misconceptions regarding Kentucky VA loans.

Separating fact from fiction can make all the difference this season for your business. Here are a few myths around Kentucky VA loans:

Myth: Kentucky VA Loans Are Credit Risks

Reality: Kentucky Veterans and military members tend to have higher credit scores and savings.

Myth: The Seller Pays the Closing Costs

Reality: In a well-structured Kentucky  VA loan, the benefits include no down payment and ideally no closing costs to the seller.

Myth: There Is a Maximum VA Loan Amount  

Reality: There has never been a maximum Kentucky  VA loan amount, though it's often confused with maximum VA loan guarantee.

Myth: VA Loans Are Complicated With Many Restrictions

Reality: The expertise of our Kentucky VA lending team makes the process simple so you can focus on your borrower.



Basic Understanding of a Kentucky VA Mortgage Loan Approval Process. The VA makes a guarantee to the lending institution (the  insurance)-for 25% of the loan amount (from a lenders  perspective the effective LTV is 75%).  Because the risk to the bank is reduced, the bank can provide  more affordable loans to the Veteran:  • Eliminating the need for a down payment (100% Mortgage)  • Provides the Veterans favorable interest rates  • Eliminating Mortgage Insurance (NO PMI)  Crushing the Myths of the VA Loan • VA Mortgage Benefits do not expire.  • You can use your VA benefits as many times as you wish.  • You can have more than 1 at a time. (See occupancy rules)  • There is no limit to the size of a VA loan. (There is a county  loan limit, but veterans can purchase above the county loan  limit with a 25% down payment)  • Credit and risk is reviewed differently by each bank  and lender.  • Even with a foreclosure or short sale, the veteran may still be  able to buy a house with a VA loan. (See burnt entitlement,  veteran might have reduced buying power, but can still  use the VA loan). The VA understands that bad things can  happen to good people.  • VA Appraisals are significantly different than they use to be.    What military documents would I need to have in order to get a VA mortgage? I don’t know if I still have my documents from when I  served. How can I retrieve them? There are three websites that should be able to help you, they are:  vetrecs.archives.gov  archives.gov/veterans/military-service-records/  ebenefits.va.gov  *If you have difficulty retrieving information from any of these sites,  the local recruiting office for your branch would be able to assist.  I have my discharge paperwork, but would like help  obtaining my Certificate of Eligibility  Contact your lender.  I served, but it was a very long time ago. Do my VA benefits for a mortgage expire? No, VA Home Loan benefits never expire. You can use your  VA benefit as long as you’re alive.  I used my VA mortgage along time ago to buy a home. That means I can’t use it again, right? The VA Mortgage can be used several times over. If the previous  home was sold, your entitlement should be fully reinstated.  What is the minimum credit score to obtain a VA mortgage? The VA does not have a minimum credit score, but lenders will  have their own internal overlay. If your score is greater than 580,  you are likely a candidate for the VA mortgage.    Can I use the VA loan to buy a condo? You can, with the same terms as buying a detached single family  residence. However, we do have to see if the condo association  is VA approved. Check this website:  vip.vba.va.gov/portal/VBAH/VBAHome/condopudsearch  I relocated here and have a home in my hometown. I  kept the home and it has a VA mortgage on it now.  Can I get another VA mortgage? You can get another VA Mortgage. Mortgage  will calculate your remaining entitlement to compute your  maximum loan amount with no money down and/or what  you would have to put down if you exceed the remaining  entitlement.  Can I build a home with a VA Home Loan? Yes, but there are several clauses that may make this difficult  to accomplish. Many veterans use their VA Home Loan  Certificate of Eligibility to negotiate in good faith a private home  construction loan and then refinance the completed home using  VA Home Loans.  I heard the VA Mortgage was more expensive than other mortgage types. Is that true? There is a mandatory funding fee on all VA mortgages (unless  the borrowing veteran is receiving a VA related disability, then  the funding fee is waived). The funding fee is built over and  above the loan amount and the fees are as below.      It's Military May, and that means Permanent Change of Station (PCS) season for military families is upon us. However, some brokers will miss out on opportunities to help more Veterans due to a few commonly held misconceptions regarding Kentucky VA loans.  Separating fact from fiction can make all the difference this season for your business. Here are a few myths around Kentucky VA loans:  Myth: Kentucky VA Loans Are Credit Risks  Reality: Kentucky Veterans and military members tend to have higher credit scores and savings.  Myth: The Seller Pays the Closing Costs  Reality: In a well-structured Kentucky  VA loan, the benefits include no down payment and ideally no closing costs to the seller.  Myth: There Is a Maximum VA Loan Amount    Reality: There has never been a maximum Kentucky  VA loan amount, though it's often confused with maximum VA loan guarantee.  Myth: VA Loans Are Complicated With Many Restrictions  Reality: The expertise of our Kentucky VA lending team makes the process simple so you can focus on your borrower.


