KENTUCKY HUD HOMES FOR SALE

KENTUCKY FHA $100 DOWN PROGRAM FOR HOMEBUYERS IN KENTUCKY​

Kiss-your-landlord-goodbye


FHA’s $100 Down Program​ is allowed for Kentucky Home Buyers buying a home that is owned by HUD or FHA​. The $100 Down sales incentive permits a Borrower to purchase a HUD REO Property with FHA-insured financing with a minimum downpayment of $100.

This program can ONLY be used to purchase homes owned by HUD OR FHA.

Check the link below to see if any properties are offered in your area. If a property is eligible, the listing on the website will specify $100 Down Financing Incentivize.

You can find all current listings for sale by HUD here.

100 down payment

The main factors in qualifying for this​ Kentucky FHA ​ program are that the property must be a HUD REO property and purchased using FHA Financing, aside from these, the requirements include:

  1. Occupancy: The property must be purchased for use as your Primary Residence.
  1. Property Type: Eligible properties include 1 or 2 unit homes, manufactured homes, condos, and PUDs.
  1. Full Price Offer: You must submit an offer for the full listing price. Typically, when you purchase a home, you make an offer to the seller…. we all want to get the best deal so you may offer less than the asking price… or you may offer more if the home you want is being bid on by many buyers…. With HUD REO properties this is not allowed. The sales price HUD has on the listing is what you must offer.
  1. Sales Contract: The $100 down payment incentive must be included on the executed sales contract.
  1. Cannot have purchased a HUD home within the preceding 24 months
  1. Credit Score:​ ​580 is the minimum FICO score you must have to qualify for a FHA Kentucky Home Buyer using the HUD $100 Down loan program. 
  2. Usually takes about 30-45 days to close
  3. Earnest Money Deposit usually needs to be at least $500 to $1000
  4. This is a manual underwriter meaning that your debt to income ratio has to be 31 and 43% respectively
  5. No Chapter 7 Bankruptcies in last two years
  6. No Foreclosures in last 3 years
  7. Clear Cavirs on borrowers.
*Required field, except if Property Case # or Zip Code is entered

Search Results for HUD Homes in KY

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47 listings found
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Property Case Address Price Status Bed Bath Listing Period Bid Open Date Details 
201-271516 345 Concord Dr
White Plains, KY, 42464
Hopkins County
$13,600 3 1.00 Extended  11/29/2018 View Street
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201-278709 793 Highway 16
Glencoe, KY, 41046
Gallatin County
$24,000 3 2.00 Extended  11/29/2018 View Street
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201-339965 2750 Latonia Ave
Covington, KY, 41015
Kenton County
$33,600 2 1.10 Exclusive  12/03/2018 View Street
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201-340924 1309 Little Pigeon Ct
Lexington, KY, 40515
Fayette County
$63,000 3 1.00 Lottery  11/29/2018 View Street
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201-347762 307 Elkhorn Green Pl
Georgetown, KY, 40324
Scott County
$105,000 4 2.10 Exclusive  11/29/2018 View Street
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201-348170 820 Mars Dr
Verona, KY, 41092
Gallatin County
$48,000 3 2.00 Extended  11/29/2018 View Street
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201-362370 194 Batton Loop
Morehead, KY, 40351
Rowan County
$59,400 3 2.00 Extended  11/29/2018 View Street
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201-368065 199 Lake Trail Land
Russell Springs, KY, 42642
Russell County
$34,400 3 2.00 Extended  11/29/2018 View Street
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201-370012 112 Cherry Lane
Frankfort, KY, 40601
Franklin County
$50,000 2 2.00 Exclusive  12/03/2018 View Street
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201-372013 10057 Elizabethtown Rd
Big Clifty, KY, 42712
Grayson County
$32,000 3 2.00 Extended  11/29/2018 View Street
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201-386189 4701 Dohn Rd
Louisville, KY, 40216
Jefferson County
$51,000 3 1.00 Exclusive  12/10/2018 View Street
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201-387184 12804 Walnut Creek Dr
Alexandria, KY, 41001
Campbell County
$159,000 4 2.10 Extended  11/29/2018 View Street
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201-391357 38 Lovelaceville Rd
Lovelaceville, KY, 42060
Ballard County
$19,600 2 1.00 Extended  11/29/2018 View Street
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201-393499 620 Main Street
Uniontown, KY, 42461
Union County
$26,100 3 1.00 Extended  11/29/2018 View Street
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201-396375 119 Crane St
Somerset, KY, 42501
Pulaski County
$30,000 2 1.00 Exclusive  11/29/2018 View Street
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201-401444 151 Eastside Park Dr
Butler, KY, 41006
Pendleton County
$50,400 3 2.00 Extended  11/29/2018 View Street
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201-407845 824 Pike St
Sadieville, KY, 40370
Scott County
$27,000 1 1.00 Extended  11/29/2018 View Street
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201-411349 115 Jimmy Lovell Ro
Dawson Springs, KY, 42408
Hopkins County
$75,000 2 1.10 Exclusive  12/10/2018 View Street
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201-412276 386 W Elm St
Clay, KY, 42404
Webster County
$35,000 3 2.10 Exclusive  12/03/2018 View Street
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201-417838 147 Main Street
Newport, KY, 41071
Campbell County
$38,500 1 1.00 Extended  11/29/2018 View Street
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Search Results for HUD Homes in KY

