Kentucky Mortgage Loan Info in regards to Credit Score, Down payments and debt to income ratios.


Loan Info in regards to Credit Score, Down payments and debt to income ratios.

 

Here are a few Kentucky mortgage misconceptions in regards to qualifying for a Mortgage loan in 2020

Credit Score Myth For Kentucky Mortgage Loans

53% of people surveyed believe they need a minimum credit score of 650 to qualify for a mortgage.

 

Credit Score Facts For Kentucky Mortgage Loans

There are many loan programs available for credit scores as low as 580 for government backed loans like FHA, VA, and USDA.

Down Payment Myths for Kentucky Mortgage Loans

The minimum down payment required is 3% (or even 20%).

 

Down Payment Fact

Many loan programs, including conventional loans, are available with down payments as low as 3%. USDA, VA, and Kentucky Housing Corp with their down payment assistance offer zero down payment options. 

Debt-to-Income Myths for Kentucky Mortgage Loans

Most people think 40 to 45%% (percent of your monthly income that goes to debt payments) is the max.

 

Debt-to-Income Fact

Lenders may accept higher ratios depending on things like credit score and down payment amount. FHA and VA will allow over 50% debt to income ratios on the back-end, but Conventional and USDA restrict their back-end debt to income ratios to 45% or less.

 

Think back to the last time you financed a purchase — be it a home, automobile, or what have you… You may remember having heard the term “debt-to-income ratio.” Today I want to spend some time going over exactly what this ratio is, and to also touch on how it can effect your personal finances.

What is your debt-to-income ratio?

Commonly referred to as your “DTI,” your debt-to-income ratio is a personal finance benchmark that relates your monthly debt payments to your monthly gross income.
As an example… Let’s say that your gross monthly salary is $5,000 and you are spending $2,800 of it toward monthly debt payments. In that case, your DTI would be an unhealthy 56%.
This version of your DTI is sometimes referred to as your “back-end” DTI. This is often broken down further to give a front-end debt-to-income ratio, which is a component of your back-end DTI.

How to calculate your front-end DTI for a Kentucky Mortgage Loan Approval

Your front-end DTI is calculated by dividing your monthly housing costs by your monthly gross income. Front-end DTI for renters is simply the amount paid in rent, whereas for homeowners it is the sum of mortgage principal, interest, property taxes, and home insurance (i.e., your PITI) divided by gross monthly income.
From above, if that $2,800 in debt payments is attributable to $1,500 in housing costs and $1,300 in non-housing costs, then your front-end DTI is $1,500/$5,000 = 30% (and your back-end ratio is still 56%, as calculated above).

How lenders use your DTI for a Kentucky Mortgage Loan Approval

Kentucky Mortgage lenders typically use DTI (along with other variables) to determine whether or not you qualify for a loan, and to help determine your Kentucky mortgage rate. A high front-end DTI raises red flags with lenders because it is commonly associated with borrower default. In fact, reducing front-end DTI to reduce the risk of homeowner default was one of the main objectives of the loan modification programs introduced by the government in 2009.
There are specific limits for DTI that are used as cut-off points when evaluating borrowers. Current DTI limits for conventional conforming mortgage loans are typically 28% on the front end and 36% on the back end, though these limits are slightly higher for government subsidized Kentucky FHA loans.
While there are certainly other factors to consider
Acceptable Ratios
Housing Debt to Income
Conventional 28% 41-50%
FHA 29% 41-56.5%
VA
USDA/RHS
KHC 
29%
29%
40%
41-65%
41-45%
50%
Higher ratios may be accepted with compensating factors: low loan value, large cash reserves after closing, high credit scores, etc,

 

The bottom line: When it comes to home loans, one size definitely does not fit all, and it can be hard to determine what’s best for your situation on your own. Speaking to a mortgage professional about your unique circumstances is usually your best bet.

Ready to get started? Contact us at 502-905-3708.

 

 

 

A Complete Guide to Closing Costs in Kentucky


Who  pays Closing costs in Kentucky?

How much is closing Costs in Kentucky?

