Category: judgements

Here are action steps you can take right now to buy a home in Kentucky in 2024

If you’re planning to buy a home in Kentucky in 2024, here are some essential steps to consider:

1. Focus on improving your credit score to qualify for a mortgage with a low interest rate.
2. Manage your debt-to-income ratio by repaying existing debt, increasing your income, or both.
3. Ensure timely payments on all accounts to maintain a good credit score.
4. Get pre-approved for a mortgage before searching for a home to know your affordability.
5. Keep credit card utilization below 30% and seek down payment assistance programs if needed.


Here are action steps you can take right now to buy a home in Kentucky in 2024

1. Focus on your credit score

FICO credit scores are among the most frequently used credit scores, and range from 350-800 (the higher, the better). A consumer with a credit score of 750 or higher is considered to have excellent credit, while a consumer with a credit score below 620 is considered to have poor credit.

To qualify for a mortgage and get a low mortgage rate, your credit score matters.

Each credit bureau collects information on your credit history and develops a credit score that lenders use to assess your riskiness as a borrower. If you find an error, you should report it to the credit bureau immediately so that it can be corrected.

2. Manage your debt-to-income ratio

Many lenders evaluate your debt-to-income ratio when making credit decisions, which could impact the interest rate you receive.

A debt-to-income ratio is your monthly debt payments as a percentage of your monthly income. Lenders focus on this ratio to determine whether you have enough excess cash to cover your living expenses plus your debt obligations.

Since a debt-to-income ratio has two components (debt and income), the best way to lower your debt-to-income ratio is to:

  • repay existing debt;
  • earn more income; or
  • do both

3. Pay attention to your payments

Simply put, lenders want to lend to financially responsible borrowers.

Your payment history is one of the largest components of your credit score. To ensure on-time payments, set up autopay for all your accounts so the funds are directly debited each month.

FICO scores are weighted more heavily by recent payments so your future matters more than your past.

In particular, make sure to:

  • Pay off the balance if you have a delinquent payment
  • Don’t skip any payments
  • Make all payments on time

4. Get pre-approved for a mortgage before you start shopping for a home loan.

Too many people find their home and then get a mortgage.

Switch it.

Get pre-approved with a lender first. Then, you’ll know how much home you can afford.

To get pre-approved, lenders will look at your income, assets, credit profile and employment, among other documents.

5. Keep credit utilization low on your credit cards

Lenders also evaluate your credit card utilization, or your monthly credit card spending as a percentage of your credit limit.

Ideally, your credit utilization should be less than 30%. If you can keep it less than 10%, even better.

For example, if you have a $10,000 credit limit on your credit card and spent $3,000 this month, your credit utilization is 30%.

Here are some ways to manage your credit card utilization:

  • set up automatic balance alerts to monitor credit utilization
  • ask your lender to raise your credit limit (this may involve a hard credit pull so check with your lender first)
  • pay off your balance multiple times a month to reduce your credit utilization

6. Look for down payment assistance in Kentucky

There are various types of down payment assistance, even if you have student loans.

Here are a few:

  • FHA loans – federal loan through the Federal Housing Authority
  • USDA loans – zero down mortgages for rural and suburban homeowners
  • VA loans – if military service
  • Kentucky Housing Down Payment Assistance of $10,000

There are federal, state and local assistance programs as well so be on the look out.



If you want a personalized answer for your unique situation call, text, or email me or visit my website 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

email: kentuckyloan@gmail.com

https://kentuckyloan.blogspot.com

Kentucky FHA Loan Requirements for 2024

Originally posted on Kentucky FHA Mortgage Lender:
Kentucky FHA Loan Requirements The requirements for Kentucky FHA loans are set by HUD. Borrowers must have a steady employment history of the last two years within the same industry or line of work. Recent college graduates can use their transcripts to supplant the 2 year work history…


Kentucky FHA Loan Requirements for 2024 to include Credit Fico Scores, Down Payment, Income and Job history

FHA

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

  • FHA Guidelines

    FHA Mortgage Guidelines

  • 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)

Kentucky FHA Loan Requirements

Kentucky FHA Loan Requirements

The requirements for Kentucky FHA loans are set by HUD.

