How to get the best mortgage rate in Kentucky

Best mortgage rates in Kentucky for FHA, VA, USDA and Conventional Home Loans


How to Secure the Best Mortgage Rate in Kentucky as A First Time Home buyer:

Getting the best Kentucky mortgage rate involves understanding various factors that lenactors to Considerders consider when evaluating loan applications. These factors include credit score, down payment, debt-to-income ratio (DTI), and the term of the loan. Here’s a comprehensive guide on how to improve these aspects to secure the best possible mortgage rate.

1. Credit Score:

Your credit score plays a significant role in determining the interest rate you qualify for. Lenders use credit scores to assess your creditworthiness and the risk associated with lending to you. Generally, the higher your credit score, the lower the interest rate you can secure. Here’s how different credit score ranges typically impact mortgage rates:

  • Excellent Credit (780 and above): Aim for a 780 score or higher for the best rates -Borrowers with excellent credit scores usually qualify for the lowest mortgage rates available.

2. Down Payment:

The down payment amount affects your loan-to-value (LTV) ratio, which is the loan amount divided by the property’s appraised value. A higher down payment reduces the lender’s risk, leading to better mortgage rates. Here’s how down payments typically impact mortgage rates:

  • 40% or more: A down payment of 40% or more often qualifies you for the best rates and eliminates the need for private mortgage insurance (PMI).

3. Debt-to-Income Ratio (DTI):

Your DTI ratio compares your monthly debt payments to your gross monthly income. Lenders use this ratio to assess your ability to manage monthly mortgage payments alongside existing debts. A lower DTI ratio indicates less financial risk to lenders, potentially leading to better rates. Here’s how to calculate DTI and improve it:

  • Calculate Your DTI: Add up all your monthly debt payments (such as credit cards, car loans, student loans) and divide by your gross monthly income.
  • Ideal DTI: Generally, a DTI of 45% or lower is considered good by most lenders.
  • Improve Your DTI: Paying down debts or increasing your income can lower your DTI ratio, improving your chances of securing a better rate.

4. Term of Loan:

The term of your loan, such as 15-year or 30-year, also influences the interest rate. Shorter loan terms often come with lower interest rates but higher monthly payments. Longer terms may have slightly higher rates but offer lower monthly payments.

In conclusion, to get the best Kentucky mortgage rate:

  • Maintain a high credit score by managing credit responsibly. Shoot for 780 or higher for the best mortgage rate on a conventional loan
  • Save for a substantial down payment to reduce the loan amount and LTV ratio. To get the best rate, usually 40% down will get you the best rates on a Conventional loan.
  • Keep your DTI ratio low by managing debts and increasing income where possible. Try to keep the debt to income ratio less than 45%
  • The above scenarios are for conventional loans. Rates could vary for VA, USDA, and FHA mortgage loans due to there mortgage insurance being the same for each borrower whereas conventional loans sway more toward the down payment, credit score, and debt to income ratio.
  • Keep in mind shorter term loans, i.e. 15 year loans vs 30 year loans will get you a better rate for all types of loans
  • Larger loan amounts will yield better rates vs small loan amounts due to the profits involved in the secondary market for the above loans and how lenders are paid.

Best mortgage rates in Kentucky for FHA, VA, USDA and Conventional Home Loans-

Joel Lobb  Mortgage Loan Officer

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
http://www.mylouisvillekentuckymortgage.com/

NMLS 57916  | Company NMLS #1364/MB73346135166/MBR1574

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 approvalnor 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 Guide for First-Time Home Buyers in Kentucky


​ Understanding several key factors that will influence your Kentucky mortgage loan approval. Here’s what you need to review before applying for a mortgage loan in Kentucky.

Credit Score​ for Kentucky Mortgage Loan Approval

Your credit score is a major factor in determining the interest rates and loan terms you’ll receive and your loan approval. In Kentucky, a score of 620 or higher is generally considered favorable for conventional loans, but programs like FHA loans may accept scores as low as 580. 