Kentucky First Time Home Buyer Programs to Consider for 2022 Kentucky Homebuyers.

First Time Home Buyer Programs to Consider for 2022 Kentucky Homebuyers.



First Time Home Buyer Programs to Consider for 2022 Kentucky Homebuyers.





Zero Down Mortgage Loans in Kentucky

The Kentucky VA and the Kentucky USDA Home Loan Program both offer a zero down loan program for individuals and/or properties that meet their criteria.

If you need down payment assistance, KHC offers up to $7,500 for assistance to buy your Kentucky home if you are lacking the down payment requirements for FHA or Fannie Mae below.


Three Percent Down Mortgage Loans in Kentucky

Fannie Mae/Freddie Mac conventional loans are available with down payments as low as 3% on single-family homes, including eligible condos, co-ops, and some manufactured homes. Fixed-rate mortgages with up to 30-year terms and ARMs are available.

Three and 1/2 Percent Down Mortgage Loans in Kentucky

The Federal Housing Administration (or FHA) loan program can allow as little as 3.5% down, and it is more lenient than most other programs on minimum credit scores and other factors. he FHA loan program allows as little as 3.5% down, and it is more lenient than most other programs on minimum credit scores.
Are you surprised at how low you may be able to go? While many believe a 20% down payment is required, you can see now that it’s far from the only option.
Whether you’ve saved a little or a lot, reach out today, and we’ll work on finding a loan that works for you.
  • Kentucky Federal Housing Administration (FHA) loans: “With a 3.5% down payment, Kentucky homebuyers may be able to get an FHA loan with a 580 credit score or higher. If you can manage a 10% down payment, though, that minimum goes as low as 500.”
  • Kentucky Conventional loans: “The most popular loan type typically comes with a 620 minimum credit score.”
  • US. Department of Agriculture (USDA) loans: “In general, lenders require a minimum credit score of 620-640 for a USDA loan, though some may go as low as 580.”
  • US. Department of Veterans Affairs (VA) loans: VA loans don’t technically have a minimum credit score, but lenders will typically require between 580 and 620.”

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Joel Lobb (NMLS#57916)
Senior  Loan Officer
 
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
 


Text/call 502-905-3708
kentuckyloan@gmail.com

I

Kentucky VA Home Loan Requirements for Approval



Minimum credit score


Qualifying for Veteran Home Loans

The Veteran Loan program is designed for veterans who meet the minimum number of days of completed service. Some of the other eligibility requirement for the VA loan program[5] and some specific home loan benefits include the length of service or service commitment, duty status and character of service. The program does allow for benefits to Surviving Spouses.
The VA does not have a minimum credit score used for pre-qualifying for a mortgage loan, however, most Lenders require a minimum credit score of at least 620.[6]

A Veteran who has used their entitlement to previously purchase a home, may have entitlement left to purchase another one. If you previously purchased a home using your VA Benefits then you might still have some of that “Entitlement” available to you for the purchase a new home. To Calculate Maximum Entitlement available, consider the following:
  1. If your previous home was purchased using a VA Loan, and that loan was paid off by the new owners, the full entitlement may have been restored.
  2. If you sold your home to someone, and allowed them to assume your VA Loan, then you might have the full entitlement restored, if one or more of the purchasers were also Veterans.
  3. If you still own the home, and you are renting it out – you might be able to purchase a new home using your partial entitlement, but there are several restrictions.
Allowable Income Sources used to qualify for a VA Loan include: Retirement Income, Social Security Income, Child Support, Alimony and Separate Maintenance, BAH, BAS and Disability Income. Dependency and Indemnity Compensation (DIC) for a Surviving Spouse can also be included. In addition, stable, documented income from employers remains the best income source for VA loans.