  • Borrowers must have a steady employment history of the last two years within the same industry or line of work. Recent college graduates can use their transcripts to supplant the 2-year work history rule as long as it makes sense.
  • Self-Employed will need a 2-year history of tax returns filed with IRS. They will take a 2-year average.
  • FHA requires a 3.5% down payment. Can be gifted from family member or from retirement savings plan, or money saved-up. Any type of cash deposits is not allowed for down payments. No exceptions to this rule!! This is one of the biggest issues I see in FHA underwriting nowadays.
  •  FHA loans are for primary residence occupancy. Not rental houses.
  • Borrowers must have a property appraisal from a FHA-approved appraiser.
  • Borrowers’ front-end ratio (mortgage payment plus HOA fees, property taxes, mortgage insurance, homeowners’ insurance) needs to be less than 31 percent of their gross income, typically. You may be able to get approved with as high a percentage as 43 percent. If the Automated Underwriting System gives you an Approved Eligible you can go higher on the debt ratios
  • Borrowers must have a minimum credit score of 580 for maximum financing with a 3.5% down payment
  • Borrowers must have a minimum credit score of 500-579 for maximum LTV of 90 percent with a minimum down payment of 10 percent. Most lenders will not go below 580 to 620 score, and very few lenders will go to 580 score. It’s best to work on getting your scores up before you apply or work with a loan officer to improve them.
  • 2 years removed from Chapter 7 is required with good pay history after bankruptcy
  • 1 year removed from Chapter 13 is okay with an excellent pay history with the Chapter 13 plan and permission from trustee. You will need to qualify with the Chapter 13 payment along with new house payment. Again, scores will play into your loan pre-approval.
  • Typically, borrowers must be three years out of foreclosure and have re-established good credit. Exceptions can be made if there were extenuating circumstances and you’ve improved your credit. If you were unable to sell your home because you had to move to a new area, this does not qualify as an exception to the three-year foreclosure guideline.



FHA 

Low Down Payment which can be 100% gift from family member or Grant Program
Seller can pay closing costs-Maximum 6% of purchase price
There is maximum mortgage amount for each county. Check FHA loan limit for your county.
Non-occupant co-signers are allowed on this program.
FHA Approved Condos-Single family home-2-4 unit properties, and PUDs are eligible.
Fast automated underwriting approval available. Also, the file can be manually underwritten by a live person to get loan approval if you do not receive approval through automated underwriting system.

FHA Foreclosure Program 

Must be HUD Owned property or FHA Foreclosure in HUD Participating Communities
$100 Down Payment than standard FHA program
580 minimum credit score
Single family, 1-4 unit properties, HUD approved condominiums, and PUDS eligible

https://youtu.be/-kZbDJVgwY8

2. Kentucky Housing Corporation Down Payment Assistance for 2024.

Kentucky Down payment assistance loans are available up to $10,000 for Mortgage

Down payment Assistance for Kentucky Homebuyers $10,000 Through KHC

KHC recognizes that down payments, closing costs, and prep​aids are stumbling blocks for many potential home buyers. We offer a special loan program to help with those. Your KHC-approved lender can help you apply.

Eligibility: Both first-time and repeat home buyers purchasing a single-family dwelling. Purchase price can be no more than $481,176. Applicant’s income must be within applicable secondary market limits in effect. If KHC’s Homebuyer Tax Credit is used, then household income must be under the Homebuyer Tax Credit income limits.

Mortgage Revenue Bond (MRB) First Mortgage Products
Eligibility: Must be a first-time home buyer, unless purchasing a single-family dwelling in a targeted county. Purchase price can be no more than $481,176. Gross annual household income must be within applicable limits in effect. All non-borrowing occupants age 18 or older must disclose income and complete Non- Borrowing Occupant Form.
KHC ELIGIBILITY AND CREDIT STANDARDS OVERVIEW (Not intended to be an all-inclusive list.)
Home Buyer Eligibility
•
KHC can help both first time and repeat home buyers statewide.
•
Must be a U.S. citizen or legal status to be in U.S.
•
Applicant’s income ONLY through Secondary Market.
•
Property must be the borrower’s principal residence.
•
Borrower cannot own any other residential property at time closing for all loans with MRB Funding.
•
Any Borrower that meets both the income and purchase price limit can have access to Down Payment Assistance.
Kentucky Housing Credit Standards
•
620 minimum credit score required for FHA, VA, & RHS.
•
660 minimum credit score required for Conventional.
•
Debt ratios: 40/50%
•
Collections in most cases do not need to be paid-off in full.
•
Bankruptcies and foreclosures must be discharged two to seven years.
•
Non-taxable income can be grossed-up.
Property Eligibility
•
Both new and existing property.
•
Both new & existing Manufactured Housing.
•
With RHS only new construction Manufactured housing is allowed.
•
Purchase price limit of $481,176 for Secondary Market, MRB Loans, and Tax Credit.
•
Full appraisal required on all KHC loans.
•
With Existing Property, VA is the only loan product that requires a termite inspection.
•
A termite soil treatment certificate is required on ALL new construction
Regular Down Payment Assistance Programs (DAP) Only home buyers obtaining a Kentucky Housing Corporation first mortgage are eligible for DAP funds.
Interest Rate with DAP applicable.
Eligible KHC Mortgages FHA, RHS, VA, HFA Preferred, & HFA Preferred Plus 80 Income Eligibility
Secondary Market or Mortgage Revenue Bond Property Eligibility New and Existing Properties
Borrower Eligibility First-time and Repeat Home Buyers Amount Up to $10,000
Not required to be at maximum LTV first mortgage amount Terms 3.75% amortized over 10 years Purchase Price Limit $481,176 AUS
Borrower must qualify with additional monthly payment.
With AUS approval, can go up to 40/50% with all loans.
Required Repairs Buyer or seller must use OWN funds to pay for repairs DAP