A Complete Guide to Closing Costs.

closing costs in Kentucky
closing costs in Kentucky

 Complete Guide to Closing Costs in Kentucky

A Complete Guide to Closing Costs

Types of Closing Costs

Let’s talk briefly about the types of closing costs you might encounter and how much those costs tend to run. Understand that closing costs, especially tax-related costs, will vary widely depending on where you live. But some costs can be estimated based on national averages.
Also, you should know that with fluctuations in the real estate market, closing costs are also fluctuating. A 2012 US News article pointed out that closing costs dropped 7 percent over 2011-2012 to an average of about $3,754.
The drops are, in part, because of 2010 regulations that were put in place by the government to shield homebuyers from “closing cost sticker shock.” Now that lenders are better at estimating final closing costs, those costs are dropping naturally.
Still, the national average for closing costs is nearly $4,000, which isn’t pocket change for your average homebuyer. So where’s all that money going? Here are some of the closing costs you might have to pay, along with average costs, based on the Allstate Home Buyers Closing Cost Worksheet.
  • Mortgage Application FeeThis fee varies from lender to lender but usually is $200-$400. You don’t have to pay this fee when you’re shopping around for a mortgage, but you’ll probably pay it when your chosen lender is processing your application. Sometimes this fee is due ahead of closing.
  • Appraisal Fee: This fee can sometimes be paid by the seller but is normally paid by the buyer. Basically, the fee goes to a professional appraiser who will ensure that the bank isn’t lending you more money than a property is worth. It’ll cost $100-$400.
  • Building InspectionIf you need to hire a home, pest or other specialized inspector, you’ll have to pay the fee. Some lenders will require an inspection to make sure the property is in good condition. This fee runs $150-$400 on average.
  • Survey: This is a fee you’re likely to skip, though it’s required by commercial lenders. It is for a surveyor to check out the lot and the structures on it to ensure the boundaries are properly noted. It can cost $300-$450.
  • Legal FeesAlthough attorney fees will add extra to your bill, you may want to pay a professional to ensure that all the documentation for your home is in order. Some lenders will bring along their own attorney, but yours will ensure that your personal interests are protected. Legal fees can run $300-$600, depending on your attorney and what you’re requiring of him or her.
  • Title Search and Insurance: A title insurance company will ensure that the title to the home is free and clear — that no one else will have claims on it. Sometimes a title search is separate from title insurance and will cost $150-$200. Title insurance varies but is usually about 1 percent of the home price.
  • Private Mortgage Insurance (PMI): If you put less than 20 percent down on your home, you’ll likely have to pay PMI. The average PMI premium is 2.5 percent of the mortgage, though your premium will vary depending on the value of your home, your credit score and your down payment. If you need PMI, you’ll likely have to pay a portion of the premium at closing. (Note: If you’re getting an FHA, VA or RHS government-backed loan, you’ll pay something like PMI, but it will be paid to the guarantor.)
  • Homeowners InsuranceAll lenders will require that you carry homeowners insurance on a property as long as it’s mortgaged. Typically, you’ll have to pay the first year’s property insurance premium in advance. Sometimes you’ll pay the insurer directly, but other times you’ll pay at closing.
  • Prepaid Interest: This one can get a little complicated. Let’s say your mortgage payment is due on the 1st of every month, but you close on your new home on the 15th. If this is the case, the lender will calculate the interest you owe for those 15-16 days remaining in the month, and that interest payment will be due at closing. Sometimes the seller reimburses these costs, since it’s often in his or her best interest to close as soon as possible — before your first mortgage payment is due. These costs will depend on your mortgage amount, interest rate and the time between closing and your first payment coming due.
  • Points: Points are another form of prepaid interest, but they’re generally not required. You can pay, usually, from 0-4 points on your mortgage. One point equals 1 percent of the total mortgage principal. (If you’re taking out a $100,000 loan, a point is $1,000, for instance.) One point usually reduces your interest rate by 1/8 percent. If you choose to pay points (rather than increasing your down payment), you’ll do so at closing.
  • Escrow Fees: The majority of homeowners use an escrow system for paying real estate taxes, fire and flood insurance, homeowners insurance and PMI. The escrow account is held either by a third party or by your lender, depending on your circumstances, and it’s used to pay all of the annual or monthly premiums for these important homeownership-related items. When you close on your home, you’ll generally need to put around three months’ worth of escrowed fees in the account.
  • Realty Transfer Tax: The taxes you pay on transferring a property are similar to the taxes you pay when you buy a new (or new-to-you) vehicle. Taxes vary by your state and municipality.
  • Recording Fees: Your local government will have to record the purchase transaction of your new home, which will cost $40-$60, on average.
  • Prorated Expenses: Some of the lump-sum costs associated with your home — water bills, homeowner association fees, condominium fees, etc. — could be split between you and the seller during your transaction. If you buy a home midway through the year, for instance, you may need to pay 50 percent of these fees. These expenses will depend on when you buy your home and are often negotiable with the seller

 —

 

– See more at: http://www.doughroller.net/mortgages/a-complete-guide-to-closing-costs/#sthash.76LyGU4d.dpuf

Ways to Pay Closing Costs

There are several ways to pay closing costs. Start by getting a Good Faith Estimate and then figure out which option will work best for you.