Requirements


VA Loan application

The VA loan application is a standardized loan application form 1003 issued by Fannie Mae also known as Freddie Mac Form 65. It is a Federal crime punishable by fine or imprisonment, or both, to knowingly make any false statements on a VA loan application under the provisions of Title 18, United States Code, Section 1001, et seq.
You will need the following paperwork to apply:
  • Copies of your W2 statements for the past two years, so your gross household income can be confirmed,
  • Copies of your previous two pay stubs,
  • Documentation of other assets (checking accounts, savings accounts, financial investments, trust funds, etc.),
  • If self-employed, two years of consecutive tax returns will be required.
  • The Veteran also needs to supply their DD 214 and Certificate of Eligibility (COE)


On June 25, 2019, the Blue Water Navy Vietnam Veterans Act of 2019 was signed into law temporarily increasing the VA funding fee for active duty service members and veterans starting January 1, 2020. The law removed VA county loan limits for homebuyers with full VA loan entitlement and made Purple Heart recipients exempt from paying the VA funding fee.[3] Several members of Congress were displeased after the passing of the act, writing an open letter to House Speaker Nancy Pelosi and Minority Leader Kevin McCarthy asking that future bills not be paid for by increasing VA loan fees.[4]

Funding fees

A funding fee must be paid to VA unless the veteran is exempt from such a fee because he or she receives a minimum of 10% VA disability compensation. If a veteran is awarded disability compensation after paying a funding fee, he/she can apply for a refund of this funding fee, so long as the beginning date of the disability is prior to the closing date of the home mortgage.
In August 2012, Congress passed a bill that allows a Veteran to receive the benefits of having Veteran Disability while it is still pending. The amount paid for the funding fee can be refunded back to the Veteran when a determination is made and the paperwork is received.
The VA Funding fee may be paid in cash or included in the loan amount. Closing costs such as VA appraisal, credit report, loan processing fee, title search, title insurance, recording fees, transfer taxes, survey charges, or hazard insurance may not be included in the loan. However, the seller may pay these on behalf of the VA borrower.

Purchase and construction loans

Due to the Blue Water Navy Vietnam Veterans Act of 2019, the VA funding fee is equalized for all branches of service starting January 1, 2020. For active duty military members and veterans, this means an increase in VA funding fee costs for a period of 2 years. If you have a service-connected disability that you are compensated for by the VA or if you are a surviving spouse of veteran who died in service or from service-connected disabilities, the funding fee is waived.
Type of VeteranDown PaymentFirst Time UseSubsequent Use
Regular Military, Reserves/National GuardNone
5%-9.99%
10% or more
2.3%
1.65%
1.4%
3.6%*
1.65%
1.4%
The VA funding fee can be financed directly into the maximum loan amount for the county in which the home is located. For subsequent use VA loans, if the sales price and the financed VA funding fee total more than maximum loan amount for that county, the borrower or seller must pay for the fee out of pocket. All VA loans require an impound account for property taxes and homeowners insurance which makes the monthly payment of VA loans calculated as a PITI payment.**

Cash-out refinancing loans

Type of VeteransPercentage for First Time UsePercentage for Subsequent Use
Regular Military, Reserves/National Guard2.3%3.6%*
  • The higher subsequent use fee does not apply to these types of loans if the veteran’s only
    prior use of entitlement was for a manufactured home loan.

