Kentucky FHA HUD Homes for $100 Down


Kentucky FHA HUD Homes for $100 Down.

via Kentucky FHA HUD Homes for $100 Down.

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Mortgage Tips


Mortgage Tips.

via Mortgage Tips.

 

Tips to ensure your mortgage closes smoothly:

Credit Cards / New debt: Once you have applied for a mortgage, do not apply for new debt or credit cards, even if you do not plan to use them until after settlement. When you buy a home, you will undoubtedly buy items for that home; please wait until after you own the home!

Review your credit report: Be proactive in the process by thoroughly reviewing your credit report with me at the beginning of the process and report any inaccurate or missing information so that we can address it accordingly. What is missing on your report today could show up later and derail your closing.

Save everything: Save all of your bank statements, paystubs and credit card statements from time of application until closing. We may need them.

Do not pack your financial papers: Keep all tax returns, W-2’s, paystubs, 1099’s, K-1’s, bank statements etc… in an accessible place – not in POD somewhere in Timbuktu. You never know what you may have to provide at the last minute with the new guidelines. Be prepared!

Gift Funds and Large deposits: Based on the new rules, we will need a more detailed paper trail on gift funds and large deposits that are not consistent with your normal deposit pattern. If you are receiving a gift, we will need to verify that you have received it and that the donor has the ability to give those funds. Large deposits will have to be sourced; be prepared to show and explain where that money came from. If it was from a bonus, have the check ready. If you sold a car, have the bill of sale and a copy of the title transfer.

Changing Jobs: This one may seem obvious, but if you are planning to change jobs during the loan process, please inform me ASAP. If you are forced to change jobs, inform me immediately. You will sign a final application at settlement. When you sign it, you will be verifying the information that it contains. Do not commit mortgage fraud.

Do not move cash around: Lenders must verify all funds for closing and the source of those funds. When you move those assets around, it creates a paper trail nightmare. The best practice is to leave everything where it is. Once we have verified all accounts and given you the ”ok” , then you can commence shuffling funds.

Finally, when in doubt, contact me to ask. Do not take any chances with the approval of your loan. If additional verification is required, it will in most cases, delay your closing.

— 

 
Joel Lobb
Senior  Loan Officer

(NMLS#57916)
 
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
 Fax:     (502) 327-9119
 
 Company ID #1364 | MB73346

 CONFIDEN

Kentucky USDA Loans | Rural Housing Loans Kentucky


Kentucky USDA Loans | Rural Housing Loans Kentucky.

via Kentucky USDA Loans | Rural Housing Loans Kentucky.

Kentucky Private Mortgage Insurance or PMI


Kentucky Private Mortgage Insurance or PMI.

Mortgage Insurance Tax Deduction
Frequently Asked Questions

For mortgage loans originated in 2018, 2019 and 2020, Congress recently restored the mortgage insurance (MI) premium tax deduction to eligible borrowers who itemize. Learn more from our FAQ below.

MI Tax-Deductibility Overview

1. What is private mortgage insurance (MI) tax-deductibility and how does it work?

Recent legislation restored an itemized deduction on federal tax returns for the cost of private MI paid by eligible borrowers. This deduction law applies to borrower-paid MI certificates issued by Arch MI.

The new law is effective for amounts paid for MI attributable to the 2018, 2019 and 2020 tax years.

2. What is the reason for this MI tax-deductibility legislation?

The federal government supports home ownership and helps make home ownership more affordable for more homebuyers through this MI tax deduction.

3. How does the MI tax deduction work?

The federal MI tax deduction allows borrowers with adjusted gross incomes up to $100,000 to take advantage of the full MI tax deduction — 100% of the MI premium for a qualifying loan is subject to this tax deduction.

Borrowers with adjusted gross incomes up to $109,000 can take advantage of a partial MI tax deduction. For each additional $1,000 of gross household income above $100,000, the MI deduction is reduced by 10%, with a cutoff of any deduction at $109,000.

Married persons filing separately, with adjusted gross income of $50,000 or less are each able to deduct 50% of their MI premiums. For each additional $500 of gross household income above $50,000, the MI deduction is reduced by 5%, with a cutoff of any deduction at $54,500.

4. What kinds of loans qualify for the deduction?

The deduction applies to existing homeowners as well as to first-time homebuyers. The MI tax deduction applies to MI premiums for purchase and refinance loans for “qualified residences” as defined in the Internal Revenue Code. This generally includes the borrower’s primary residence and one other qualified residence. Investor loans are not eligible. Arch MI’s Monthly, Single- and Split-Premium MI payment plans are all eligible for the tax deduction. For upfront payment plans, borrowers should consult with a professional tax adviser to determine the amount of the MI premium eligible for the tax deduction.