Good Faith Estimate

According to the Federal Reserve, the Real Estate Settlement Procedures Act requires that a lender give you a “good faith estimate” of your closing costs within three business days of your submitting your loan application.
Basically, the Good Faith Estimate (GFE) is part of shopping around for a mortgage. Because different lenders will have different requirements, closing costs can vary widely. So before you choose a mortgage, carefully look over the GFE to find differences between lenders.
While federal regulations aiming for more transparency in home lending have made good faith estimates somewhat more accurate, you have to remember that it’s still an estimate.
Saving for closing costs is a “hope for the best, plan for the worst” situation. Try to figure out the most you’d have to pay in closing costs and be prepared to pay them (while still leaving some cash in reserves). But you should also find the best lender for your needs and reduce closing costs as much as possible.

Pay in cash

The easiest way to pay closing costs, of course, is cash. If you have enough money in savings to pay for your down payment and your closing costs and to have cash in reserves, this is often the best option.
Paying more closing costs keeps you from taking out a bigger loan and can save you money on mortgage interest, which may save you a fortune over the life of your loan.

Roll it into the mortgage

If you don’t have plenty of cash on hand, you can roll your closing costs into your mortgage. Because closing costs are generally a small amount of money compared with your overall mortgage, most lenders don’t mind rolling part or all of the closing costs into the loan.
However, you do have to be careful because rolling your closing costs into your mortgage may mean you can’t spend as much money on a house. For instance, if, based on your credit, your lender agrees to finance up to 90 percent of the value of a $150,000 home, they may not go over that loan-to-value ratio, even to roll in closing costs.
In this scenario, say you’ve agreed to put $15,000 (10 percent) down on a home worth $150,000. Your lender agrees to finance 90 percent of the home’s value, leaving a $135,000 mortgage. If you don’t have cash for the $5,000 in closing costs, you could ask the lender to roll that into your loan, making your mortgage $140,000.
But if the lender isn’t comfortable financing 95 percent of the home’s value (a very high loan-to-value ratio in the world of home lending), you may be out of luck. In this case, you might have to find a cheaper home so that you can pay a smaller down payment and have money left for closing costs.
One thing to note: many government-backed loans, like the FHA and VA loans, are set up specifically for first-time or lower-income home buyers, who often have trouble saving for a down payment and closing costs. Because of this, it’s common for these loans to roll closing costs into the mortgage and to finance even above 95 percent of the home’s value.

Ask the seller to pay some costs

This is easier to accomplish in a sluggish housing market, or any time the seller is ready to get out of the home ASAP. In some cases, the seller will take part of the closing costs out of the money they’re getting when they sell the home.
If you don’t have money to pay closing costs, this is a good way to save money without increasing your loan (and, thus, your monthly mortgage payments). And what’s the worst that can happen? The seller may just say no.

Ask the lender to pay closing costs

Sometimes a lender will pay your closing costs, even if they don’t roll them into your mortgage. For instance, your lender might just outright pay $4,000 toward your closing costs but then raise the interest rate on your loan by 0.25 percent or more. (They’re not in the habit of giving away free money, after all.)
You’ll need to make sure this doesn’t come back to bite you. Figure out how much that extra interest will cost you over the life of your loan, or at least the length of time you plan to be in the home, and see if this is a reasonable approach for you.

Borrow for your closing costs

Taking out a separate loan for a down payment is usually a no-no. Your main lender wants to be the only one to have a claim on your home if you should default.
However, you could take out an unsecured loan to cover closing costs. Just be careful here, as interest rates could really bite on a personal unsecured loan.

Find Out How Much to Expect in Closing Costs

That’s a lot of information, and, unfortunately, it doesn’t tell you exactly how much you’ll pay in closing costs. You may not know exact closing costs until you’re ready to close on your home, but you can get a good idea of these costs online by using these resources:
  • SmartClosing Calculator – This calculator from Zillow will calculate costs based on where you’re buying a home, so taxes and government fees will be added in. The calculator will also show you the total amount you can expect to pay in mortgage payments, including real estate taxes and homeowner’s insurance.
  • Federal Reserve Settlement Costs Worksheet – This worksheet is good for comparing potential mortgage. It lets you compare the closing costs for two loans.
  • How do closing costs impact my interest rate? – This calculator from Yahoo! Homes will show you how financing closing costs, as opposed to paying them in cash, will affect your mortgage’s interest rate.

 

Call or text me at 502-905-3708 or email me at kentuckyloan@gmail.com NMLS#57916 Kentucky Mortgage Loan Only!

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
 
 

 

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). Mortgage loans only offered in Kentucky.

Kentucky Homebuyers Down Payment Grants for 2020


List of  Kentucky Homebuyers Down Payment Grants for 2020

 

 

 

 Kentucky Housing Corporation Down Payment Assistance for 2020.

