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

Self-Employed with Income and Getting Approved for a Home Mortgage Loan in Kentucky?


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Self Employed Income for FHA, VA, USDA and KHC Mortgage Loans Guidelines
 
• A borrower is considered self employed if they have 25% or more ownership in a business.
 
• Contract or 1099 employees are self employed borrowers
 
• There are 4 types of self employed business structures
o  Sole Proprietorships
o  Corporations
o  Limited Liability Company (LLC)
o  Partnerships
 
Tax Returns are always required for a self employed borrower.  Depending on the business structure, the borrower may have business returns in addition to their personal tax returns.
 
1099, Sole Proprietorships, and LLC self employed borrowers typically file Schedule C on their personal tax returns
 
Corporations and Partnerships will file Business Tax Returns in addition to their personal returns.  The business returns will include K1’s listing the borrower’s ordinary business income and percentage of ownership.
 
Corporation and Partnerships may also have W2 income in addition to their K1’s.
 
All self employed income is calculated per agency guidelines
 
Self employed income requires a 2 year history. 
 
Declining self employed income typically cannot be used unless allowed by specific agency of loan program
http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu
 
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

http://www.nmlsconsumeraccess.org/
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/
 
— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.

What kind of income is allowed and needed for a FHA, VA, USDA and Fannie Mae Mortgage Loan Approval in Kentucky?


Income and your job history  plays a significant role when applying for a mortgage loan and getting approved for one for Kentucky Homebuyers . Mortgage Underwriters from FHA, VA, USDA and Fannie Mae  must follow both Fannie Mae  and agency guidelines when it comes to documenting and calculating qualifying income for a loan transaction. Income guidelines may vary slightly depending on the loan program and the borrower’s employment profile. Below are some general tips for W2 income.
Documentation that may be required
  • Paystub with year to date gross earnings
  • At least 1 year’s W2
  • Verbal or full VOE
Base Pay
  • Salaried and fixed hourly income is calculated by averaging the gross year to date income
  • Variable hourly income is calculated by averaging 12 month history
  • Commission and tip income is calculated by averaging over 24 months
  • No transcripts are required for salaried, hourly, or less than 25% commission W2 income borrowers
  • Unreimbursed expenses do not have to be deducted from the gross pay for salaried, hourly, or less than 25% commission W2 borrowers
Overtime, and Bonus Income
  • Overtime and Bonus can be used as effective income as long as it’s been received for 2 years and is reasonably likely to continue
  • Periods of less than 2 years may be considered as long as it’s been consistently earned over a period of at least 12 months and there are positive factors to offset the shorter history of receipt per underwriter discretion
  • Overtime and Bonus income must be documented by a full VOE
  • Declining overtime and bonus income cannot be used for qualifying income
Part Time Income
  • FHA requires a 2 year history of working multiple jobs
  • Fannie will allow less than 2 years as long as it’s been consistently earned over a period of at least 12 months and there are positive factors to offset the shorter history of receipt per underwriter discretion

 

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916
American Mortgage Solutions, Inc.
Company NMLS ID #1364
Text/call:      502-905-3708
fax:            502-327-9119
email:
          kentuckyloan@gmail.com
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.

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 approvalnor 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).

 

 

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