Does bad debt, collections, or charge offs on credit report have to be paid off to get a VA loan approval in Kentucky


Collections on Credit Report and How They affect a Kentucky VA Mortgage Loan Approval
 
Collection accounts are accounts for a debt that have been submitted to a collection agency by the creditor generally due to nonpayment. Below are general tips and guidance on what DU will require when collection accounts are reporting on a borrower’s credit report.
 
Accounts that are reported as past due but not yet turned over to a collection agency must be brought current. These past due accounts are not considered collection accounts.
 
Kentucky VA Mortgage Loan Guidelines Below for Credit and Collections:
 
 
Any collection account required by DU (Automated  Underwriting System used by Mortgage Lenders) to be paid must be paid prior to or at closing.
Isolated collection account do not necessarily have to be paid off for loan approval.
Borrowers with a history of collection accounts should have re-established satisfactory credit in order to be considered a satisfactory credit risk.
Lenders/underwriters should review the complete credit history and use sound judgment to determine if collection account pose a credit risk to the borrower’s ability to repay the loan.

Use These Findings to Boost Your Credit Score for a VA Mortgage Loan Approval

Here are 3 tips on improving a low credit score for a VA mortgage Loan Approval:

Step 1: Get a line of credit

In order to establish credit history, you need to have a form of credit. The simplest way for you to begin will be to open a credit card. If your score is low or non-existent, then you’ll need to apply for a secured card or a store card.

  • Secured Card:  You’ll use your own money as collateral by putting down a deposit of a few hundred dollars with the bank. Typically, that amount will then be your credit limit. Once you prove you’re responsible, you can get back your deposit and upgrade to a regular credit card. [Read more here]

  • Store Card: People with a low credit score can often still get store cards because banks are more likely to approve users who apply through the store. The catch is that the interest rates are often very high if you can’t make your payments. [Read more here]

Step 2: Keep your utilization rate low

Utilization is the amount of your credit limit you spend each month. For example, if you have a $500 credit limit and spend $50 in a month, you’re utilization will be 10%. Your utilization is part of what determines your credit score.

Your goal should be to never exceed 30% of your credit limit. Ideally, you should be even lower than 30% because the lower your utilization rate, the better your score will be.

We recommend you make one small purchase (hello, pack of gum) a month to keep your utilization low and help increase your credit score at a faster rate.

Step 3: Pay in full, and on time, each month

The easiest way to prove you’re responsible is to only charge what you can afford. Never use your credit card to buy an item you won’t be able to pay off on time and in full each month.

Being late on your payments has a huge, negative impact on your credit score.

There is also no advantage to only paying the minimum amount due on your card. That will only result in you paying interest and does nothing to help your credit score. So just save yourself money and pay your entire bill.

Customer Reviews below:
👀👀👀👀😍😍😍😍👇👇👇👇👇
Absolutely Amazing!! I emailed Joel after I had just got a denial from a bank and just thought i would try to get some advice on what my next steps would be to get a house. I honestly didn’t expect to even get a reply because my credit is not great. That was about a week and a half ago. I just signed a contract on a house last night. ONLY because of Joel Lobb. He even worked with us throughout the weekend, which shocked me. Best decision I have ever made. THANK YOU SO MUCH FOR WORKING WITH US THROUGHOUT THE ENTIRE PROCESS.

 

 

 