 

Down Payment Closing Cost Assistance

KHC recognizes that down payments, closing costs, and prep​aids are stumbling blocks for many potential home buyers. Here are several loan programs to help. Your KHC-approved lender can help you apply for the program that meets your need.

Regular DAP

  • Purchase price up to $314,827 with Secondary Market.
  • Assistance in the form of a loan up to $6,000 in $100 increments.
  • Repayable over a ten-year term at 5.50 percent.
  • Available to all KHC first-mortgage loan recipients.

Affordable DAP

  • Purchase price up to $314,827 with Secondary Market.
  • Assistance up to $6,000.
  • Repayable over a ten-year term at 1.00 percent.
  • Borrowers must meet Affordable DAP income limits.

 

 

KHC is used for mostly applicants in urban areas of Kentucky that don’t have access to USDA or other government agencies to buy a home with no down payment.

A minimum of 3.5% down payment is required with this loan. Down payment assistance loans are available from $4500-$6,000, and are paid back over a period of ten years. They are typically offered to buyers with limited cash reserves and carry an interest rate of 1 to 5.5%. These loans can make a critical difference to buyers for whom the down payment is an obstacle. Buyers whose 3.5% down payment is less than the $6000 limit may choose to use the remainder of a down payment loan to pay closing costs, further reducing the amount needed to bring to closing.

 

 Welcome Home $5000 Grant for Kentucky Homebuyers 2020

The Federal Home Loan Bank of Cincinnati (FHLB Cincinnati) has established a set-aside of Affordable Housing Program (AHP) funds to help create homeownership through a program called the Welcome Home Program. Welcome Home funds are available to Members as grants to assist homebuyers.

Welcome Home grants are limited to $5,000 per household, households are eligible only if the total household income is at or below 80% of Mortgage Revenue Bond (MRB) income limits, and funds are offered on a “first-come, first-served” basis. Other program requirements are identified below.

What are the Program Requirements?

Below is an abbreviated list of program eligibility requirements:

The total income for all occupants must be at or below 80 percent of the Mortgage Revenue Bond (MRB) limit for the county and state where the property is located. The FHLB has an Income and Affordability Workbook to assist in determining household income eligibility.
Homebuyers must contribute at least $500 of their own funds towards down payment and/or closing costs.
WHP applicants do not have to be first-time homebuyers. However, all first-time homebuyers are required to complete a homeownership counseling program.
WHP grant funds are intended only for homebuyers who qualify for the first mortgage based on their own merit. Co-signors and co-borrowers are not allowed unless they will occupy the home as their primary residence and their incomes are included in determining eligibility.
WHP grant funds may be used in conjunction with other local, state and federal funding sources and with the FHLB Cincinnati’s Community Investment Cash Advance Programs.
The Member who reserves the WHP funds must originate the first loan, but the loan may close in the name of a third party.
The interest rate for the first mortgage may not exceed 7.50 percent.
The interest rate for the second mortgage may not exceed 11.00 percent.
Only second mortgages provided by formal organizations, community development financial institutions, housing finance agencies, non-profit organizations, etc. are acceptable.
All eligible property assisted with WHP funds is subject to a five-year retention mechanism (Retention Agreement), which may require the household to repay all, or a portion, of the subsidy, if the home is sold or refinanced within five years from the closing of the transaction.

Kentucky WELCOME HOME GRANT Available beginning March 4, 2020

*Welcome Home grant offered by FHLB of Cincinnati is available on a “first-come,
first-serve” basis only to the extent the funds are available.
Buyers do not have to be first-time homebuyers.
Homebuyers must contribute $500 toward down payment or closing costs, and cannot get cash back. Closing costs include appraisal, underwriter, title exam, credit reporting, title insurance, recording and flood determination fees.
First time homebuyers must complete a homebuyer counseling course.
Homebuyer’s income cannot exceed specific county income limits.
The home must meet specific condition requirements. Manufactured housing may be allowed. No 203k programs allowed.
Offer is subject to credit approval. Contact a Mortgage Lender for details, limits and guidelines, or if you have any questions.
Limited Time Offer

 

 

Kentucky Income limits for Welcome Home Grant for 2020

Income limits are obtained from the state housing finance agency for each state.

Use the 80% limits for the Welcome Home Program.*******

Use the 100% limits for the Disaster Reconstruction Program.

 

Kentucky 

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 tates. 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. subject to change and are subject to borrower(s) qualification.

Does FHA require collections to be paid off for a borrower to be eligible for FHA financing?


 

 

Image result for fha guidelines on collection accounts

Does FHA require collections to be paid off for a borrower to be eligible for FHA financing?

