A Kentucky Mortgage Loan Officer that has closed over 600 home loans specializing in Kentucky First Time Homebuyer Loans to include the following FHA, VA, USDA, Rural Housing, Down Payment Assistance Loan from Kentucky Housing Corp or KHC and the Fannie Mae Home Path HUD $100 Down Mortgage Program in Kentucky. Call/Text 502-905-3708 with your mortgage questions or email kentuckyloan@gmail.com I try to respond to all requests within minutes during regular business hours. NMLS# 57916 Joel Lobb Loan Originator, American Mortgage Solutions NMLS ID. 1364 Equal Housing Lender
Qualifying for a mortgage loan in Kentucky involves understanding the various loan options, meeting credit score requirements, and navigating down payment assistance programs. Here’s a comprehensive guide to help you through the process.
Understanding Kentucky Mortgage Options
Kentucky offers several mortgage options tailored to different financial situations:
Glossary of Mortgage Terms to Know For A Kentucky Mortgage Loan.
ACCRUED INTEREST: Accumulated interest since the principal investment that has not yet been paid. AMORTIZATION: Paying off debt, principal and interest, with a fixed repayment schedule in regular installments over a fixed period of time. ANNUAL PERCENTAGE RATE (APR): The annual rate charged for borrowing money expressed as a percentage. APR takes into account interest, discount points, lender fees and mortgage insurance. APPLICATION FEE: A fee charged by a lender to cover the initial costs of processing a loan application. APPRAISAL: A written estimate of a property’s current market value, based on the current condition of the property and recent sales information from similar properties in the same area. APPRAISAL FEE: The cost to have a licensed, certified appraiser estimate the market value of a property as of a specific date. BORROWER: An individual who receives a loan from a lender with the intention of repaying the loan in full over the agreed upon time-frame. CAP: A limit on the amount the interest rate can increase or decrease for an ARM, either in an adjustment period or over the life of the loan. CERTIFICATE OF ELIGIBILITY: A document given to qualified veterans entitling them to a VA loan. Obtained by sending DD-214 (Separation Paper) to the local VA office with VA form 1880 (request for Certificate of Eligibility). CERTIFICATE OF REASONABLE VALUE (CRV): An appraisal issued by the VA. CLOSING: Also called “settlement,” is when all parties in a mortgage loan transaction sign the necessary documents to legally transfer property and funds. CLOSING COSTS: Expenses incurred during the home purchase or refinance process that are paid at closing, including the loan origination fee, discount points, attorney’s fees, title insurance, appraisals, etc. CLOSING DISCLOSURE (CD): A five-page document listing final details about the mortgage such as loan terms, projected monthly payments and total closing costs. COMMITMENT LETTER: A legal document issued to a loan applicant from the lender to provide them with a mortgage under certain terms and conditions. COMPARABLES: An abbreviation for “comparable properties;” recently sold properties with similar characteristics and location to the subject property that help the appraiser determine the fair market value of the subject property. CONVENTIONAL LOAN: A loan not secured by the U.S. government, such as FHA, VA, or USDA. DEBT-TO-INCOME RATIO (DTI): A percentage of an individual’s debt, measured by dividing total monthly recurring debt payments by gross monthly income. DEED: A written legal document showing who owns a particular property. This must be signed to transfer a property’s ownership rights to a new homeowner. DEPARTMENT OF VETERANS AFFAIRS (VA): A government agency that manages benefits and other services for eligible veterans of the military. DOWN PAYMENT: The upfront money paid to purchase a home. It is deducted from the total amount of a mortgage and represents the beginning equity.
EARNEST MONEY: A security deposit made by a buyer to a seller to demonstrate that the buyer is serious and willing to purchase the property. EQUAL CREDIT OPPORTUNITY ACT (ECOA): Federal law enacted in 1974 making it unlawful for any creditor to discriminate based on race, color, religion, national origin, age, sex, marital status or receipt of income from public assistance programs. EQUITY: The portion of a property that homeowner owns. Equity is the difference between the home’s fair market value and the outstanding balance of the mortgage on the property. ESCROW: A third party that holds money to ensure pay property taxes, homeowner’s insurance or mortgage insurance is paid on time. HAZARD INSURANCE (HOMEOWNER’S INSURANCE): Protects a homeowner against loss due to fire or other natural disasters in exchange for a premium paid to the insurer. HOMEOWNERS ASSOCIATION (HOA): An organized group of owners, usually found in condominiums or closed communities, who manage the common areas and enforce rules. INTEREST RATE: The amount charged to borrow money from a lender, expressed as a percentage of the principal loan. LOAN ESTIMATE (LE): A three-page document that explains the important details about a borrower’s loan, including the estimated interest rate, monthly payment and total closing costs for the loan. The LE will be provided within three business days of the lender receiving the loan application. LOAN-TO-VALUE RATIO (LTV): The percentage of the loan amount to the appraised value of the property. LOCK-IN RATE: An offer by a lender to guarantee an interest rate for a set period of time. MARKET VALUE: Also called “home value;” the amount for which a house will likely sell. MORTGAGE INSURANCE (MI): Insurance that protects the lender if a borrower defaults on their mortgage loan. MI is usually required if the down payment is less than 20% of the purchase price. ORIGINATION FEE: A fee charged by a lender to cover the administrative costs of processing a loan. PREPAYMENT: An advanced principal payment prior to the due date, thus saving money on interest. PREPAYMENT PENALTY: A fee charged to borrowers for paying ahead on their mortgage. PRINCIPAL: Outstanding loan balance still owed to the lender, not including interest. REALTOR: A licensed real estate professional who represents a buyer or seller in a real estate transaction in exchange for a commission; a member of the National Association of Realtors. REAL ESTATE SETTLEMENT PROCEDURES ACT (RESPA): A federal law requiring lenders to provide disclosures to borrowers informing them of loan settlement costs. These guidelines provide acceptable practices and fees in real estate transactions. SECOND MORTGAGE: An additional mortgage, or lien, placed on a property with subordinate rights to the first mortgage. TERM: The period of time that covers the life of the loan, usually in years. TITLE: A document that indicates ownership of a property, as well as rights of ownership and possession of the property. TITLE INSURANCE: Insurance that protects the lender (lender’s policy) or the buyer (owner’s policy) against loss due to disputes over property ownership.