Other types of loans

Type of LoanPercentage for Either Type of Veteran
Whether First Time or Subsequent Use
Interest Rate Reduction
Refinancing Loans
.50%
Manufactured Home Loans1.00%
Loan Assumptions.50%
  • Veterans who previously lived in a home they had to then rent out will typically qualify for a no appraisal Interest Rate Reduction Refinance. The Veteran's Administration also allows Veteran Homeowners to refinance from a Conventional loan to a VA mortgage Loan. This process, however, does require an appraisal.


0% DOWN PAYMENT
580 or Higher Credit Score with most lenders I work with even though VA does not have a minimum credit score. 
2.30% Upfront Mortgage Insurance Premium (First-Time Use)
Financed into Loan Amount
Will Vary Depending on Down Payment and Subsequent Use
No Mortgage Insurance Required
No  Maximum Loan Amount
Higher Loan Amounts Available with Down Payment
Great Option for Veterans or Active Military

Kentucky VA Loan Guidelines


VA Loan Credit Issues

VA will analyze a borrower’s past credit performance in determining the loan for approval. A borrower who has made timely payments for the last 12 months serves as a guide and demonstrates their willingness to repay future credit obligations. On the opposite side, a borrower who reflects continuous slow payments, judgments and delinquent accounts is not a good candidate for loan approval.
Below is a list of items concerning the borrower’s credit:
 

LATE MORTGAGE PAYMENTS


In circumstances not involving bankruptcy, satisfactory credit is generally considered to be reestablished after the veteran, or veteran and spouse, have made satisfactory payments for 12 months after the date of the last derogatory credit item(s).
When the underwriter analyzes the borrowers credit; it is the overall pattern of credit behavior that must be reviewed, rather than isolated cases of slow payments. A period of financial difficulty does not disqualify the borrower if a good payment pattern has been maintained since then.
Account balances reduced to judgment by a court must either be paid in full or subject to a repayment plan with a history of timely payments.
 

NO CREDIT HISTORY


In the area of credit, the lack of an established credit history should not be a deterrent to loan approval. As provided in the credit standards, a satisfactory payment history on items such as rent, utilities, phone bills, etc., may be used to establish a satisfactory credit history.
 

CHAPTER 7 BANKRUPTCY


The Kentucky VA guidelines state that a minimum of two years must elapse since the discharge date of the borrower and / or spouse’s Chapter 7 bankruptcy, not the filing date. A full explanation of the bankruptcy will be required. The borrower must also have re-established good credit, qualify financially and have good job stability.
 

CHAPTER 13 BANKRUPTCY


The Kentucky VA guidelines state that they will consider a borrower still paying on a Chapter 13 Bankruptcy if the payments to the court have been satisfactorily made and verified for a period of one year. In addition, the court trustee will need to give written approval to proceed. A full explanation of the bankruptcy will be required. The borrower must also have re-established good credit, qualify financially and have good job stability.
 

COLLECTIONS, JUDGEMENTS AND FEDERAL DEBTS


The Kentucky VA guidelines state that if a collection is minor in nature, it usually does not need to be paid off as a condition for loan approval. Judgments must be paid in full prior to closing. A borrower is not eligible for the loan if they are delinquent on any federal debt. This can include tax liens, student loans, etc. Payment arrangements that would bring the borrower up to date may be considered for loan approval.
 

FORECLOSURE


A borrower whose previous residence or other real property was foreclosed on or given a deed-in-lieu of foreclosure within the previous two years since the disposition date is generally not eligible for a VA insured mortgage. If the foreclosure was on a Kentucky VA loan, the applicant may not have full entitlement available for the new loan.
 


In order to verify your credit history, your lender will obtain a credit report containing 
information as reported by all 3 of the major credit bureaus: Trans Union, Equifax and Experian.

Most people will have 3 credit scores but it is possible that you may have only 1 or two scores if 
you have limited credit history.

This report will also include information on any public records such as bankruptcies,
judgments and tax liens.

Credit Scores


Though VA does not have a set minimum credit score requirements, lenders will have a minimum credit
score requirement.

Collection account may need to be paid off in order to close your loan
It is preferable that the most recent 12 months show satisfactory payments and no other derogatory 
information.
Credit History
If you experienced a major derogatory credit event, there will be waiting periods that will have to 
be observed before you can be eligible to qualify for a loan.