A Collection Account refers to a Borrower’s loan or debt that has been submitted to a collection agency by a creditor.
If the credit reports used in the analysis show cumulative outstanding collection account balances of $2,000 or greater, the lender 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 Debt-to-Income ratio (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.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 excluded by state law.   Unless the lender uses 5 percent of the outstanding balance, the lender must provide the following documentation:
•     evidence of payment in full, if paid prior to settlement;
•     the payoff statement, if paid at settlement; or
•     the payment arrangement with creditor, if not paid prior to or at settlement.For manually underwritten loans, the lender must determine if collection accounts were a result of:
•     the Borrower’s disregard for financial obligations;
•     the Borrower’s inability to manage debt; or
•     extenuating circumstances.

The lender must document reasons for approving a mortgage when the Borrower has any collection accounts. The Borrower must provide a letter of explanation, which is supported by documentation, for each outstanding collection account. The explanation and supporting documentation must be consistent with other credit information in the file.

For additional information see Handbook 4000.1 II.A.4.b.iv.(M); II.A.5.a.iii.(D), II.A.5.a.iv.(O)  at https://www.hud.gov/program_offices/administration/hudclips/handbooks/hsgh

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.

$10,000 DOWN PAYMENT ASSISTANCE GRANT FOR LOUISVILLE KENTUCKY HOME BUYERS in JEFFERSON COUNTY KY 2018


ALL FUNDS ALLOCATED FOR THE $10,000 DOWN PAYMENT ASSISTANCE AT THIS TIME.

$10,000 Down Payment Grant from Kentucky Housing for 2018 First Time Home Buyers

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

 

 

 

HUD Homes in KY 2013

4 Things Every Borrower Needs to Get Approved for a Mortgage or Home Loan In Kentucky

There are 4 basic things that a borrower needs to show a lender in order to get approved for a mortgage. Each category has so many what ifs and sub plots that each box can read as it’s own novel. In other words, each category has so many variables that can affect what it takes to get approved, but without further adieu here are the four categories in no particular order as each without any of these items, you’re pretty much dead in the water:


1. Income

You need income. You need to be able to afford the home.  But what is acceptable income? Let’s just say that there are two ratios mortgage underwriters look at to qualify you for mortgage payment:

First Ratio – The first ratio, top ratio or housing ratio. Basically that means out of all the gross monthly income you make, that no more that X percent of it can go to your housing payment. The housing payment consists of Principle, Interest, Taxes and Insurance. Whether you escrow or not every one of these items are factored into your ratio. There are a lot of exceptions to how high you can go, but let’s just say that if your ratio is 33% or less, generally, across the board, you’re safe.

Second Ratio- The second ratio, bottom ratio or debt ratio includes the housing payment, but also adds all of the monthly debts that the borrower has. So, it includes housing payment as well as every other debt that a borrower may have. This would include, Auto loans, credit cards, student loans, personal loans, child support, alimony….basically any consistent outgoing debt that you’re paying on. Again, if you’re paying less than 45% of your gross monthly income to all of the debts, plus your proposed housing payment, then……generally, you’re safe. You can go a lot higher in this area, but there are a lot of caveats when increasing your back ratio.

What qualifies as income? Basically, it’s income that has at least a proven, two year history of being received and pretty high assurances that the income is likely to continue for at least three years. What’s not acceptable? Unverifiable cash income, short term income and income that’s not likely to continue like unemployment income, student loan aid,  VA education benefits,or short term disability are not allowed for a  mortgage loan.

2. Assets

What the mortgage underwriter is looking for here is how much can you put down and secondly, how much will you have in reserves after the loan is made to help offset any financial emergencies in the future.

Do you have enough assets to put the money forth to qualify for the down payment that the particular program asks for. The only 100% financing or no money down loans still available in Kentucky for  home buyers are available through USDA, VA, and KHC or Kentucky Housing Loans. Most other home buyers that don’t qualify for the no money down home loans mentioned above, will turn to the FHA program. FHA loans currently requires a 3.5% down payment.

Kentucky Home buyers that have access to putting down at least 5% or more, will usually  turn to Fannie Mae or Freddie Mac mortgage programs  so they can get better pricing when it comes to mortgage insurance.

These assets need to be validated through bank accounts, 401k or retirements account and sometimes gifts from relatives or employer.. Can you borrower the down payment? Sometimes. Generally if you’re borrowing a secured loan against a secured asset you can use that. But rarely can cash be used as an asset. FHA will allow for gifts from relatives  for down payments with little as 3.5% down but Fannie Mae will require a 20% down payment when a gift is being used for the down payment on the home.

The down payment scenarios listed above are for Kentucky Primary Residences only. There are stricter  down payment requirements for investment homes made in Kentucky.