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47 listings found
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Property Case Address Price Status Bed Bath Listing Period Bid Open Date Details 
201-427873 229 Rosedale Ct
Covington, KY, 41015
Kenton County
$42,400 2 1.00 Extended  11/29/2018 View Street
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201-445853 902 Deer Haven Dr
Owensboro, KY, 42301
Daviess County
$63,000 3 2.00 Extended  11/29/2018 View Street
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201-448631 13302 Horncastle Ave
Louisville, KY, 40272
Jefferson County
$65,000 4 1.10 Exclusive  11/30/2018 View Street
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201-461769 511 1/2 Cleaver St
Elizabethtown, KY, 42701
Hardin County
$20,000 1 1.00 Exclusive  12/03/2018 View Street
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201-481525 216 10th St
Carrollton, KY, 41008
Carroll County
$117,000 4 2.00 Extended  11/29/2018 View Street
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201-483660 204 Village Dr
Frankfort, KY, 40601
Franklin County
$143,000 3 2.10 Exclusive  11/29/2018 View Street
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201-484750 3256 N Highway 259
Hardinsburg, KY, 40143
Breckinridge County
$45,000 3 1.00 Extended  11/29/2018 View Street
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201-503727 207 Canyon Ridge Rd
Wellington, KY, 40387
Menifee County
$76,000 3 2.00 Extended  11/29/2018 View Street
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201-510934 5685 Old State Rd
Guston, KY, 40142
Meade County
$60,000 3 1.00 Extended  11/29/2018 View Street
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201-513130 109 W Chestnut St
Carlisle, KY, 40311
Nicholas County
$73,000 3 2.00 Exclusive  11/29/2018 View Street
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201-528046 330 Brookside Dr
Danville, KY, 40422
Boyle County
$175,000 4 3.00 Extended  11/29/2018 View Street
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201-536556 1504 Robinson St
Grayson, KY, 41143
Carter County
$46,400 3 1.00 Extended  11/29/2018 View Street
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201-537032 307 Liberty St
Carlisle, KY, 40311
Nicholas County
$40,000 3 1.00 Exclusive  11/29/2018 View Street
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201-546596 38 Harrison Holw
Belfry, KY, 41514
Pike County
$7,000 0 0.00 Extended  11/29/2018 View Street
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201-547160 324 Malone Rd
Bradfordsville, KY, 40009
Marion County
$40,000 3 2.00 Exclusive  12/07/2018 View Street
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201-550376 3904 Taffy Rd
Whitesville, KY, 42378
Ohio County
$50,000 3 2.00 Extended  11/29/2018 View Street
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201-557096 237 Wright St
Frankfort, KY, 40601
Franklin County
$40,000 3 1.00 Extended  11/29/2018 View Street
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201-560972 5457 Ky Route 680
Grethel, KY, 41631
Floyd County
$76,000 4 2.10 Extended  11/29/2018 View Street
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201-576631 67 Snake Lick Rd
Berry, KY, 41003
Harrison County
$45,000 3 2.00 Exclusive  11/29/2018 View Street
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201-580027 255 Kingsway Dr
Frankfort, KY, 40601
Franklin County
$65,000 3 2.00 Extended  11/29/2018 View Street
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Search Results for HUD Homes in KY