Cee Bellisle August 2018
😃
Contacted him about buying a home and he was great to work with. I was moving to Louisville Ky to take a new job and he walked me through the entire process. He explained to me all the different options for FHA, VA, USDA mortgage loans and credit score requirements versus Fannie Mae. Since I was a first time home buyer I needed alot of help and guidance. I would definitely recommend him. Fast to respond and available to answer questions that I or my realtor had after hours.
Anderson Johnson April, 2018
We moved from Michigan to Northern Kentucky area and we were really impressed. We got a USDA loan no money down and closed in less than 3.5 weeks. We shopped around online with other lenders but Joel was always first to respond and his rates were just a little better than other lenders. He kept us informed through the process along with our realtor and there was absolutely no surprises like we heard from other co-workers and friends that they experienced in their loan process. We have already referred another co-worker to Joel . He’s AWESOME!
Patty Kingston July 2018
😍
betty parsons
Wow,  what a great loan officer. I was referred to him by our agent and he was great to work with. We used him for a USDA no money down loan in  Shelby County and we were really impressed. We  were afraid we could not buy a home since we did not have money saved for a down payment, but Joe l was able to get us a zero down loan and we even got our appraisal fee and good faith deposit back at closing. We actually got money back at closing!!! I Can’t think him enough. Our family moved from our apartment in the south end  of town to get our own home with 5 acres  for our kids and 2 dogs, at a payment that is equal to our rent payment also. .Thanks Again Joel. May god bless you
Patty Locker
We contacted Joel about buying a house on our move from Ohio for my husband’s job transfer with Ford. We put a lot of trust in him since we were new to the area and first time home buyers in the Louisville KY market, and he always delivered on what he said. It took us a while to find a home due to the lack of homes,  but once we got one, he was always quick to respond our questions via text or email ,and kept us informed through the process. We got to meet him at the closing and he was super nice and even got us a closing gift for our home which we didn’t expect at all. Super nice guy 😀!!! I would definitely recommend him for a local Home loan in the Louisville area.
Like
pam dolby
I got a VA loan with Joel and he was great. He is an ex-army guy so he could relate to my past experiences of being a veteran and moving around the country a lot. I had some credit issues that required a little extra work but Joel was able to find A VA lender to approve my situation as far as having past bad credit problems and a lower credit score. We closed yesterday on our home here in Louisville and we could not be happier. We finally have a home of our own thanks to Joel . I would definitely recommend him for a mortgage loan. Great experience and closed 8 days before expected close date so we were able to move in early.
I contacted Joel about the $10,000 KY Housing Grant last month and we were able to get it and I just closed on my home. He was great to work with and if you are a first time home buyer here in Louisville, I would definitely contact him. I met him at his office and he was very nice and knowledgeable and kept me informed through the process. No surprises either so I was very happy. I am new homeowner thanks to Joel .


I can answer your questions and usually get you pre-approved the same day. 


Call or Text me at 502-905-3708 with your mortgage questions.
Email Kentuckyloan@gmail.com












 
 

 

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


 
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). I lend in the following states: Kentucky

What paperwork is needed for a Mortgage Loan Pre-Approval in Kentucky?


What Paperwork Will I Need?

Minimum Documentation List

  • Last 30 days pay stubs for all borrowers
  • Last 2 years w2 statement for all borrowers
  • Last 2 years tax returns, all schedules
  • Minimum: Verbal of source cash to close will come from (assets, gift, equity)

Additional Documentation – Verbal of balances ok to start

  • Last 60 days bank statements covering funds to close
  • 401k documentation if taking out loan against retirement

Complete Documentation List for Most – Will eventually be needed

  • Borrower’s Authorization form
  • Current Driver’s License for all borrowers
  • Social Security Card for all borrowers
  • 4506T Form signed – Authorization to order tax transcripts for income verification

Self Employed, Bankruptcy, Foreclosure, Short Sale or Deed in Lieu in Past

If you are self employed, or suffered a financial hardship in the past, expect that additional documentation will be asked for.

Self Employed

  • Evidence of 2 years as business entity (business license)
  • Last 2 years business tax returns or Schedule C – if applicable

Financial Hardship

  • Bankruptcy petition – if applicable
  • Bankruptcy discharge – if applicable
  • Bankruptcy notice to creditors – if applicable
  • Final HUD from short sale – if applicable
  • Deed in Lieu agreement – if applicable
  • Addresses of homes included in BK – subsequent foreclosure, short sale or DIL

 

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.

Get a pre-approval

Mortgage pre-approvals aren’t ironclad, but they are a solid indicator of an eventual approval so long as nothing major changes between pre-approval and final mortgage application. “I have seen people that have wanted to switch jobs or make major financial decisions in the middle of their application process,” says CORE New York real estate broker John Harrison. “Don’t do it. Every type of approval down to the final loan commitment is still usually contingent on something. If you change the scenario, you may pull the plug on the whole deal.”

KENTUCKY VA REFINANCE LOAN

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
 
 

 

 

What is the minimum credit score I need to qualify for a Kentucky FHA, VA, USDA and KHC Conventional mortgage loan?


What is the minimum credit score I need to qualify for a Kentucky mortgage currently?