5. What savings amount can a typical homeowner with MI expect?

Individual savings will vary, depending on the size of the loan and a borrower’s adjusted gross income and tax bracket.

6. How many people in the United States use MI?

Millions of people use private MI every year — it’s an important factor in facilitating home purchases for first-time homebuyers, low- to moderate-income borrowers and minority and immigrant borrowers. Most lenders require a 20% down payment for a home loan, which is the single biggest obstacle prospective homebuyers face. MI makes it possible for more families and individuals to purchase homes with low down payments that meet their budgets.

7. How long will this tax deduction be available?

The current tax deduction legislation applies to MI premiums attributable to the 2018, 2019 and 2020 tax years. Congress has the power to extend the tax deduction to later years through future legislation.

Qualification

1. Is the deduction only for first-time homebuyers?

No. The deduction applies to existing homeowners as well as to first-time homebuyers.

2. Does the MI tax deduction apply to new purchases only? Are refinances also included?

The MI tax deduction applies to purchases and refinances up to the amount of acquisition indebtedness as defined in the Internal Revenue Code. This could include first and second mortgages but may not include the full amount of a cash-out refinance. Borrowers with cash-out refinances should consult a professional tax adviser to determine the amount of MI premium eligible for the tax deduction.

3. Are there any occupancy restrictions?

The deduction applies to a “qualified residence.”. Generally, that includes the taxpayer’s principal residence and up to one other residence selected by the taxpayer for purposes of the deduction for qualified residence interest. Note: The other residence must be used for personal purposes by the taxpayer for 14 days or 10% of the days during the tax year that the unit is rented for fair value, whichever is greater, among other tax code criteria.

4. Are investor loans eligible?

No, investor loans are not eligible.

5. Is there a loan amount limit?

No. The available tax deduction is only limited by the taxpayer’s income.

6. Is deductibility applicable for all loan types?

There is no differentiation among loan types. But the premium has to be for what is considered “acquisition indebtedness” on a “qualified residence.”

7. When refinancing a piggyback loan, for purposes of the deduction, is the original loan amount considered the sum of the two mortgages or only the primary mortgage amount without the second lien included?

The loan amount applicable to the deduction would be the sum of the two mortgages, up to the amount of “acquisition indebtedness.”

8. Do tax deductions have to be itemized on tax returns in order to take the deduction?

Yes. In order to take advantage of the MI tax deduction, borrowers must include their MI premium payment information on an itemized tax return.

 

FHA Streamline Refinance MIP


FHA Streamline Refinance MIP (For Loans Endorsed Before June 1, 2009)

If the existing FHA mortgage was endorsed prior to June 1, 2009, the mortgage insurance premiums have been “grandfathered”.

Upfront Mortgage Insurance Premiums (UFMIP)

For an FHA Streamline Refinance that replaces a loan endorsed prior to June 1, 2009, the new FHA mortgage’s upfront mortgage insurance is equal to 0.01 percent of the loan size, or 1 basis point.

For example, if the new FHA Streamline Refinance is for $100,000 mortgage, the FHA will assess a $10 upfront mortgage insurance premium (MIP) to be paid by you at closing. The FHA automatically adds the $10 payment to your new loan balance.

Annual Mortgage Insurance Premiums (MIP)

Annual MIP is similarly cheap for “old” FHA loans. For an FHA Streamline Refinance replacing an FHA loan endorsed prior to June 1, 2009, the annual MIP is 0.55% annually, or 55 basis points.

The complete annual MIP schedule is as follows :

  • 15-year loan terms with loan-to-value over 90% : 0.55 percent annual MIP
  • 15-year loan terms with loan-to-value under 90% : 0.55 percent annual MIP
  • 30-year loan terms with loan-to-value over 95% : 0.55 percent annual MIP
  • 30-year loan terms with loan-to-value under 95% : 0.55 percent annual MIP

15-year fixed rate mortgages with LTVs of 78% or less pay no annual MIP.

 

KHC Loan Programs


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KHC Loan Programs.

KHC offers two different funding sources: Secondary Market and MRB.