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47 listings found
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Property Case Address Price Status Bed Bath Listing Period Bid Open Date Details 
201-580611 2410 Paddock Ln
Louisville, KY, 40216
Jefferson County
$88,000 4 1.00 Exclusive  11/30/2018 View Street
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Email Info
201-580733 2294 Josephine Rd
Stamping Ground, KY, 40379
Scott County
$108,000 4 2.00 Extended  11/29/2018 View Street
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Email Info
201-583071 104 Jonathan Ct
Somerset, KY, 42503
Pulaski County
$108,900 4 2.00 Extended  11/29/2018 View Street
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Email Info
201-590501 13255 Dawson Springs Rd
Crofton, KY, 42217
Christian County
$45,000 3 1.00 Exclusive  12/07/2018 View Street
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201-601254 1044 Scenic Dr
Radcliff, KY, 40160
Hardin County
$132,300 3 2.00 Extended  11/29/2018 View Street
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201-604473 8180 Georgetown Rd
Owenton, KY, 40359
Owen County
$69,000 3 2.00 Exclusive  12/07/2018 View Street
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202-019773 516 Wood Street
Maysville, KY, 41056
Mason County
$25,000 3 1.00 Extended  11/29/2018 View Street
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1 | 2 | 3 | 
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 FHA Mortgage Loans- Gifts to Pay off Debt to Qualify for a FHA Home Loan.

 

FHA Loans in Kentucky  – Gifts to Pay off Debt

Do you know that a gift can be used to pay off Borrower’s debts to qualify on an Kentucky FHA Loan?

A regular gift (this does not include a gift of equity) may be used to pay off a Borrower’s debt(s) for qualifying purposes as long as both the gift funds and the debt(s) being paid off with the gift funds are accurately disclosed and assessed by AUS TOTAL Scorecard. Whenever a gift is received on an Kentucky FHA loan, regardless of what it is being used for, it carries certain risks that must be assessed by TOTAL Scorecard for qualifying purposes.

When a gift is received to pay off debt(s), follow the steps below to ensure that TOTAL Scorecard accurately assesses the risk of using gift funds in paying off debt for qualifying:

  • Verify that evidence of the debt(s) having a zero balance has been obtained,
  • Enter the gift funds received separate from any account balances and check “will be paid off” for debts in loan origination system (not “paid off”), and
  • Submit the loan to TOTAL Scorecard
 
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
 


Text/call 502-905-3708
kentuckyloan@gmail.com

http://www.nmlsconsumeraccess.org/
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 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.

Can you get a mortgage loan while in a Chapter 13 Bankruptcy:

Here is a brief summary on getting a mortgage loan while in a Chapter 13 Bankruptcy:
 
You must have 12 payments paid into the Chapter 13 before you can apply for a mortgage loan.
 
The payments must be made on time for last 12 months or after 12 months if you have been in longer, so no late payments to the Chapter 13 while in it. 
 
You have to ask permission from the courts to seek a mortgage loan. They usually grants this. I have never not seen them grant it.
 
You have to qualify with the new house payment along with Chapter 13 payments and other debts listed on credit report. Debt to income ratios usually center around 31 and 43% respectively, meaning the new house payment should not be more than 31% of your gross monthly income and your total house payment and debts listed on credit report along with Chapter 13 payment should not be more than 43% of your total gross monthly income. 
 