 3. Credit

 620 is the bottom score (again with few exceptions) that lenders will permit. Below a 620, then you’re in a world of hurt. Even at 620, people consider you a higher risk that other folks and are going to penalize you or your borrower with a more expensive loan. 720 is when you really start to get in the “as a lender we love you” credit score. 740 is even better. Watch your credit scores carefully. You have three credit scores and the lender will take your middle score.

Kentucky  FHA Mortgage Loans currently requires 3 years removal from a foreclosure or short sale  and 2 years on a bankruptcy with good reestablished credit.

Kentucky Fannie Mae Mortgage Loans currently requires 4 years removal from a bankruptcy, and 7 years on a foreclosure.

Kentucky VA Mortgage Loans currently requires 2 years removal from a bankruptcy or foreclosure with good reestablished credit.

Kentucky USDA loans require 3 years removal from bankruptcy and foreclosure with good reestablished credit.

4. Appraisal

Generally, there’s nothing you can do to affect this. Bottom line here is…..”is the value of the house at least the value of what you’re paying for it?” If not, then not good things start to happen. Generally you’ll find less issues with values on purchase transactions, because, in theory, the realtor has done an accurate job of valuing the house prior to taking the listing. The big issue comes in refinancing. In purchase transactions, the value is determined as the

Lower of the value or the contract price!!!

That means that if you buy a $1,000,000 home for $100,000, the value is established at $100,000. Conversely, if you buy a $200,000 home and the value comes in at $180,000 during the appraisal, then the value is established at $180,000. Big issues….Talk to your loan officer.

For each one of these boxes, there are over 1,000 things that can effect if a borrower has reached the threshold to complete that box. Soooooooooooo…..talk to a great loan officer. There are so many loan officers that don’t know what they’re doing. But, conversely, there’s a lot of great ones as well. Your loan is so important! Get a great lender so that you know, for sure, that the loan you want, can be closed on!

5 popular programs that Kentucky Home buyers use to purchase their first home.

  Mortgage Rates Kentucky

• At least 3%-5% down

 Closing costs will vary on which rate you choose and the lender. Typically the higher the rate, the lesser closing costs due to the lender giving you a lender credit back at closing for over par pricing. Also, called a no-closing costs option. You have to weigh the pros and cons to see if it makes sense to forgo the lower rate and lower monthly payment for the higher rate and less closing costs.
Fico scores needed start at 620, but most conventional lenders will want a higher score to qualify for the 3-5% minimum down payment requirements Most buyers using this loan have high credit scores (over 720) and at least 5% down.
The rates are a little higher compared to FHA, VA, or USDA loan but the mortgage insurance is not for life of loan and can be rolled off when you reach 80% equity position in home.
Conventional loans require 4-7 years removed from Bankruptcy and foreclosure.

Max Conventional loan limits are set at $424,00 for 2017 in Kentucky

If you meet income eligibility requirements and are looking to settle in a rural area, you might qualify for the KY USDA Rural Housing program. The program guarantees qualifying loans, reducing lenders’ risk and encouraging them to offer buyers 100% loans. That means Kentucky home buyers don’t have to put any money down, and even the “upfront fee” (a closing cost for this type of loan) can be rolled into the financing.
Fico scores usually wanted for this program center around 620 range, with most lenders wanting a 640 score so they can obtain an automated approval through GUS. GUS stands for the Guaranteed Underwriting system, and it will dictate your max loan pre-approval based on your income, credit scores, debt to income ratio and assets.
They also allow for a manual underwrite, which states that the max house payment ratios are set at 29% and 41% respectively of your income.
They loan requires no down payment, and the current mortgage insurance is 1% upfront, called a funding fee, and .35% annually for the monthly mi payment. Since they recently reduced their mi requirements, USDA is one of the best options out there for home buyers looking to buy in an rural area.
A rural area typically will be any area outside the major cities of Louisville, Lexington, Paducah, Bowling Green, Richmond, Frankfort, and parts of Northern  Kentucky .
There is a map link below to see the qualifying areas.
There is also a max household income limits with most cutoff starting at $76,000 for a family of four, and up to $98,000 for a family of five or more.
USDA requires 3 years removed from bankruptcy and foreclosure.

There is no max USDA loan limit.

FHA loans are good for home buyers with lower credit scores and no much down, or with down payment assistance grants. FHA will allow for grants, gifts, for their 3.5% minimum investment and will go down to a 580 credit score.
The current mortgage insurance requirements are kinda steep when compared to USDA, VA , but the rates are usually good so it can counteracts the high mi premiums. As I tell borrowers, you will not have the loan for 30 years, so don’t worry too much about the mi premiums.
THe mi premiums are for life of loan like USDA.
FHA requires 2 years removed from bankruptcy and 3 years removed from foreclosure.

