Kentucky First‑Time Homebuyer Interactive Quiz
This no‑fluff assessment helps you understand credit score cutoffs, true $0‑down options, how AUS (DU/GUS) works, rate locks, DTI math, and closing costs in Kentucky. Finish in 5–7 minutes and get personalized next steps from Joel Lobb at EVO Mortgage.
Created by Joel Lobb, Mortgage Loan Officer • NMLS 57916 • EVO Mortgage NMLS 1738461 • Equal Housing Lender
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What kind of credit score do I need to qualify for different first time home buyer loans in Kentucky?
Most lenders want 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 cost anything to get pre‑approved for a mortgage loan?
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?
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?
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?
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 kind of like gas prices, they change daily
How much money do I need to pay to close the loan?
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 $500-$650 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, USDA, 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?
Most lenders will honor your loan pre-approval for 120 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?
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 you know! The max house payment you would qualify would be the $890, because it is the lowest payment of the two ratios.
Key mortgage facts to know
- Mortgage rates change just like the stock market, throughout the day. Mortgage rates you see today may not be available tomorrow.
- Different lenders charge different fees. Don't expect every lender to charge the same fees for a mortgage loan.
- 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.
- Your middle credit score matters. When you apply for a mortgage loan, the lender will pull your credit scores from three credit bureaus to help them determined if you are credit worthy. Your middle score of the three is what lenders will use for loan qualification.
- You can refinance your home loan anytime. You can refinance your mortgage anytime, but it doesn't necessarily mean you should.
- You can get a mortgage loan after a foreclosure. There are waiting periods involved: FHA requires three years after foreclosure to apply. Conventional loans require seven years from foreclosure. VA loans require two-years.
- 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.
- Know your Annual Percentage Rate (APR). 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.
- 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.