I specialize in Kentucky First Time Homebuyers FHA, VA, USDA & Rural Housing, KHC and Fannie Mae mortgage loans. I have helped over 900 Kentucky families buy their first home and refinance their current mortgage for a lower rate; Kentucky First time buyers $0 down still available with down payment assistance with KHC. Free Mortgage applications same day approvals. Web site is not endorsed by the FHA, VA, USDA govt agency. Text/call 502-905-3708 kentuckyloan@gmail.com NMLS 57916 NMLS ID 1364
Pages
- 4 Things Required for a KY Mortgage Loan Approval
- Down Payment Assistance Kentucky 2024 Kentucky Housing Corporation KHC
- Credit Scores Required For A Kentucky Mortgage Loan Approval in 2024
- 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
- Home
- Accessibility Statement
- Legal / Privacy Policy / Accessibility Statements
Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Credit Scores Required For A Kentucky Mortgage Loa...
What is a Good Credit Score for a Kentucky FHA, VA, USDA, Fannie Mae Conventional KHC Mortgage Loan Approval?
What is a Good Credit Score?
Your credit score is a numerical representation of your credit report. This three-digit number is like a badge that predicts risk, credit responsibility and determines your interest rates if you borrow money from lenders much like your CLUE Report. While you will be able to get a copy of your credit report you may not find this numerical key listed. Think of your credit score like the cliff notes version of your credit report. There are a few different measures of credit scores between divisions. Based on their own systems different scorers might view certain numbers in many ways.
Having a good credit score is great, but if you don’t know how to use it you could be missing out on some crucial credit building. Credit scores are used in varying ways by lenders and banks. One thing your credit score implies is how likely you are to pay back debt. Basically it announces how reliable you are as a borrower. People with good credit scores are more likely to pay back funds that they borrow while those with lower scores aren’t so reliable. Lenders like reliable borrowers, and good credit points them out.
In order to build and maintain good credit you must first know how your score is determined. Once you know what goes into a credit score you can begin building your credit or nursing your score towards higher digits. Credit scores are based on your financial history only, and laws prevent your score being affected by things like race, gender, age and where you live. What is included are items such as your payment history, your current credit debts, age of your credit history, new credit items added to your accounts and types of credit used.
- Payment history (35%) – How many on-time payments you’ve made, missed, defaulted and past due items
- Current amount owed (30%) – How much you currently owe – if you owe a large amount this could negatively affect your score
- Age of credit history (15%) – The average length of your credit accounts and time since last activity
- New credit (10%) – The number of new credit items on your accounts
- Types of credit (10%) – The kinds of credit accounts are you currently maintain
Many people avoid credit based on all the negatives they’ve heard against it, but neglecting your credit score hurts your chances of being able to make major purchases in the future. The best way to build credit is to use credit, and forming the following good credit habits early will pull your low score to higher ground.
- Pay bills on time – This is the easiest and best way to boost your credit score. Since the bulk of your credit score comes from your payment history, paying bills on time will pull you up quickly. Not only will that help, but a recent and consistent history of paying bills on time overshadow a period long in the past where you may have missed payments.
- Budget – Setting up a budget and staying within its parameters will keep you from overspending and using credit for frivolous things. Although using credit builds credit not being able to pay it off hurts more in the future.
- Use all your credit cards regularly – If you have a few credit cards try to use them from time to time in order to show that you use all of your accounts. Remember that the last usage of an account is 15% of your score.
Important items to note:
- We may not receive a new score for you each month. You won’t see a score if we did not receive one for a given month.
- Remember, FICO® Scores are based on data in your credit report, so changes to your score may be a result of changes in your credit report. You can request a free annual credit report from Equifax at www.annualcreditreport.com.
FICO® Scores: What You Need to Know
Score Deciding Factors
- What is a credit report?
- What do mortgage lenders use to determine my credit score?
- What does FICO stand for?
- What determines my FICO score?
- What’s a good FICO score?
- What if my FICO score is below 620?
- Can I get a copy of my credit report?
- Ah Ha! Now I understand all things credit and I’m this much closer to owning my home!
- Your identity: name, social security number, date of birth and possibly employment information.
- Your existing credit: credit card accounts, mortgages, car loans, students loans etc.including credit terms, how much you owe, and your payment history.
- Your public record: Judgments against you, tax liens or bankruptcies.
- Recent Credit Inquiries: Requests for your information from companies extending credit such as credit card companies, auto loans, etc.
- Put more money down. Some lenders offset a weak credit score with a higher down payment. A higher down payment gives you more equity in your home, lowering the lender’s risk.
- You may qualify for a non conventional government issued loan such as an FHA, Veterans Affairs and/or U.S. Department of Agriculture loan which have less stringent lending requirements.
- You may work to get that credit score up!
- Correct any errors on your report. Analyze your credit items line by line. If you notice a mistake, dispute it right away with either the credit bureau providing the report or the company that providing the incorrect information to the credit bureau.
- Make all your payments on time. Late payments are the No. 1 way to lower your credit score.
- Pay down revolving debt. Keeping your credit balances low helps to raise your score.
- Sit back and relax. As long as you're paying down debt and making payments on time, your credit score will eventually rise on its own.
Mortgage Loan Officer
email: kentuckyloan@gmail.com
FHA CHANGES TO HANDLING OF COLLECTIONS, JUDGEMENTS AND DISPUTED ACCOUNTS ON CREDIT REPORT
- Applicable to Manually Underwritten Loans: The lender must document reasons for approving a mortgage when the borrower has collection accounts or judgments.
- The borrower's disregard for financial obligations;
- The borrower's inability to manage debt; or
- Extenuating circumstances.
