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
Acceptable Income and Job History for a Mortgage Loan Approval in Kentucky
Mortgage Underwriters must follow both DU 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 loans requires a 2 year history of working multiple jobs
Fannie Mae or Conventional loans 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
How to get approved for a Kentucky FHA, VA, USDA and Fannie Mae Mortgage loan with Variable Income
Variable INCOME if your borrower is not hourly at 40 hours a week or salary do you fall within VARIABLE INCOME?? Yup we all dislike that is calculated by an averaging method..
Examples of income of this type include income from hourly workers with fluctuating hours, or income that includes commissions, bonuses, or overtime.
History of Receipt: Two or more years of receipt of a particular type of variable income is recommended; however, variable income that has been received for 12 to 24 months may be considered as acceptable income, as long as the borrower’s loan application demonstrates that there are positive factors that reasonably offset the shorter income history.
Frequency of Payment: us as a lender must determine the frequency of the payment Examples:
If a borrower is paid an annual bonus on March 31st of each year, the amount of the March bonus should be divided by 12 to obtain an accurate calculation of the current monthly bonus amount.
Note that dividing the bonus received on March 31st by three months produces a much higher, INACCURATE monthly average.
If a borrower is paid overtime on a biweekly basis, the most recent paystub must be analyzed to determine that both the current overtime earnings for the period and the year-to-date overtime earnings are consistent and, if not, why.
There are legitimate reasons why these amounts may be inconsistent yet still eligible for use as qualifying income. For example, borrowers may have overtime income that is cyclical (transportation employees who operate snow plows in winter, package delivery service workers who work longer hours through the holidays).
We must investigate the difference between current period overtime and year-to-date earnings and document the analysis before using the income amount in the trending analysis.
Income Trending: After the monthly year-to-date income amount is calculated, it must be compared to prior years’ earnings using the borrower’s W-2’s or signed federal income tax returns (or a standard Verification of Employment completed by the employer or third-party employment verification vendor).
If the trend in the amount of income is stable or increasing, the income amount should be averaged.
If the trend was declining, but has since stabilized and there is no reason to believe that the borrower will not continue to be employed at the current level, the current, lower amount of variable income must be used.
If the trend is declining, the income may not be stable.
Additional analysis must be conducted to determine if any variable income should be used, but in no instance may it be averaged over the period when the declination occurred.
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/
— 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 factors influence how long it takes to repair your credit?
When a new client comes into our office to first go over their credit repair plan, they always ask the question, “How long will it take to bring my score back up?”
Of course, it’s an important thing to know, but the answer has a lot to do with a multitude of factors. The good news is that you can control most of these factors by employing a responsible and effective credit repair with Blue Water Credit. Together, we can make sure that we bring your FICO to top form as quickly as possible!
Before we dig into these factors, let’s take a look at what we do know for sure. According to Vantage Score, here are some general timelines for how long it typically takes to improve your credit score after certain events or items report. Of course, individual cases may vary.
Applying for new credit
Average recovery time: 3 months
Negative impact on your credit score: Light
Closing an existing account
Average recovery time: 3 months
Negative impact on your credit score: Light
Maxing out your credit card
Average recovery time: 3 months
Negative impact on your credit score: Medium
Missing payments/defaulting
Average recovery time: 18 months
Negative impact on your credit score: Heavy
Chapter 7 or 11 Bankruptcy
Average recovery time: 6-7 years
Negative impact on your credit score: Heavy
Here are some factors that help determine the timeframe for credit repair:
The severity of the damage
Of course, different negative items that hit your credit report hold different weight, lowering your score accordingly. For instance, one late payment on a credit card will ding your score far less than a collection, foreclosure, or bankruptcy. The bigger the damage to your score, the longer it may take to bring it back up to your previous high.
How you handle your credit repair (and WHO is handling it!)
Fixing your credit is all based on disputing negative items, duplicates, incorrect information, mistakes, and anything else that’s acting like an anchor. The process involves writing and submitting formal dispute letters, and you have to do that with each of the credit bureaus for each negative item you want to flag. Once those disputes are registered, the credit bureaus are mandated to get back to you within a certain timeframe, either with evidence that the credit item is accurate, or to remove it. Therefore, you need to be incredibly organized, diligent, and persistent when handling your credit repair in order for it to move as quickly and efficiently as possible. Too many people try to do it on their own, only to fall off very quickly and see no progress (or even hurt their credit more!) Using a reputable and established credit repair company like Blue Water Credit is the best path to a better credit score!
How many accounts you need to repair
If you have one negative account on your report, you’ll probably be able to repair your credit and improve your score much faster than if you have two, five, or even ten negative items to dispute. Not only is it more work, but we may have to resubmit dispute letters more than once for some accounts, which stretches out the timeline.
Your credit score when you start
The higher your score when the negative reporting hits, the more difficult it is to recover, and therefore takes longer.) FICO offers some useful information regarding how long it may take to rebuild your credit score based on where it started:
Late payment on mortgage
Starting score:
780 FICO 3-7 years
720 FICO 3 years
680 FICO 9 months
Short sale of home
Starting score:
780 FICO 7 years
720 FICO 7 years
680 FICO 3 years
Foreclosing on home
Starting score:
780 FICO 7 years
720 FICO 7 years
680 FICO 3 years
Chapter 7 or 11 Bankruptcy
Starting score:
780 FICO 7 to 10 years
720 FICO 7 to 10 years
680 FICO 5 years
Doing everything right during the process
You may think it goes without saying, but you’ll have to make manage your credit correctly during the repair process to avoid adding any other black marks on your report. For instance, you should pay all of your payments on time without fail and avoid maxing out credit cards or opening new accounts that may hurt you. Why is this so important? These days, identity theft, data hacks, and financial fraud affects about one out of every seven people, so you’ll want to monitor your credit and protect your score from sinking like a stone because of foul play.
Your ability (and desire) to pay down debt
Your credit utilization makes up about 30% of your FICO score, which is just the ratio of debt you owe versus your total available balance (second only to payment history at 35%). So, you should pay down your credit cards and revolving accounts, optimally to about 10% of your total balance if you want to improve your score (but at least below 30%). However, be careful not to pay off certain accounts completely, close older accounts that are helping you, or pay off collections – all of which will hurt your score.
Adding new positive tradelines
When we open some credit files, we see that consumers actually need more credit. Keeping a good mix of revolving, installment, and mortgage debts accounts for about 10% of your score, so we will advise you what you need to optimize that factor and improve your score as quickly as possible. Additionally, some people who have seen their score bottom out need to add new accounts using secured credit cards just to get started and become creditworthy again.
More Information below about Credit Scores and Qualifying for a Mortgage Loan in Kentucky below:
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
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
Examples of income of this type include income from hourly workers with fluctuating hours, or income that includes commissions, bonuses, or overtime.
Kentucky First-Time Homebuyer Loan Programs for FHA, VA, KHC and USDA Mortgage Loans in Kentucky 