Maximum FHA loan limits in Kentucky are set around $285,000 and below.

VA loans are for veterans and active duty military personnel. The loan requires no down payment and no monthly mi premiums, saving you on the monthly payment. It does have an funding fee like USDA, but it is higher starting at 2% for first time use, and 3% for second time use. The funding fee is financed into the loan, so it is not something you have to pay upfront outof pocket.
VA loans can be made anywhere, unlike the USDA restrictions, and there is no income household limit and the max loan is $417,000 in Kentucky
Most VA lenders I work with will want a 580 credit score.

VA requires 2 years removed from bankruptcy or foreclosure.

This type of loan is administered  by KHC in the state of Kentucky. They typically have $4500 to $6000 down payment assistance year around, that is in the form of a second mortgage that you pay back over 10 years.
Sometimes they will come to market with other down payment assistance and lower market rates to benefit lower income households with not a lot of money for down payment.
KHC offers FHA, VA, USDA, and Conventional loans with their minimum credit scores being set at 620 for all programs. The conventional loan requirements at KHC requires 660 credit score.
The max debt to income ratios are set at 40% an 45% respectively.

What kind of credit score do I need to qualify for different first time home buyer loans in Kentucky?
Answer. Most lenders will wants a middle credit score of 640 for KY First Time Home Buyers looking to go no money down. The two most used no money down home loans in Kentucky being USDA Rural Housing and KHC with their down payment assistance will want a 640 middle score on their programs.
If you have access to 3.5% down payment, you can go FHA and secure a 30 year fixed rate mortgage with some lenders with a 580 credit score. Even though FHA on paper says they will go down to 500 credit score with at least 10% down payment, you will find it hard to get the loan approved because lenders will create overlays to protect their interest and maintain a good standing with FHA and HUD.
Another popular no money down loan is VA. Most VA lenders will want a 620 middle credit score but like FHA, VA on paper says they will go down to a 500 score, but good luck finding a lender for that scenario.
A lot of times if your scores are in the high 500’s or low 600’s range, we can do a rapid rescore and get your scores improved within 30 days.
∘ Does it costs anything to get pre-approved for a mortgage loan?
Answer: Most lenders will not charge you a fee to get pre-approved, but some lenders may want you to pay for the credit report fee upfront. Typically costs for a tri-merge credit report for a single borrower runs about $50 or less. Maybe higher if more borrowers are included on the loan application.
∘ How long does it take to get approved for a mortgage loan in Kentucky?
Answer: Typically if you have all your income and asset documents together and submit to the lender, they typically can get you a pre-approval through the Automated Underwriting Systems within 24 hours. They will review credit, income and assets and run it through the different AUS (Automated Underwriting Systems) for the template for your loan pre-approval. Fannie Mae uses DU, or Desktop Underwriting, FHA and VA also use DU, and USDA uses a automated system called GUS. GUS stands for the Guaranteed Underwriting System.
If you get an Automated Approval, loan officers will use this for your pre-approval. If you have a bad credit history, high debt to income ratios,  or lack of down payment,  the AUS will sometimes refer the loan to a manual underwrite, which could result in a longer turn time for your loan pre-approval answer
 