Kentucky Mortgage Loan Work History Requirements:

Lenders typically require a stable work history, usually two years or more in the same job or field, to ensure you have a reliable income stream to cover mortgage payments. Does not have to be same job but job gaps should be minimal and you can use college transcripts to supplement a 2 year work history with

Kentucky Mortgage guidelines for Income and Debt-to-Income Ratio: Balancing Your Budget

Your income level and debt-to-income (DTI) ratio are critical in assessing your ability to afford a home. A Debt to income ratio below 50% is ideal, as it indicates a healthy balance between debt and income. For example, if you make $4000 gross a month, then your new house payment plus your monthly payments on the credit report should not be more than $2000 total. There are two different ratios. Front end, which should be in the range of 30 to 40% of your gross monthly income, and a maximum of 50% for conventional loans and 55% or higher for VA and FHA loans, while USDA loans usually need a 33% front end max ratio and on the backend ratio no more than 45%__USDA loans are much tougher on debt to income ratios while FHA and VA are the most lenient.

Kentucky Mortgage Bankruptcy and Foreclosure: Understanding the Waiting Period

If you’ve experienced bankruptcy or foreclosure, there’s a mandatory waiting period before you can qualify for a mortgage. For FHA loans, this could be as little as 1-2 years post-bankruptcy and 3 years post-foreclosure1. See link for more info 👆

Kentucky Mortgage Down Payments:

While traditional loans may require up to 3-5% down, Kentucky offers programs that allow for down payments as low as 0%Additionally, down payment assistance programs can provide up to 5% of the sales price or 10k KHC down payment assistance  to help cover these costs

Kentucky Mortgage Loan Limits:

Loan limits vary by county and loan type. In Kentucky, conforming loan limits for a single-family home can reach up to $647,200 for conventional loans, with higher limits for FHA and VA loans1.

Government-Backed Loans: Kentucky FHA, VA, USDA Rural Housing

These loans offer benefits like lower down payments, zero down with down payment assistance  and more lenient credit requirements, 580 credit scores. The VA loan, for instance, may require no down payment at all for eligible veterans or active-duty service members1.

Kentucky Housing: Down payment Assistance and lower mortgage market rates with MRB Rates.

The Kentucky Housing Corporation (KHC) provides various programs, including the Conventional Preferred and Preferred Plus 80, down payment assistance and low mortgage revenue bond rates which offer competitive interest rates and down payment assistance for those who qualify

Down Payment Assistance Welcome Home Grant

Kentucky’s down payment assistance programs can be a boon, offering loans to cover down payments and closing costs, making homeownership more accessible for first-time buyers.


Joel Lobb  Mortgage Loan Officer

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
http://www.mylouisvillekentuckymortgage.com/

kk

NMLS 57916  | Company NMLS #1364/MB73346135166/MBR1574

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 approvalnor 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).


Debt-to-Income (DTI) ratio requirements for ​Kentucky FHA, VA, USDA, and conventional mortgage loans

 Here’s a summary of the Debt-to-Income (DTI) ratio requirements for ​Kentucky FHA, VA, USDA, and conventional mortgage loans, along with examples for each:

  1. ​Kentucky FHA Loan DTI Requirements:
    • Front-End DTI Ratio: Up to 31%
    • Back-End DTI Ratio: Up to 43%
    • Example: Monthly gross income of $5,000, the FHA loan allows a maximum monthly mortgage payment (including principal, interest, taxes, and insurance) of $2,150 (43% of $5,000).
  2. ​ Kentucky VA Loan DTI Requirements:
    • Generally flexible with DTI ratios, but a common guideline is:
      • Back-End DTI Ratio: Up to 41%
    • Example: Monthly gross income of $6,000, the VA loan allows a maximum monthly debt payment (including mortgage, car loans, credit cards, etc.) of $2,460 (41% of $6,000).
  3. ​Kentucky USDA Loan DTI Requirements:
    • Front-End DTI Ratio: Up to 29%
    • Back-End DTI Ratio: Up to 41%
    • Example: Monthly gross income of $4,000, the USDA loan allows a maximum monthly mortgage payment (including taxes and insurance) of $1,160 (29% of $4,000).
  4. ​Kentucky Conventional Loan DTI Requirements:
    • Front-End DTI Ratio: Up to 28%
    • Back-End DTI Ratio: Up to 36-45% (may vary based on the lender and loan program)
    • Example: Monthly gross income of $7,000, a conventional loan may allow a maximum monthly debt payment (including mortgage, car loans, credit cards, etc.) of $2,520 to $3,150 (36-45% of $7,000).
Debt-to-Income (DTI) ratio requirements for ​Kentucky FHA, VA, USDA, and conventional mortgage loans