Credit scores: Most FHA lenders I work with will want a 620 middle score. You have three fico scores from Experian, Equifax, and Transunion, and they throw out the high and low score and take middle score. For example, if you had a 598, 679, and 590 scores respectively for all three bureaus listed above, your qualifying score would be 598.
There are some FHA investors that I am set up with that will go down to 580, but I have seen in my past experiences 620 will get you a better deal and far greater chance of closing on your loan with FHA. 
 
Down payment: For FHA loans, you will need to have at least 3.5% down payment saved up. It is extremely hard to find a no money down loan program to get you approved for a mortgage while you are in a Chapter 13 plan. 
 
FHA and USDA are really the only two options that I know of that offer financing for a borrower with a current Chapter 13 Bankruptcy plan plan, so keep that in mind. 
 
Conventional loan program offered by Fannie Mae will not allow a mortgage loan for someone in a Chapter 13 Bankruptcy plan.
 
On USDA loans, it is possible to get 100% Financing after you have paid into the plan for 12 months with a good pay history. The credit scores needed for a USDA loan approval really need to be above 640 in my past experience in getting them approved. A lot of USDA lenders will say they will do down to 620, but it is very difficult getting them approved. Best to get your scores up to increase your changes in qualifying for a USDA loan. There is not much that difference in getting your scores up to that range if you are at a 620 score now. 
 
With USDA loans, they have income and property eligibility requirements that FHA does not have, so below is a rough run down of FHA vs USDA loan for you:
 

Typically, USDA-eligible properties are located in rural areas. It is a mistake, however, to think that you have to live far out in the country to qualify for a USDA loan. USDA-eligible properties are often located near urban areas.

A property’s eligibility is determined by its location with respect to USDA’s map of eligible locations. The USDA program also places limits on your household income based on median earnings in an area. If you exceed that limit, you can’t obtain a USDA loan.

The FHA, by contrast, does not place limits on household earnings. The FHA, however, does establish a maximum limit on the amount of money that can be borrowed through the program.

 

So if you were in a hurry to buy, after you have been in your Chapter 13 plan for 12 months, I can look at getting you approved to buy a home if you wish:
 
In order to get you pre-approved for your max loan amount, I will need the following items from you. This is a free process and I will give you a copy of your credit report for free!
 
 
Mortgage Pre-Approval Checklist
 
1.  Last 30 days worth of pay stubs
2.  Last 2 years W-2′s
3.  Last 2 years tax returns
4.  Last two months bank statements for all accounts including 401 k or retirement account  if you have one
 
____________________________________________
 
 
Once I get the information above, I can usually get you pre-approved in one day, and get your loan closed in 30-45 days after you get an accepted offer on a home. 
 
Your first house payment usually starts 30-60 days after you close.
 
Your loan pre-approval is usually good for 90 days.
 
I don’t need originals, copies are fine. You can fax or email  me the above documents,  or meet me face-to-face if you wish to make copies and go over your options.
 
Let me know your questions. 
 
Thanks and look forward to helping you. 
 
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
 
 

unnamed (1)KENTUCKY VA REFINANCE LOAN

If you have questions about qualifying as first time home buyer in Kentucky, please call, text, email or fill out free prequalification below for your next mortgage loan pre-approval.

Joel Lobb
Senior  Loan Officer

(NMLS#57916)


Text or call phone: (502) 905-3708

email me at kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.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 views of my employer. Not all products or services mentioned on this site may fit all people

This web site is not the FHA, VA, USDA, HUD or any other government organization responsible for managing, insuring, regulating or issuing residential mortgage loans.

**Download Fair Housing Booklet – CLICK HERE

All approvals and rates are not guaranteed, and are only issued based on standard mortgage qualifying guidelines



Remember, we are even available this weekend for pre-qualifications or questions.  Call our cell phone or email us.  If you miss us, leave a message and we WILL call you back 

How long do you have to wait to get approved for a mortgage loan after a bankruptcy in Kentucky?

GETTING A MORTGAGE LOAN IN KENTUCKY WHEN YOU HAVE HAD A BANKRUPTCY
ARE YOU CURRENTLY IN A CHAPTER 13 BANKRUPTCY OR HAD A CHAPTER 7 BANKRUPTCY IN THE PAST?