Mortgage Revenue Bonds (MRB)

FHA
VA
RH​​S

​​​​

​​​​​Secondary Market Funding Source

  • First-time and repeat homebuyers statewide
  • 30-year fixed interest rate
  • Principal residence ONLY
  • Purchase Price Limit:  $481,176
  • Borrower must meet KHC’s Secondary Market Income Limits
Conventional Preferred ​Program
Conventional Preferred Plus 80
FHA
VA
RH​​S

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

 NMLS Consumer Access for Joel Lobb 

Privacy Policy

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#57916

— 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.

http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu

Kentucky FHA Mortgage Lender

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Kentucky FHA Loan Requirements

The requirements for Kentucky FHA loans are set by HUD.

  • Borrowers must have a steady employment history of the last two years within the same industry or line of work. Recent college graduates can use their transcripts to supplant the 2 year work history rule as long as it makes sense.
  • Self-Employed will need a 2 year history of tax returns filed with IRS. They will take a 2 year average.
  • FHA requires a 3.5% down payment. Can be gifted from family member or from retirement savings plan, or money saved-up. Any type of cash deposits are not allowed for down payments. No exceptions to this rule!! This is one of the biggest issues I see in FHA underwriting nowadays.
  •  FHA loans are  for primary residence occupancy. Not rental houses.
  • Borrowers must have a property appraisal from a FHA-approved appraiser.
  • Borrowers’ front-end ratio (mortgage payment plus HOA fees…

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Kentucky Mortgage Terms to Know


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.

FHA eases mortgage rules for some credit-impaired applicants for collections and charge offs


Wholesale-Mortgage-Source-Home-Purchase

FHA Collection Accounts
• A Collection Account refers to a Borrower’s loan or debt that
has been submitted to a collection agency by a creditor.
• Medical Collections are not required to be paid and satisfied.
• Collection accounts of a non-borrowing spouse in a
community property state must be included in the $2,000
cumulative balance and analyzed as part of the Borrower’s
ability to pay all collection accounts, unless specifically
excluded by state law.

If the credit reports used in the analysis show a cumulative
outstanding collection account balances of $2,000 or greater,
the Mortgagee must:
• Verify that the debt is paid in full at the time of or prior to
settlement using an acceptable source of funds;
• Verify that the Borrower has made payment arrangements with the
creditor and include the monthly payment in the Borrower’s DTI; or
• If a payment arrangement is not available, calculate the monthly
payment using 5 percent of the outstanding balance of each
collection and include the monthly payment in the Borrower’s DTI
ratio.

Collection Accounts: Documentation
• The Mortgagee must provide the following documentation:
– Evidence of payment in full, if paid prior to settlement; or
– The payoff statement, if paid at settlement; or
– The payment arrangement with creditor, if not paid prior to or
at settlement.
• If the collection account is to be paid off, the Mortgagee must
document that the funds being used for the pay off come
from an acceptable source.
• If the Mortgagee uses 5 percent of the outstanding balance,
no documentation is required.

Charge Off Accounts
• A Charge Off Account refers to a Borrower’s loan or debt that
has been written off by the creditor.
• Charge off accounts do not need to be included in the
Borrower’s liabilities or debt.

Additional Required Documentation for
Collection and Charge Off Accounts
• Mortgagee must determine if collection account was due to:
– The Borrower’s disregard for financial obligations;
– The Borrower’s inability to manage debt; or
– Extenuating circumstances.
• Mortgagee must document reasons for approving a mortgage
when the Borrower has any outstanding collection accounts.
This includes medical collections.
• Borrower must provide a letter of explanation, which is
supported by documentation, for each outstanding collection
account. This includes medical collections.

http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu
 
Joel Lobb (NMLS#57916)
Senior  Loan Officer
 
American Mortgage Solutions, Inc.
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.