∘ Are there any special programs in Kentucky that help with down payment or no money down loans for KY First Time Home Buyers?
Answer: There are some programs available to KY First Time Home Buyers that offer zero down financing: KHC, USDA, VA, Fannie Mae Home Possible and HomePath, HUD $100 down and City Grants are all available to Kentucky First Time Home buyers if you qualify for them. Ask your loan officer about these programs
∘ When can I lock in my interest rate to protect it from going up when I buy my first home?
Answer: You typically can lock in your mortgage rate and protect it from going up once you have a home picked-out and under contract. You can usually lock in your mortgage rate for free for 90 days, and if you need more time, you can extend the lock in rate for a fee to the lender in case the home buying process is taking a longer time. The longer the term you lock the rate in the future, the higher the costs because the lender is taking a risk on rates in the future.
Interest rates are kinda like gas prices, they change daily, and the general trend is that they have been going up since the Presidential election in November 2016.
∘ How much money do I need to pay to close the loan?
Answer: Depending on which loan program you choose, the outlay to close the loan can vary. Typically you will need to budget for the following to buy a home: Good faith deposit, usually less than $500 which holds the home for you while you close the loan. You get this back at closing; Appraisal fee is required to be paid to lender before closing. Typical costs run around $400-$450 for an appraisal fee; home inspection fees. Even though the lender’s programs don’t require a home inspection, a lot of buyers do get one done. The costs for a home inspection runs around $300-$400. Lastly, termite report. They are very cheap, usually $50 or less, and VA requires one on their loan programs. FHA, KHC, USDAS, Fannie Mae does not require a termite report, but most borrowers get one done.
There are also lender costs for title insurance, title exam, closing fee, and underwriting fees that will be incurred at closing too. You can negotiated the seller to pay for these fees in the contract, or sometimes the lender can pay for this with a lender credit.
The lender has to issue a breakdown of the fees you will incur on your loan pre-approval.
How long is my pre-approval good for on a Kentucky Mortgage Loan?
Answer: Most lenders will honor your loan pre-approval for 60 days. After that, they will have to re-run your credit report and ask for updated pay stubs, bank statements, to make sure your credit quality and income and assets has not changed from the initial loan pre-approval.
How much money do I have to make to qualify for a mortgage loan in Kentucky?
Answer: The general rule for most FHA, VA, KHC, USDA and Fannie MAe loans is that we run your loan application through the Automated Underwriting systems, and it will tell us your max loan qualifying ratios.
There are two ratios that matter when you qualify for a mortgage loan. The front-end ratio, is the new house payment divided by your gross monthly income.  The back-end ratio, is the new house payment added to your current monthly bills on the credit report, to include child support obligations and 401k loans.
Car insurance, cell phone bills, utilities bills does not factor into your qualifying rations.
If the loan gets a refer on the initial desktop underwriting findings, then most programs will default to a front end ratio of 31% and a back-end ratio of 43% for most government agency loans that get a refer. You then take the lowest payment to qualify based on the front-end and back-end ratio.
So for example, let’s say you make $3000 a month and you have $400 in monthly bills you pay on the credit report. What would be your maximum qualifying house payment for a new loan?
Take the $3000 x .43%= $1290 maximum back-end ratio house payment. So take the $1290-$400= $890 max house payment you qualify for on the back-end ratio.
Then take the $3000 x .31%=$930 maximum qualifying house payment on front-end ratio.
So now your know! The max house payment you would qualify would be the $890, because it is the lowest payment of the two ratios.

 

Customer Testimonials

 

We just moved here the first of January in 2017 from Ohio to the Louisville, KY area and we found Joel’s website online. He was quick to respond to us and got back the same day on our loan approval. He was very knowledgeable about the local market and kept us up-to date throughout the loan process and was a pleasure to meet at closing. Would recommend his services.

Angela Forsythe

 

“We were searching online for mortgage companies in Louisville, Ky locally to deal with and found Joel’s website, and it was a godsend. He was great to work with, and delivered on everything he said he would do. I ended up referring my co-worker at UPS, and she was very pleased with his service and rates too. Would definitely vouch for him.” September 2016

Monica Leinhardt



“We contacted Joel back in July 2011 to refinance our Mortgage and he was great to work with. We contacted several lenders locally and online, and most where taking almost 60 days to close a refinance, Joel got it done in 23 days start to finish,I would definetly recommmend him. He got us 3.75% with just $900 in closing costs on our FHA Streamline loan.
Kayle Griffin



“Joel is one of the best Mortgage Brokers I have ever worked with in my sixteen years in the real estate and mortgage business.” May 25, 2010
 
Tim Beck



“Joel has always worked very hard to keep his word and to work out seasonable solutions to difficult problems. He is truly an expert in FHA and other type loans.” September 1, 2010
 
Nancy Nalley

 

“I have worked with Joel since 1998. He is a great loan professional.” I refer most of my Louisville, Kentucky area home buyers to him and he always take special care of them. August 23, 2012

 

 
Jon ClarK
“Joel Lobb is a real professional in the lending industry, with many years of experience, he is the one to go to for any mortgage lending needs.” August 22, 2011



RICHARD VOLZ , Residential Sales , Remax Foursquare Realty

 

 
“When looking to purchase our new home in 2006, I had the pleasure of meeting Joel Lobb. Not only was he personable and easy to reach, he was extremely knowledgable in his field and made sure to find us the best rate and a top notch mortgage company. We were able to complete the process in less than 3 weeks with his expertise. I find Joel to have the utmost high integrity and I recommend him to anyone who say’s they are need of mortgage assistance. He is also fantastic and keeping everyone up to date on the latest in the housing industry through his twitter posts. He provided great results for our family and we still communicate to this day!” August 21, 2010

 

Stacie Drake

“We first use Joel on our new home purchase in 2007 in St Matthews, Kentucky area and he was great to work with. We have since refinanced our home with him in 2010 when rates got really low and he has always delivered on what he says. I could not imagine using anyone else.”

Melody Glasscock March 2014

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 Bell August 2017


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 June 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








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



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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