Qualifying For A Kentucky Mortgage After Bankruptcy

Home Buyers can qualify for a Kentucky mortgage after bankruptcy:

  • 2 year waiting period to qualify for FHA Loan to qualify for a FHA Loans after discharge of Chapter 7.
  • One year into a Chapter 7 Bankruptcy to qualify for a Chapter Loan into a Chapter 13 Bankruptcy repayment plan.
  • No waiting period after a Chapter 13 Bankruptcy discharge date.
  • 4 year waiting period to qualify for a Chapter 7 Bankruptcy discharge date to qualify for a Conventional Loan.
  • Two year waiting period to qualify for a Chapter 13 after Chatper 13 discharged date to qualify for a Conventional Loan.
  • Four year waiting period to qualify for a Conventional Loan if you had a mortgage part of bankruptcy but the foreclosure needs to be be finalized

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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

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/
 

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. Mortgage loans only offered in Kentucky.

Getting a FHA Loan Approved with the new Guidelines for Student Loans in Kentucky for 2018

2018 KENTUCKY FHA MORTGAGE GUIDELINES FOR APPROVAL WITH STUDENT LOANS

images-3

Student Loan Payment Calculation
Must include all student loans in the borrower’s liabilities, regardless of the payment type or status of payments.

Calculation of monthly obligation, regardless of the payment status, must use either:
the greater of:
• 1 percent of the outstanding balance on the loan; or
• the monthly payment reported on the borrower’s credit report; or

the actual documented payment, provided the payment will fully amortize the loan over its term.
Additional documentation required if the payment used for the monthly obligation is:
• less than 1 percent of the outstanding balance reported on the borrower’s credit report;and
• less than the monthly payment reported on the borrower’s credit report.
Provide written documentation of the actual monthly payment, the payment status, and evidence of the outstanding balance and terms from the creditor.
Guide Reference – 4000.1 II.A.4.b.iv(H) (TOTAL) and II.A.5.a.iv.(G) (Manual)

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50dd9-object_preapproval

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






 
 


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

 

BREAKING: HUD suspends FHA mortgage insurance premium cut

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That didn’t take long! BREAKING: HUD suspends FHA mortgage insurance premium cut

In first moments of Trump presidency, HUD makes it official: FHA mortgage insurance premium cut is suspended “indefinitely.”

The Department of Housing and Urban Development announced it suspended the reduction of Mortgage Insurance Premiums, effective immediately. HUD sent out an announcement just an hour after President Trump was sworn in on Friday, stating that the cuts have been suspended indefinitely. Click the headline for more.

Source: BREAKING: HUD suspends FHA mortgage insurance premium cut

Five strategies for first time home buyers Kentucky 2018

What You Need To Know About A Mortgage… BEFORE You Get One!!!

Qualifying for a Mortgage

Home LoansMortgage companies are in business to make money by lending money that is secured by an asset large enough to sell and recover their capital if the borrower is no longer able or willing to pay the payments. They are not in the business of owning property and would rather not have to foreclose on a loan, repossess the property and sell it to recapture their capital. This does happen but it is not their primary business. They would rather have their borrowers make their payments so that they could collect the interest and move on down the road. To increase their odds of that happening, mortgage companies look at several areas of your financial history to determine if you will meet their standards. This is called Qualifying for a Mortgage.

What the mortgage company finds when they look at these areas will help determine the type of mortgage that is available to you and the interest rate you will pay on the money that you borrow.

The areas that they are interested in looking at are:

Job History

Lenders want to know if you have been in your current job and/or profession for at least two years. They also want to know if you are retired or self-employed.

Income

TaxesMortgage lenders want to know how much your monthly income is before taxes are taken out (Gross Monthly Income). Typically you will be asked to provide check stubs for the last 30 days and Federal Tax Returns or W-2’s for the last two years to prove your income.