Bankruptcy Chapter 7
2 years from discharge date

Bankruptcy Chapter 13
Immediately after discharge or
After 12 months of payments***


Foreclosure*

2 years from completion date



* If the foreclosure or short sale was on a VA loan, you may not have full entitlement available 
for the new loan
*** Must obtain written permission from the bankruptcy court/trustee and provide proof of 
satisfactory payment history


Income and Employment

Minimum History of Employment

A minimum of 2 year history in the same industry/line of work is required in most instances but 
it’s not a universal rule.

Recent graduates can satisfy the two year requirement by providing proof of schooling with a degree 
for the line of work you are now
employed in.

Active duty members do not need a two year history as long as the minimum service requirement for 
eligibility has been met.

Self employed borrowers must always have a two year history of self employment and must show a two  year history of filed tax returns to meet the 24 month requirement.


Income Calculations

If you are salaried, your base income will be used to qualify you for the loan.
However, if you are an hourly employee with varied hours, more than likely, your income will be 
averaged over an extended period such as 18 or 24 months depending on the situation.
Overtime, bonuses, commission and part time employment must have a 24 history in order to be 
included in the qualifying income. 

The income will be averaged out over 24 months. Verification of 
likelihood to continue will also be required.

Non taxable income can be grossed up to account for the non-taxable status.
Retirement, Disability, alimony and child support income does not require a 2 year history but 
verification that it will continue for at least 3 years is required in order for it to be included.

ASSETS


No down payment does not mean no cash needed
VA does not require additional cash to cover a certain number or mortgage payments or unplanned 
expenses (cash reserves), however, your ability to accumulate liquid assets and the amount of 
assets currently available is taken into consideration in the overall credit worthiness analysis.
Allowable source of funds
Funds for your down payment, closing costs and other expenses can come from:
•    Checking/savings accounts
•    Investment accounts
•    Retirement account
Gift funds from a relative are an allowed source of funds to cover down payment and or closing 
costs.
The gift will need to be verified and paper trailed via bank statements and a gift letter will need 
to be signed
by your and the gift donor .

Funds from unsecured loans (signature loans, credit card advances) or funds that can not be 
documented are not acceptable source of funds.

Federal regulations require that all deposits into your account be documented.

In the instance of payroll deposits, nothing will need to be done if the deposit shows as a Direct 
Deposit from your employer.

All other deposits will need to be explained and documented.

A debt to income ratios

-A debt to income ratios is the percentage of your total debt obligation, including the new estimated
mortgage payment, all debts shown on your credit report, as well as alimony, child support etc, as
compared to your gross qualifying income.
EXAMPLE

The rule of thumb is that your debt to income ratio should not exceed 50% of the usable, gross monthly
income. However, higher percentages can be approved.
In addition to the debt to income ratio requirements, VA also has residual income requirements. VA residual
income looks at how much income is available after all monthly liabilities, including tax withholdings,
utilities and child care, are accounted for.

Residual Income By Region
For loan amounts of $80,000 and above
Family
Size

Northeast Midwest South West
1 $450 $441 $441 $491
2 $755 $738 $738 $823
3 $909 $889 $889 $990
4 $1025 $1033 $1033 $1117
5 $1062 $1039 $1039 $1158
over 5 Add $80 for each additional member up to a family of

seven
2400/5000= 48%

Deferred student loans
If student loan repayments are scheduled to
begin within 12 months of the date of loan
closing, the anticipated monthly payment will
be included.
If you are able to provide evidence that the
loan(s) will be deferred for a period outside
that time frame, the payment will not be
included.
Qualifying income: $5000
New mortgage payment: $2000
All other obligations: $400

Monthly debt payments
The payments shown on
your credit report will be
used to qualify you. If the
payments are incorrect,
you will be asked to
provide proof of the correct
payment.

Co-signed loans
If you co-signed for someone on a loan and
that loan is showing on your credit report, the
payment will be included in the ratios unless
you are able to provide evidence that the other
person on that loan has been making the
monthly payments from an account that you
are NOT a co-owner on.