There are several alternative mortgage options available if you don’t have a down payment, haven’t established a strong credit history, or are unable to supply documentation for a “traditional” mortgage. Some options include:
DOWN PAYMENT ASSISTANCE (DPA) by KHC
These programs often come from states and municipalities allowing you to purchase a home with a smaller down payment. Many DPA programs come in the form of a repayable second mortgage or a deferred or forgiven grant
Kentucky FHA (FEDERAL HOUSING ADMINISTRATION)
An FHA loan is insured by the Federal Housing Administration and is ideal for low- or moderate-income individuals or families, or borrowers with past credit problems or limited down payment resources.
FHA loans are popular for Kentucky first-time home buyers because they offer down payment options as low as 3.5% and an upfront Mortgage Insurance Premium (MIP) financed into your loan amount. 100% of the money needed at closing is allowed to be a gift.
FHA also allows a “streamline” refinance when rates go down to lower your interest rate.
Kentucky VA (VETERAN’S ADMINISTRATION)
If you have served or are currently serving in the U.S. military, we thank you for your service! The VA loan program offers low rates and low- or no-money-down payment options. VA loans do not require mortgage insurance, and also offer a low-cost Interest Rate Reduction Loan (IRRL) program allowing you to refinance and lower your mortgage payment. The maximum VA loan amount varies, so check with your Mortgage Professional for up-to-date information.
Kentucky USDA Mortgage Loans
If you plan to live in a more rural area, the USDA (United States Department of Agriculture) has a variety of loans to help low- or moderate income individuals and families buy, repair or renovate a home. USDA loans often carry lower interest rates and do not require a cash down payment. Not all properties qualify, so check with your
KENTUCKY HOME PURCHASE DOCUMENT CHECKLIST
l. INCOME SALARY/HOURLY Most recent 30 days of pay stubs Last 2 years of W2s Most recent tax return (pages 1 and 2) SELF EMPLOYED (all schedules) 2 years personal tax returns 2 years business tax returns P&L and balance sheet through most recent quarter (FHA & Jumbo required) OTHER (Social Security/Pension/Annuity) 2 years 1099s Awards letter
ASSETS (every page)
Most recent 2 months bank statements Most recent quarterly statement for 401K, Retirement, Profit Sharing accounts
PROPERTY
Purchase Contract: disclosures, addendums,
copy of Earnest Money check
Homeowner’s Insurance: Agent name and
MISCELLANEOUS (if applicable) Divorce Decree *These documents may Child support order upon receipt of fully ex Bankruptcy documents with discharge VA: Certificate of Eligibility (COE) / DD-214 Papers OTHER PROPERTIES OWNED: Mortgage Statement Proof of Insurance Proof of any association fees
GIFT LETTER: Evidence of transfer/deposit (Conventional) Evidence of transfer/deposit and document donor ability to gift (FHA)
THE 8 STEPS OF HOMEOWNERSHIP There are several events that will occur throughout your new home purchase process. This guide will help you fully understand the process to eliminate stress:
Save for Down Payment & Credit Scores
Apply for Pre-Approval
Determine Housing Criteria & Neighborhood
Hire an Agent & Start Your Home Search
Complete the Loan Application
Move Through the Loan Process
Set a Closing Date
Understand Monthly Mortgage Payments STEP 1: SAVE FOR DOWN PAYMENT & CREDIT SCORES Buying a home requires some upfront cash, including your down payment and closing costs. Financial experts typically recommend a down payment of 20% of the purchase price. However, you can purchase a home with a down payment as little as 0-3% of the purchase price. While you’re working on saving for your down payment, keep an eye on your credit score. Your credit score is a number that indicates how much of a credit risk you pose when you borrow money and helps determine your interest rate. Typically, the higher your score, the lower your rate. There are three different credit scores agencies: Equifax (BEACON), Experian (FICO Risk Model), and TransUnion (FICO Risk Score, Classic). Credit scores range from 300-850. Each credit reporting agency gives you different scores, but all three should be pretty similar. Your credit score is divided into five factors: 10% 10% 35% Payment History……………………………………………………. 35% Amounts Owed……………………………………………………… 30% Length of Credit History………………………………………. 15% Inquiries……………………………………………………………………. 10% Type of Credit Used………………………………………………. 10% 15% 30% Often, when you’re shopping for a mortgage, you may look for the best rate from multiple lenders. Each lender may pull your credit report which is typically bad for your score. However, credit reporting agencies distinguish a single loan search from a search for many new credit lines by the length of time the inquiries occur. Avoid lowering your score by completing your rate shopping within a short period of time, such as 14 days.
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
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.
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#57916http://www.nmlsconsumeraccess.org/
Joel Lobb, American Mortgage Solutions (Statewide)
Joel has worked with KHC for 12 of his 20 years in the mortgage lending business. Joel said, “A lot of my clients would not have been able to purchase a home of their own or possibly delayed their purchase due to lack of down payment but with the $6,000 DAP loan program, this gets them into a house sooner and starts their path to homeownership while building equity instead of throwing their money away.”
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 First-Time Homebuyer Loan Programs for FHA, VA, KHC and USDA Mortgage Loans in Kentucky 