Category: tax returns mortgage

Popular Kentucky Mortgage Terms To Know


I know the mortgage process can be confusing, so I thought I’d shed some light on what some of the acronyms in the mortgage world mean.

LTV
LTV stands for Loan to Value Ratio.  It represents the amount of money borrowed divided by the purchase price of the home.  For example, if you borrow $400,000 on a house with a purchase price of $500,000, the loan to value ratio or LTV is 80%.  Different loan programs have different maximum LTV standards.  

DTI
DTI Stands for Debt to Income Ratio. It represents a borrower’s monthly debts divided by their monthly gross inome.  It is a calculation used by banks to determine how much money an applicant is qualified to borrow. Different loan programs have different maximum DTI ratios.

PMI or MIP
Private Mortgage Insurance or PMI protects the lender in case the borrower defaults on a loan.  PMI is required on Conventional loans in which the borrower has a down payment of less than 20%. It is either paid upfront at closing in a lump sum or on a nonthly basis with your mortgage payment.

MIP or Mortgage Insurance Premium is required with all FHA loans also to protect the lender against default by the borrower.  MIP is required on all FHA loans regardless of loan to value ratio because the guidelines on FHA loans are less strict than on conventional loans.  There is a one time up-front MIP payment and a monthly MI payment with FHA loans

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Self-Employed Guidelines for Getting a Mortgage Approved In Kentucky


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Self Employed Income Guidelines for a Getting a Kentucky Government FHA, VA, USDA Mortgage Loan in Kentucky
  • 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:
  • Sole Proprietorships
  • Corporations
  • Limited Liability Company (LLC)
  • Partnerships
Notes:
  • 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 or 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.

 

—

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