- 4 Things Required for a KY Mortgage Loan Approval
- Credit Scores Required For A Kentucky Mortgage Loan Approval in 2021
- Down Payment Assistance Kentucky 2021 Kentucky Housing Corporation KHC
- Kentucky First-time Home Buyer Programs
- Kentucky FHA Mortgage Information
- Kentucky VA Mortgage Loan Information
- USDA Rural Housing Kentucky Loan Information
- Zero Down Kentucky Mortgages
- First-time Home-buyers in Kentucky
- Documents Needed Mortgage Approval in Kentucky
- Free Credit Score Booklet
- Do's & Dont's before closing:
- Closing Costs Kentucky Mortgage
- Lock Kentucky Mortgage Loan Rate
- Home Inspections Kentucky
- Accessibility Statement
What Affects Your Interest Rate for a home loan in Kentucky?
There are really four key factors that will influence rates on your mortgage loan in Kentucky:
The market, your financial situation, the type of Kentucky Mortgage loan (FHA, VA, USDA Conventional), and the loan structure.
The Market for Kentucky Mortgage Rates
Mortgage Backed Security prices directly impact interest rates. Mortgage backed securities or mortgage
bonds are a market just like the stock market. So, when economic news affects these mortgage bond
prices, home loan rates are directly influenced. One of the biggest influencers of this market is
inflation. Inflation or even expectations of inflation will negatively impact mortgage bond prices and
ultimately increase rates on your home loan in Kentucky
Financial Situation For Your Kentucky Mortgage Rate
Your income gives you the ability to make
your monthly mortgage payments. Generally,
lenders require applicants to have a two-year stable
employment history. Applicants who have been at
their job for a shorter period of time should be in the
Your savings enable you to pay for the
upfront costs associated with purchasing a home.
These include the down payment, closing costs and
The amount of debt you have will impact your
debt to income ratio. Debt payments consist of car
payments, student loans, alimony, required payments
on installment loans and required payments on credit
cards. They do not include rent, utility bills, mortgage
payments for loans being paid off, or payments on
credit card balances that you pay in full at the end of
the month. Lenders look at debt to income ratios to
determine how much home you can buy.
Credit and Credit Score
– If you want to be eligible for
the best mortgage rates, you will need to maintain a
credit score of 760 and above middle score of the
Mortgage Fico Scores lenders pull through Equifax, Experian and Transunion
Not only will this excellent
score motivate the lender to lower your rates to get
you as a customer, you will have more choices about
which mortgages are available to you. Your overall
payment history on the debts you have can also impact
your ability to qualify for certain types of loans, which
can affect your interest rate.
Type of Kentucky Mortgage Loan & Loan Structure
– The type of loan will impact the rate
you can expect. There are many types of loans Kentucky Mortgage Loans.
Conventional, FHA, VA, USDA, and Jumbo loans
can all have different rates.
– The best mortgage rates are
typically offered if you are purchasing a property
that is intended to be occupied as your primary
residence. Rates for second homes and investment
properties are typically higher.
– The duration of the loan can affect
mortgage rates. A shorter loan period will usually
equate to a lower mortgage rate and a longer loan
will typically have higher rates.
Down Payment –
A larger down payment can
impact interest rates. Putting more down will
decrease the risk for a lender and can improve
your interest rate. If you put less than twenty
percent down, certain types of loans require
mortgage insurance and this can also impact the
interest rates available.
Discount Points –
In order to get a lower rate
some clients choose to pay discount points.
Basically, discount points are percentages of the
loan amount paid in cash at closing in order to
lower a rate.
Lock Term –
The length of time you need to lock
in your rate can impact your rate. Typically, longer
term rates are more expensive.
Mortgage Loan Officer
What home loan programs are available to first time home buyers in Kentucky?
1. FHA Loans in Kentucky
- Great for First Time Home buyers in Kentucky
- Low Down Payment of 3.5% for scores above 620
- Easy Credit Qualifying with lower credit scores
- 2 years removed from bankruptcy Chapter &
- 3 years removed from a foreclosure
- Clear Cavirs
- 2 year work history
2. USDA Loans in Kentucky
I live in a rural area and need financing for a home and have no money down in Kentucky for a home loan
- Great for those with Low to Moderate Income.
- Up to 100% Financing
- Flexible Underwriting Guidelines and Credit Qualifications
- Household Income & Property Geographic Limitations Apply
3. Conventional Loans in Kentucky
I am able to make a larger down payment and have a good credit score.