Question:
What is the current minimum credit scores needed to qualify for a Kentucky mortgage Loan?
Answer:
The minimum credit score needed to qualify for a Kentucky mortgage depends on the type of loan program you are looking to obtain, this could be the reason that you have received conflicting answers. The most common types of mortgage are Conventional, FHA, USDA, VA, and KHC mortgage loans in Kentucky. I’ll explain each briefly below and the minimum credit score needed to qualify for each loan program. Keep in mind these are continuously changing and can vary by lender do to credit overlays.
Kentucky Conventional or Fannie Mae  
Conventional loans make up the majority of mortgages in the US. They are also known as conforming loans, because they conform to specific guidelines set by Fannie Mae and Freddie Mac.
  • Minimum Credit Score is 620
  • The maximum loan amount varies by Geographical Area , for 2020 it is between $510,400
  • You can use a conventional loan to buy a primary residence, second home, or rental property
  • Conventional loans are available in fixed rates, adjustable rates (ARMs), and offer many loan terms usually from 10 to 30 years
  • Down payments as low as 3% and 5% depending on Home Ready or straight conventional loan.
  • No monthly mortgage insurance with a down payment of at least 20%
  • Max Debt to Income Ratio of 50%
KENTUCKY FHA MORTGAGE
An FHA loan is a mortgage issued by federally qualified lenders and insured by the Federal Housing Administration (FHA). FHA loans are designed for low-to-moderate income borrowers who are unable to make a large down payment.
  • Minimum Credit Score is 500 with at least 10% down
  • Minimum Credit Score is 580 if you put less than 10% down
  • The maximum loan amount varies by Geographical Area, for 2020 it is between $331,760
  • Upfront and Monthly Mortgage Insurance is required regardless of the Loan to Value
  • FHA Loans are only available for financing primary residences
  • Maximum Debt to Income Ratio of 50% (unless mitigating factors justify allowing a higher DTI) up to 57% in some instances with strong compensating factors.
KENTUCKY USDA RURAL HOUSING LOAN 
    • 100% Financing
    • Cities and towns located outside metro areas-see link (https://eligibility.sc.egov.usda.gov/eligibility/welcomeAction.do?pageAction=sfp
    • Do NOT have to be a Kentucky First Time Home Buyer
    • No Down Payment
    • 30 year low fixed rate loans
    • No Prepayment Penalty
    • Great Low FIXED Interest Rates
    • No max loan limits, just income limits
    • Possible to Roll Closing Costs into Loan if Appraises Higher
    • No Cash Reserves Required
    • UNLIMITED Seller Contribution toward Closing Costs
    • 100% Gifted Closing Costs allowed
    • Primary Residents only (no rentals/investment properties)
    • Debt to income ratios no more than 45% with GUS approval and 29 and 41% with a manual underwrite.
    • Only Need a 580 Credit Score to Apply*** Most USDA loans need a 620 or score higher to get approved through their automated underwriting system called GUS. 640 usually required for an automated approval upfront.
    • No bankruptcies (Chapter 7) last 3 years and no foreclosure last 3 years. If Chapter 13 bankruptcy possible to go on after 1 year
     
  • KENTUCKY VA Mortgage
  • 100% Financing Available up to qualifying income and entitlement
  • Must be eligible veteran with Certificate of Eligibility. We can help get this for veterans or active duty personnel.
  • No Down Payment Required
  • Seller Can Pay ALL Your Closing Costs
  • No Monthly Mortgage Insurance
  • Minimum 580 typically Credit Score to Apply–VA does not have a minimum credit score but lenders will create credit overlays to protect their interest.
  • Active Duty, Reserves, National Guard, & Retired Veterans Can Apply
  • No bankruptcies or foreclosures in last 2 years and a clear CAVIRS
  • Debt to income ratios vary, but usually 55% back-end ratio with a fico score over 620 will get it done on qualifying income and if it is a manual underwrite, 29% and 41% respectively
  • Can use your VA loan guaranty more than once, and in some cases, can have two existing va loans out at they sametime. Call or email for more info on this scenario.
  • Cost of VA loan appraisal in Kentucky now costs a  minimum $475 with a termite report needed on all purchase and refinance transactions unless a condo.
  • 2 year work history needed on VA loans unless you can show a legitimate excuse, ie. off work due to injury, schooling, education etc.
  • You cannot use your GI Bill for income qualifying for the mortgage payment.
KENTUCKY HOUSING DOWN PAYMENT ASSISTANCE 100 FINANCING 

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 views of my employer. Not all products or services mentioned on this site may fit all people

Kentucky Housing Corporation (KHC) has $3 million available in MRB, Special Funding, for active or non-active duty veterans at a 2 percent interest rate, fixed for 30 years.


Screenshot (61)Screenshot (62)

Special Funding, for active or non-active duty veterans at a 2 percent interest rate, fixed for 30 years.

