Kentucky Appraisal for FHA, VA, USDA and Fannie Mae Home Loans

What is an Appraisal?

An appraisal is a valuation of property by an independent, licensed professional known as the appraiser.
The appraiser will review the home itself along with comparable homes in the area and generate a full report on the value of the subject property. They will schedule a visit to inspect, measure, and take photos of the home. An appraisal protects not only the lender’s investment but also you, the buyer.

What if my home doesn’t appraise for the asking sales price?

There are a couple of options in the event that the home value comes in lower than the sales price.

• Review of the report by the real estate agents. Additional comparable home sales or comments are
  then submitted to the appraiser for review and comment;
• The seller may lower the price of the home;
• The buyer may opt to increase the down payment;
• The numbers stay the same and the loan to value changes. The loan is based on the lower of the
  sales price or appraised value. In some situations, a low appraisal does not change the loan terms.
  In others, we make an adjustment to the loan itself without changing the sales price or increasing
  the down payment; or
• A combination of some of the above.
• 
  When do I pay for an appraisal?
• 
  Appraisers require payment at the time of service. The appraisal funds are collected at the time of order. Even if you opt not to proceed with the home purchase after the appraisal is completed, the appraiser still requires payment. Appraisals have to go through appraisal management companies and the average costs of an appraisals for FHA, VA, USDA and Fannie Mae Home loans in Kentucky around $550 for conventional loans to $600 for Government backed appraisals.

When will I receive a copy of my appraisal?

Appraisals are ordered upon receipt of your intent to proceed, payment and the permission to order (once your home inspection process is complete). Most appraisals are completed in 5-7 business
days.

VA appraisals often take an average of 10 business days to complete. Rush appraisals may be available as needed (subject to additional fee).

What if there are required repairs that need to be done before I can purchase the home?

Typically, repairs will need to be completed before we are able to close and fund your mortgage.

The realtors will negotiate and work together with the seller to make the required repairs to the home. A final inspection by the appraiser will be needed to ensure the work is complete.

What is an inspection and how is it different than an appraisal?

An appraisal is used to determine a home’s market value, while an inspection examines the condition of the home and its components. We always suggest hiring an inspector to show you the functionality and safety features of the home. An inspector will examine items such as the roof, electrical,
plumbing, and appliances.

He or she will note any minor or major repairs that should be addressed
prior to closing.

Locate an Active Kentucky Appraiser👇

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Kentucky FHA, VA, USDA Appraisal Requirements for Mortgage Loans.

Joel Lobb
Mortgage Loan OfficerIndividual NMLS ID #57916

American Mortgage Solutions, Inc.

10602 Timberwood Circle Louisville, KY 40223

Company NMLS ID #1364

click here for directions to our office

Text/call:      502-905-3708

fax:            502-327-9119

email:          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

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/

Top 4 reasons why mortgage applications are denied

1. Debt-to-income ratio

Whether you go through a traditional bank or a mortgage lender, your debt-to-income ratio is one of the most important elements of your mortgage application. This ratio is a simple measure of how much debt you carry expressed as a percentage of the amount of money you earn before taxes and deductions each month.

To figure out your debt-to-income ratio, add up all of your monthly debts (including student loans, car payments, credit card bills, and other loans with fixed payments, but not including utilities bills and other variable monthly expenses) and divide it by your gross—or pre-tax—monthly earnings. Most mortgage lenders are looking for a debt-to-income ratio that doesn’t exceed 45 to 50 %, and that includes the mortgage payment you are applying to take on.

If your debt-to-income ratio is too high to consider taking out a mortgage at the moment, that’s a good sign that it’s time to focus on paying down debt before doing any serious house-hunting.”

There are some exceptions to the 45% to 50% rule, but in general, this is the number you want to keep in mind when you do your initial debt-to-income ratio calculations. Not only does this tell you whether you are carrying more debt than most lenders are willing to work with, it will also tell you how much mortgage you can realistically hope to borrow. By paying off any one (or more) of your debts, you’d free up more money to go toward a potential mortgage.

If your debt-to-income ratio is too high to consider taking out a mortgage at the moment, that’s a good sign that it’s time to focus on paying down debt before doing any serious house-hunting.

2. Credit score

This is another biggie. As you probably know, credit scores are used by lending institutions to assess each individual’s creditworthiness based on their financial history, including payment history (on-time versus late or missed payments), total amount of debt, length of credit history, and other factors. Credit scores, which are measured slightly differently across three major reporting agencies, range from 300 to 850 and are considered to be an at-a-glance measure of the trustworthiness of individual borrowers.

In general, credit scores below 620 are typically considered subprime and may make it more challenging to get a mortgage, especially with the most competitive interest rates. (If your credit score is in the subprime category, you aren’t alone: as of 2015, a little over half of American consumers—56%—were found to have subprime scores.)