- Great for those with Moderate to High Income
- As Little as 5% Down Payment (only 3% for First-Time Homebuyers)
- 20% Down Payment Removes Mortgage Insurance Premiums
- Flexible Terms
4. VA Loans in Kentucky
I am an active member of the military or a veteran in Kentucky
- Designed to Provide Financing to American Veterans
- Up to 100% Financing
- No Monthly Private Mortgage Insurance (PMI)
- No minimum credit score
- 2 years removed from bankruptcy
5. FHA Manufactured Home Guidelines for Mobile homes in Kentucky
- Great for First Time Homebuyers
- Low Down Payment
- Easy Credit Qualifying
- Easy Refinancing
KHC requires an Affidavit of Conversion to Real Estate per KRS186A.297, when manufactured home is permanently affixed to land.
The Certificate of Title is surrendered.
If manufactured house has not been converted to real estate, then this can be done at closing.
The following items need to be uploaded in the Closed Loan Package:
A copy of the recorded affidavit and the surrendered title to the manufacture home.
A copy of the executed affidavit and title (to be surrendered) sent to the county clerk for recording.
If a new manufactured home, copy of the original certificate of origin from the manufacturer that is going to be delivered to the county clerk so that title can be ordered.
After title is received, affidavit is prepared for recording and title is surrendered.
Within 90 days or less from closing date, need original of newly recorded affidavit and coy of surrendered title.
Failure to send to KHC within timeframe could result in repurchase.
Affixations are not acceptable.
Do not record affixations with the mortgage.
Manufactured Housing Guidelines for Mobile homes in Kentucky
FHA and VA Loan with Manufactured Homes
Both new and existing manufactured housing is allowed.
FHA requires a foundation inspection by a structural engineer.
RHS Loans with Manufactured Home
KHC only allows new manufactured housing.
Dealer to property and set up like a stick built house.
Conventional Loans with Manufactured Home
Both new and existing manufactured housing is allowed with Conventional Preferred and Preferred Risk programs.
95% LTV / 105% CLTV.
No Structural Engineer inspection required for Conventional Loans
Kentucky Down Payment Assistance Program for First Time Home Buyers
First Time Home Buyer Programs to Consider for 2021 Kentucky Homebuyers.
- 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 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.”
MRB Special Funding Kentucky Housing Corporation (KHC) is offering $5.5 million in special funding, available at 1 percent, fixed for 30 years, for first-time homebuyers.
DO maintain up-to-date records The mortgage application process is paperwork-heavy, and lenders could ask you to pull up records at a moment’s notice. To make things easier for yourself, make sure you have the following records readily available:
- Income: Underwriters typically verify income and tax documents through your employer, so hold onto new paystubs as you receive them.
- Assets: It’s best practice to save all incoming account statements in the order in which you receive them; keep all numbered pages of each statement.
- Gifts: If you’re receiving any gift money from relatives, they’ll need to sign a gift letter (which your loan officer will provide) and an account statement evidencing the source, which must be “seasoned” funds.
- Current Residence: If you’re currently renting, continue to pay your rent on time and save proof of payment. If you intend to sell your current residence, be prepared to show your HUD-1 Settlement Statement. If you plan on renting out your home, you may need to show sufficient equity, a lease, and receipts for the security deposit and first month’s rent.
DO keep your credit score in mint condition. Continue to make payments on time. The lender might pull your credit report again, and any negative change to your score could jeopardize your approval.
DO understand that things change. The requirements to receive approval for a home loan are always changing, and underwriters require more documentation now than they have in the past. Even if requests seem silly, intrusive or unnecessary, keep in mind that if they didn’t need it, they wouldn’t ask for it.
DON’T apply for new credit. Changes in credit can cause delays, change the terms of your financing or even prevent you from closing on a home. If you must open a new account (or even borrow against retirement funds), be sure to consult your loan officer first.
DON’T change jobs midway through the process. Probationary periods and career or status changes — such as from a salaried to a commission-based position, leave of absence or new bonus structure — can be subject to strict rules.
DON’T make undocumented deposits. Large (and sometimes even small) deposits must be sourced unless they’re identified. Make copies of all checks and deposit slips, keep your deposits separate and small, and avoid depositing cash.
DON’T wait to liquidate funds from stock or retirement accounts. If you need to sell investments, do it now and document the transaction. Don’t take the risk of the market working against you, leaving you short on funds for closing.