SECONDARY MARKET FUNDING SOURCE

  • First-time and repeat homebuyers statewide
  • 30-year fixed interest rate
  • Principle residence ONLY
  • Purchase Price Limit: $243,000
  • Borrower must meet KHC’s Secondary Market Income Limits

Conventional No Mortgage Insurance Program

  • Minimum credit score of 660
  • 3 percent down payment and no up-front or monthly mortgage insurance
  • All KHC DAPs applicable
  • No minimum borrower contribution
  • No reserves required

FHA

  • Insured by the Federal Housing Administration
  • 3.5 percent down payment
  • All KHC DAPs applicable
  • Upfront and monthly mortgage insurance
  • Minimum credit score of 620

Two FHA Refinance Options (Available Only Through Secondary Market)

  • Credit qualifying Streamline Refinance and Rate/Term Refinance
    • Insured by the Federal Housing Administration
    • Cash back to borrower not to exceed $500
    • Upfront and monthly mortgage insurance
    • Minimum credit score of 620

VA

  • Guaranteed by the Veterans Administration for qualified military veterans
  • No down payment if the property appraises for the sale price or greater
  • All KHC DAPs applicable
  • Minimum credit score of 580
  • No monthly mortgage insurance payments

RHS

  • Guaranteed by Rural Housing Services (RHS)
  • Home must be located in a rural area as defined by RHS
  • No down payment if the property appraises for the sale price or greater
  • All KHC DAPs applicable
  • Upfront and monthly mortgage insurance
  • Minimum credit score of 640

Home Buyer Tax Credit

KHC’s Home Buyer Tax Credit is available through Mortgage Credit Certificates (MCC), which reduce the amount of federal income tax you pay, giving you more available income to qualify for a mortgage loan. MCCs are NOT mortgages. They are tax credits that put extra cash in your pocket each month, so you can more easily afford a house payment. That means fewer tax dollars will be withheld from your regular paycheck, increasing your take-home pay. The federal government allows every homeowner an income tax deduction for all the interest paid each year on a mortgage loan. But an MCC gives you a tax credit of 25 percent (not to exceed $2,000). You can still deduct the remaining 75 percent interest on your income taxes. A tax credit is not the same as a tax deduction. A tax deduction reduces the portion of your income that is taxed, so you pay less. A tax credit is a direct, dollar for dollar reduction in the total tax you owe. The MCC is effective for the life of the loan as long as you live in the home. If you sell your home in the first nine years of ownership, you may be subject to Federal Recapture Tax. One-time fee of $500 or reduced to $200 if through KHC’s Secondary Market First Mortgage Program. Not valid with MRB loan programs.

Applying for a Kentucky Housing Corporation loan is easy. Just contact one of our approved lenders near you and ask for a Kentucky Housing Corporation loan.

 

MRB FUNDING SOURCE

  • 30-year fixed interest rate
  • Principle residence ONLY
  • Purchase price limit: $243,000
  • Borrower must meet MRB income guidelines
  • Some MRB KHC loans are subject to a federal recapture tax. However, KHC has implemented a Recapture Tax Guarantee Program for all loans that close after October 1, 2006. The Recapture Tax Guarantee Program will reimburse homeowners if they are subject to pay the Federal Recapture Tax on their KHC mortgage loan upon the sale of their home.

Here are several loan options for borrowers who don’t have a large down payment.

FHA loan. FHA loans typically require a 3.5 percent down payment, but that can go up to 10 percent if you have a poor FICO Score (500-579). You’ll have to pay upfront and annual mortgage insurance, regardless of how much you put down. The U.S. Department of Housing and Urban Development (HUD) has a searchable database where you can find FHA-approved lenders in your area.

 

VA loan. If you’re eligible for a VA loan, you’re in luck. VA loans don’t require any down payment from the borrower, they don’t charge mortgage insurance AND they have no minimum credit score requirement. But (there’s always a but!) VA loan holders will have to pay a funding fee, which can range from 1.25 to 2.4 percent of your loan amount.

HomeReady. Fannie Mae’s HomeReady mortgage program requires a minimum 3 percent down payment and comes with mortgage insurance. But you can get rid of the mortgage insurance obligation once your loan-to-value ratio falls below 78 percent. You don’t need stellar credit either — they accept borrowers with a FICO Score of 620 or greater. Because they’re backed by Fannie Mae, HomeReady loans also allow borrowers to use other sources of funding for their down payment, like a gift from family or friends.

USDA loan. If you’re set on living in a rural area, you may be eligible for a USDA mortgage loan. Generally, they classify any area with fewer than 10,000 to 20,000 residents as rural, but to be safe check out their property eligibility map. No down payment is required, and there’s no ongoing mortgage insurance fee, but you do have to pay a 2 percent upfront fee. Typical credit score requirements are 620 to 640 minimum. Borrowers also can’t have prior foreclosures, bankruptcies or major delinquencies in the past several years.

 

First Time Home Buyer Louisville Kentucky Mortgage Programs


First Time Home Buyer Louisville Kentucky Mortgage Programs.

via First Time Home Buyer Louisville Kentucky Mortgage Programs.