Those with lower credit scores may still be able to get a mortgage—it will likely just require more shopping around (and having more cash on hand for a down payment is helpful, too). While Fannie Mae and Freddie Mac each require a minimum credit score of 620, the FHA has more forgiving parameters, making FHA loans a better bet if you are in credit-repairing mode.

FHA loans were created in the 1930s to make homeownership more widely accessible, and their guidelines stipulate that credit scores as low as 500 may be accepted with a 10% down payment. Credit scores of 580 or above, meanwhile, may be eligible with as little as 3.5% down. Remember, though, that you will need to identify lenders that don’t apply additional credit score overlays on top of these minimum requirements in order to actually score a mortgage with the lowest required scores.

Keep in mind, also, that anytime you apply for a new loan, you’ll typically accrue a “hard inquiry” on your credit report as your potential lender checks out your credit history. Too many hard inquiries can negatively impact your credit score, so if you know you will be applying for a mortgage soon—or if you’ve already been pre-approved for a mortgage—you’ll want to avoid applying for any other loans (like credit cards or car loans) until after you’ve secured your mortgage.

3. Employment history

Your employment history is another major factor when it comes to your mortgage application. In general, most lenders want to see at least two years of consistent of employment history at the time you apply for your mortgage.

Requirements may differ depending on whether you are paid a salary versus hourly wages, work part-time versus full-time, and whether you are employed or self-employed. Note, too, that different lenders may handle income from things like a second job and overtime differently; these sources of income may not always be allowed to count toward your overall income on your mortgage application. Given these variables, you should be sure to tell potential lenders the details of your employment situation at the outset to make sure you don’t hit any unforeseen bumps in the road.

If, after approaching a handful of lenders, you find that your employment history is a little too spotty, now may be the time to focus on remaining consistently employed for a year or two before applying for a mortgage.

4. Appraisal issues

Occasionally, a mortgage application may be denied because of issues with the property itself and how it is valued rather than your own personal information.

Remember that the sale price of a home may not always correspond with the appraised value of the home. The appraised value is based on local comps, or other comparable houses that have recently sold in the same area, and other factors. Because the house you are buying will be used as collateral against your home loan, lenders use appraisals to confirm that the mortgage amount you are requesting is in line with the actual value of the house. If the appraised value is significantly lower than the agreed-upon sale price, you’ll either need the seller to come down off their price, or you would need to pay the difference out of pocket.

Note that especially unique properties—think geodesic domes and other, less striking examples—may come up against appraisal issues because of a lack of relevant comps.

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 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).

Property Flipping Rules for Mortgages for FHA VA USDA Conventional Appraisals

FHA MORTGAGE LOANS AND FLIPPING RULE FOR APPRAISALS
Resales Occurring 90 Days or Fewer after Acquisition:
 Not eligible for FHA financing
Resales occurring between 91 days and 180 Days after Acquisition:
 Obtain 2nd appraisal if resold between 91 to 180 days after acquisition
 Obtain 2nd appraisal if resale price is 100% or more over price paid by seller
 If 2nd appraisal is more than 5% lower than value of first appraisal, the lower value must be used
 Borrower not allowed to pay for 2nd appraisal
Exceptions to FHA Flipping Rules:
 Property purchased by an employer or relocation company due to relocation of an employee
 Resales by HUD – REO program
 Sales by other government agencies (i.e., IRS, court-ordered, DEA, etc.)
 Sales of non-profit agencies approved to purchase HUD properties
 Acquisition due to inheritance
 Sales of properties by federally chartered financial institutions
 Sales of properties by GSE’s
 Sales of properties by local or state governments
 Sales by builders selling a new home
 Sales of properties in federally declared disaster areas
NOTE: Mortgage Company must obtain a 12-month chain of title to document time restrictions above.
VA MORTGAGE AND FLIPPING RULE

 No Flipping Rules – Overlays may apply or at Underwriter’s discretion
USDA RURAL HOUSING MORTGAGE FLIPPING RULES
 Lender is responsible to ensure that any recently sold property’s value is strongly supported when a significant
increase between sale and purchase occurs.
 Lender must ensure that the appraisal value is supported with validated comps and protect the borrower from
predatory lending.
Fannie Mae Appraisal Flipping Rules
 No Flipping Rules – Lender overlays may apply
Freddie Mac
 No Flipping Rules – Lender overlays may apply

 

Joel Lobb
Senior  Loan Officer

(NMLS#57916)

American Mortgage Solutions, Inc. NMLS# 1364

10602 Timberwood Circle, Suite 3

Louisville, KY 40223

text or call my phone: (502) 905-3708
email me at kentuckyloan@gmail.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 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). Mortgage loans only offered in Kentucky.

All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.