Alimony/child support
You will be expected to
truthfully declare that
you pay alimony or child
support. You will be asked
to provide your divorce
decree and/or child support
order to verify the amounts.

Non-purchasing spouse
You should be aware that if you purchasing a home
in a community property state such as California
and are married, your spouse’s credit report will be
required. His/her debts will be included in the ratio
calculations even if he/she is not going to be on the
purchase or loan.

Home

Documentation Checklist
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




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Can you have 2 Kentucky VA Loans?

A Kentucky Veteran Can Have Multiple VA Loans

Did You Know
 A Kentucky Veteran Can Have Multiple VA Loans:
That’s right. VA will allow a Kentucky Veteran to have multiple Kentucky  VA loans provided they meet the required GNMA 25 percent guaranty. Are you unsure of how to calculate the maximum loan amount for a Veteran based on their used entitlement? I am Kentucky Veteran myself and have done over 50 VA loans for past customers in Kentucky. I am here to help with your Kentucky VA mortgage questions!
Click here and download an interactive, Kentucky Mortgage VA Entitlement and Loan Amount worksheet to help you determine their Kentucky VA Home loan maximum loan amount. This worksheet also works great to determine the maximum loan amount for a Veteran when they are buying a home over their county loan limit.




First let’s explain the difference between entitlement and maximum loan amount.
Each borrower using a VA Loan has a $36,000 entitlement that the VA guarantees to the lender in the unfortunate event that a borrower would default on the loan. The VA's formula dictates whether or not all that entitlement is used with the initial loan, and thus, additional entitlement can be available. And even if the entitlement is $0 after the purchase of the first house, then the Veteran or active duty member can still use their second-tier entitlement, but there will be a standard minimum and maximum loan limits on what the borrower can use to buy that second house.
Where does the $36,000 come from? This is 25% of 144,000, the "old" maximum loan amount for VA loans.
The VA now has County maximum loan limits as high as 768,750 in the DC Metro Area. With that loan amount, your 25% guarantee is 192,187.50 in entitlement.
"Second-Tier entitlement is nice because for those people using it, it means they don't have to sell their (first) property right off the bat when obtaining the second VA Loan. However, they still have to qualify for the VA Loan. While Second Tier Entitlement is not widely used because of its complexity and the fact that plenty of lenders are not well versed in calculating it, does not mean that interested borrowers should wave the white flag and look elsewhere for a different home loan.

An Example of calculating second-tier entitlement:
Veteran has used $104,250 of entitlement on a prior loan, which may not be restored because the loan is still active and is now a rental due to orders to transfer. The Veteran is now purchasing a home for $350,000 where the county loan limit is $768,750.
$768,750 (County Loan Limit) X 25% (your VA guaranty) = $192,187.50 Maximum Guaranty
$192,187.50 - $104,250 (entitlement already used for active VA loan) = $87,937.50 Entitlement Available
$87,937.50 X 4 = $351,750 Maximum Loan Amount with 25% Guaranty – Since the proposed purchased price is less than the max loan amount, no down payment would be required.
If the Veteran would like to purchase a home for 400,000 using the same numbers above, they would be required to bring $12,062.50 as a down payment to meet the 25% guaranty.
400,000 x 25% = 100,000 needed entitlement/guaranty – 87,937.50 available = 12,062.50 difference needed by Veteran to meet lender requirement.
For a list of county loan limits, please email me or go to http://benefits.va.gov/homeloans/do...limits.pdf
If you would like to discuss your options for second tier availability to you, please do not hesitate to contact me!




Joel Lobb
Senior Loan Officer
(NMLS#57916)


phone: (502) 905-3708
Fax: (502) 327-9119
kentuckyloan@gmail.com

VA Mortgages for Kentucky Veterans




Kentucky VA Mortgage Pre-Approvals for 580 Fico Scores and up!


In the most basic of terms, VA Second-Tier Entitlement gives a qualified military person the ability to have two KY VA mortgages out simultaneously.


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