- Applicable to Loans Run Through TOTAL Mortgage Scorecard: TOTAL Mortgage Scorecard Accept/Approve - There are no documentation or letter of explanation requirements for loans with collection accounts or judgments run through TOTAL Mortgage Scorecard receiving an "Accept/Approve" despite the presence of collection accounts or judgments. These accounts have been already taken into consideration in the borrower's credit score. If TOTAL Mortgage Scorecard generates a"Refer," the lender must manually underwrite the loan in accordance with the guidance above applicable to manually underwritten loans with collection accounts and judgments.
- At the time of or prior to closing, payment in full of the collection account (verification of acceptable source of funds required).
- The borrower makes payment arrangements with the creditor. If the borrower has entered into a payment arrangement with the creditor, a credit report or letter from the creditor verifying the monthly payment is required. The monthly payment must be included in the borrower's debt-to-income ratio.
- If evidence of a payment arrangement is not available, the lender must calculate the monthly payment using 5% of the outstanding balance of each collection, and include the monthly payment in the borrower's debt-to-income ratio.
Disputed Derogatory Credit Accounts greater than or equal to $1,000
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If the cumulative outstanding balance of disputed derogatory credit accounts of all borrowers is equal to or greater than $1,000, the mortgage application must be downgraded to a"Refer" and a Direct Endorsement underwriter is required to manually underwrite the loan as described above.
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Disputed Derogatory Credit Accounts less than $1,000
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If the cumulative outstanding balance of disputed derogatory credit accounts of all borrowers is less than $1,000, a downgrade is not required.
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Excluded Accounts
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- disputed charge-off accounts,
- disputed collection accounts, and
- disputed accounts with late payments in the last 24 months.
- disputed accounts with zero balance,
- disputed accounts with late payments aged 24 months or greater, and
- disputed accounts that are current and paid as agreed.
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Fill out my form for mortgage pre-approval by clicking this link!
Kentucky USDA Rural Housing Mortgage Lender: CREDIT ALERT VERIFICATION REPORTING SYSTEM (CAIVRS...
Kentucky_First_Time_Home_Buyer_Programs
Kentucky Conventional mortgages
How to qualify for a Kentucky conforming loan
A conforming loan meets the borrowing limits set by the Federal Housing Finance Agency (FHFA). Here are the requirements:
- Credit score: 620-but to get an approval need a 720 or higher usually...
- DTI: 36% to 50%, depending on the lender and how strong other parts of your financial profile are-if you have mortgage insurance max debt to income ratio is 45% backend ratio
- Down payment: You may need up 5% minimum for standard Fannie Mae loans, but if your mortgage is backed by government-sponsored mortgage companies Freddie Mac or Fannie Mae, you'll only need 3% for their Homepath or Homepossible mortgage loans.
- Max loan limits of $548,000 in 2021
There are three main types of government mortgages: Kentucky FHA, VA, and USDA loans.
How to qualify for an Kentucky FHA loan
A loan from the Federal Housing Administration is for buyers who don't have the best credit scores or DTIs, but still want to buy a home. Here's what you'll need for an FHA loan:
- Credit score: 580
- DTI: 56% max approval usually with good scores and a AUS approval through Fannie Mae or Freddie Mac, and money down. DTI is lower on a manual underwrite loan.
- Down payment: 3.5%; or if your score is between 500 and 579, you can qualify with a 10% down payment
- Other requirements: The FHA restricts how much you can borrow, and your limit depends on where you live in the US and whether you're buying a single- or multi-family place. Your home must meet certain property standards. You can use an FHA loan to buy a home with normal wear and tear, but not one with major structural or safety issues.
- Max loan limits of $356,000 for 2021 in Kentucky
How to qualify for a Kentucky VA loan
A Veterans Affairs loan is for military families. Here are the requirements:
- Credit score: no minimum score but most lenders will want a 620 minimum credit score
- DTI: 41% for a manual underwrite, can be much higher on AUS approval through Fannie Mae or Freddie Max
- Down payment: No down payment is necessary
- Residual Income Requirements by state and household size.
- Other requirements: You must be an active-duty military member or a veteran who served for a certain amount of time. You'll also qualify if you're a spouse of someone who died in active duty or another military-related incident, or if your spouse is a prisoner of war or MIA. The home you're buying should meet safety standards and be used as your primary residence, but there are no strict borrowing limits set by the VA.
How to qualify for a USDA loan
A loan from the United States Department of Agriculture is for low-to-moderate income borrowers buying homes in rural or suburban areas. You'll need the following to be eligible:
- Credit score: 581 minimum score, but most lenders will want a 620 to 640 credit score
- DTI: 45% for a GUS USDA loan approval, on a manual underwriter 41%
- Down payment: No down payment is necessary
- Other requirements: Your home must be in a rural or suburban part of the US. If you already know the address of the home you want to buy, enter the information into the USDA Property Eligibility Site to see if it qualifies for a USDA loan. You also must earn a low-to-moderate income, and the limit varies based on where you live.
Knowing which mortgage types you qualify for can help you determine which one is the best fit. There may be some flexibility, though. For instance, a lender may approve you with a high DTI if you have an excellent credit score and sizeable down payment. If you're set on a certain type of mortgage but don't qualify, call a lender to ask about your options.
Mortgage Loan Officer
email: kentuckyloan@gmail.com
Louisville Kentucky VA Home Loan Mortgage Lender: How VA home loans Work
Louisville Kentucky VA Home Loan Mortgage Lender: How VA home loans Work
What effects your Kentucky Mortgage Rate for FHA, VA, USDA and Conventional Mortgage Loans?
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
Income –
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
same field.
Savings –
Your savings enable you to pay for the
upfront costs associated with purchasing a home.
These include the down payment, closing costs and
cash reserves.
Debts –
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
Loan Type
– 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.
Occupancy
– 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.
Duration
– 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
email: kentuckyloan@gmail.com