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 when determining our eligibility for financing (e.g., credit score, etc.), your DTI is an important determinant that you should be aware of. By working to improve it, you can make yourself a better credit risk, and thus get more favorable treatment from lenders.
Two obvious ways to improve DTI are to increase your income and/or decrease your debt. Both are solid goals.
 

Hope your day is full of sunshine😊

Joel Lobb  Mortgage Loan Officer

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
http://www.mylouisvillekentuckymortgage.com/

NMLS 57916  | Company NMLS #1364/MB73346135166/MBR1574

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 approvalnor 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).

Welcome Home Grant 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/


The Kentucky Welcome Home Grant is out of funds. 

 

 

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/

How to get approved for a mortgage in Kentucky as a first-time homebuyer


How to get approved for a mortgage in Kentucky as a first-time homebuyer using FHA, VA, USDA, and Kentucky Housing Corporation (KHC) down payment assistance programs with Joel Lobb’s expertise, here are the steps you can follow:

  1. Credit Check and Improvement if Necessary:

    • Check your credit score and credit report.
    • Improve your credit score if needed by paying off debts and resolving any issues on your credit report.
  2. Financial Assessment:

    • Assess your financial situation, including income, savings, and debts.
    • Determine how much you can afford for a down payment and monthly mortgage payments.
  3. Explore Loan Options:

    • Research FHA, VA, USDA, and KHC loan programs to understand their requirements, benefits, and eligibility criteria.
    • Discuss with Joel Lobb to get insights into each program’s pros and cons based on your financial situation.
  4. Pre-Approval Process:

    • Apply for pre-approval with Joel Lobb’s assistance.
    • Submit necessary documents such as income statements, tax returns, bank statements, and employment history.
  5. Down Payment Assistance Programs:

    • Explore down payment assistance programs offered by KHC or other organizations.
    • Understand the eligibility criteria and application process for these programs.
  6. Property Search and Selection:

    • Start searching for homes within your budget and preferred location.
    • Consider factors such as neighborhood amenities, school districts, and property value trends.
  7. Make an Offer and Negotiate:

    • Work with Joel Lobb to make a competitive offer on a property you like.
    • Negotiate terms such as price, closing costs, and seller concessions.
  8. Loan Application and Processing:

    • Once your offer is accepted, complete the loan application process with Joel Lobb.
    • Provide any additional documentation required by the lender.
  9. Home Inspection and Appraisal:

    • Schedule a home inspection to identify any potential issues with the property.
    • Arrange for an appraisal to determine the home’s value.
  10. Closing Preparation:

    • Review the closing disclosure and loan terms.
    • Prepare funds for closing costs, down payment, and other expenses.
  11. Closing Day:

    • Attend the closing meeting with Joel Lobb and sign all necessary documents.
    • Complete the transfer of ownership and receive the keys to your new home.

Throughout this process, Joel Lobb can provide valuable advice, assistance, and support to help you navigate the complexities of obtaining a mortgage and buying your first home in Kentucky

 

Hope your day is full of sunshine😊

Joel Lobb  Mortgage Loan Officer

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

http://www.mylouisvillekentuckymortgage.com/

 

 

 

 
NMLS 57916  | Company NMLS #1364/MB73346135166/MBR1574

 

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 approvalnor 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).