Operation KY Home – MRB Special Funding Program
Kentucky Housing Corporation (KHC) has $3 million available in MRB, Special Funding, for active or non-active duty veterans at a 2 percent interest rate, fixed for 30 years. This special funding program is available on a first-come, first-served basis starting today,Wednesday, September 6, 2017, with new reservations beginning at10 a.m.
This program is targeted to:
  • Households whose gross annual income does not exceed $40,000.
  • An existing or new construction property (purchase price limit $130,000).
  • 620 minimum credit score.
  • FHA, VA or RHS first mortgage options.
  • Households who include active or non-active duty veterans. Documentation may include but not limited to:
    • Leave and Earnings Statement (LES)
    • DD214 – Discharge from Active Duty
    • VA Award Letter
  • Must meet insuring agency guidelines.
  • Available statewide.
  • Both Regular and Affordable DAP are available.

Home Loans for Kentucky’s Military Veterans

Kentucky Housing Corporation (KHC) has $3 million available in Mortgage Revenue Bond (MRB), special funding, for active or non-active duty veterans at 2 percent interest rate, fixed for 30 years. This special funding program is available on a first-come, first-served basis starting Wednesday, September 6, 2017, with new reservations.​

Find a KHC-Approved Lender to Apply  

This homeownership program is targeted to:
  • Households whose gross annual income does not exceed $40,000.
  • An existing or new construction property (purchase price limit $130,000).
  • 620 minimum credit score.
  • FHA, VA, or RHS first mortgage options.
  • Households who include active duty or non-active duty veterans. Documentation may include but not limited to:
    • Leave and Earnings Statement (LES)
    • DD214 – Discharge from Active Duty
    • VA Award Letter
  • Must meet insuring agency guidelines.
  • Available statewide.
Down payment Assistance Programs (DAP) available up to $6,000. Qualifications apply.

How to Apply

For all KHC loans, a home buyer must apply through a KHC-approved lender. We partner with approved lenders across the state to provide you with the best mortgage loan options. By doing this, the buyer will know how much house they can afford based on income and debts. KHC’s loans are subject to certain restrictions that the lender will see if meet the qualifying guidelines. Additionally, the lender will be able to recommend any KHC down payment assistance for which you may qualify.
APR 3.058%  – based on $130,000 FHA loan at 2% interest rate.
 
 
So now your know! The max house payment you would qualify would be the $890, because it is the lowest payment of the two ratios.




Joel Lobb
Senior  Loan Officer
(NMLS#57916)
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.
 

Mortgage Tips


Mortgage Tips.

via Mortgage Tips.

 

Tips to ensure your mortgage closes smoothly:

Credit Cards / New debt: Once you have applied for a mortgage, do not apply for new debt or credit cards, even if you do not plan to use them until after settlement. When you buy a home, you will undoubtedly buy items for that home; please wait until after you own the home!

Review your credit report: Be proactive in the process by thoroughly reviewing your credit report with me at the beginning of the process and report any inaccurate or missing information so that we can address it accordingly. What is missing on your report today could show up later and derail your closing.

Save everything: Save all of your bank statements, paystubs and credit card statements from time of application until closing. We may need them.

Do not pack your financial papers: Keep all tax returns, W-2’s, paystubs, 1099’s, K-1’s, bank statements etc… in an accessible place – not in POD somewhere in Timbuktu. You never know what you may have to provide at the last minute with the new guidelines. Be prepared!

Gift Funds and Large deposits: Based on the new rules, we will need a more detailed paper trail on gift funds and large deposits that are not consistent with your normal deposit pattern. If you are receiving a gift, we will need to verify that you have received it and that the donor has the ability to give those funds. Large deposits will have to be sourced; be prepared to show and explain where that money came from. If it was from a bonus, have the check ready. If you sold a car, have the bill of sale and a copy of the title transfer.

Changing Jobs: This one may seem obvious, but if you are planning to change jobs during the loan process, please inform me ASAP. If you are forced to change jobs, inform me immediately. You will sign a final application at settlement. When you sign it, you will be verifying the information that it contains. Do not commit mortgage fraud.

Do not move cash around: Lenders must verify all funds for closing and the source of those funds. When you move those assets around, it creates a paper trail nightmare. The best practice is to leave everything where it is. Once we have verified all accounts and given you the ”ok” , then you can commence shuffling funds.

Finally, when in doubt, contact me to ask. Do not take any chances with the approval of your loan. If additional verification is required, it will in most cases, delay your closing.

— 

 
Joel Lobb
Senior  Loan Officer

(NMLS#57916)
 
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
 Fax:     (502) 327-9119
 
 Company ID #1364 | MB73346

 CONFIDEN