If you are self-employed and it is difficult for you to prove your gross income to the lender you may be able to get a “stated income” loan. If that is the route that you take, your income must be “reasonable” for your profession. Since stated income loans are riskier for the lender you will generally have a higher interest rate.

Credit History

Mortgage lenders really like it if you have a history of paying your bills on time. This is reflected in your credit report and FICO score. If you have “bad credit”, you are NOT automatically disqualified from getting a mortgage. Lower credit scores will increase the interest rate that you will be required to pay and sometimes that increase will be quite significant.

Debt Load

You can have an awesome job with an income to make Bill Gates jealous and a great credit score but if you have already acquired too much long term debt you may not qualify for the loan you want.

Assets

Mortgage lenders will want to check your bank accounts to make sure that you have the cash necessary to pay the down payment and closing costs and that you have “reserves” available to make the loan payment. Often, the lender will require 3-6 months reserves. (Reserves can be in a 401K or other retirement account that you can pull the money out of)

Requested Loan Amount

The loan you are requesting will need to be proportional to your ability to make the payments. Be reasonable with your house buying expectations – don’t expect to buy a lot more house than you can afford. The recent housing bust defined the term “house poor” and got a lot of people into financial trouble. Again, mortgage lenders would much rather you make your monthly house payments because everyone loses if they have to foreclose.

Determining YOUR Mortgage Interest Rate

The market place determines the range of interest rates available for any mortgage and the lending rates change daily. The specific interest rate you will pay is based on how well qualified you are and the type of loan you want.

Interest rates are typically based on the answers to these questions:

How Good Is Your Credit Score? 

FICO ScoreThe most widely used score is the FICO score, the credit score created by Fair Isaac Corporation. Lenders use the FICO Score to help them make billions of credit decisions every day. Fair Isaac calculates the FICO Score based solely on information in consumer credit reports maintained by the credit reporting agencies.

FICO credit scores range from 300 to 850. That FICO Score is calculated by a mathematical equation that evaluates many types of information from your credit report, at that agency. By comparing this information to the patterns in hundreds of thousands of past credit reports, the FICO Score estimates your level of future credit risk.

With the top end of the credit score being 850, anything above about 720 is considered excellent. Some local lenders set 740 as the benchmark for their preferred interest rates. Having a lower credit score DOES NOT mean you will not get a loan. You may qualify BUT your interest rate will be higher than someone with better credit.

How Big Is Your Down-Payment?
The Down-Payment is the amount of your own money you are going to put into buying the property. The more money you put into the property on the front end, the lower the risk of you not paying the payments. The amount of your down payment also directly affects the amount of your loan (purchase price – down payment = loan amount). This is called the Loan to Value Ratio (LTV).

The LTV is the percentage of the value of the house that the mortgage will cover (loan amount / purchase price x 100). For example, the property you are interested in buying is selling for $100,000. You have $20,000 for the down-payment and want a mortgage for the other $80,000. The LTV for this mortgage is 80%.

Similar to the LTV is the Combined Loan to Value Ratio (CLTV). The CLTV is used when 2 loans are used to finance the home purchase. You may see or hear terms like “80-20” or “80-15-5”. This refers to the 1st lien percentage (80), the 2nd lien percentage (20 or 15) and the down payment percentage (5).

How Much Debt Do You Currently Have?

It only makes sense that the more debt you have the riskier the loan is for the lender. There is a finite amount of income in all of our households and it all gets allocated every month. Lenders use a “debt-to-income” ratio to determine how qualified you are for the loan based on how much debt you already have.

Your Debt to Income Ratio (DTI) is the percentage of your income that you owe in debt on a monthly basis. For example, if you make $5,000 per month, and have debt payments (car loans, credit cards, student loans, etc.) of $2,000, your DTI ratio is 40%. The higher this ratio is, the less likely you will be to qualify for a low interest rate.

Conventional loans typically have a qualifying ratio of 28/36. FHA loans will sometimes allow for a higher debt load of 29/41 qualifying ratio.

The first number in a qualifying ratio is the maximum percentage of your gross monthly income that can be applied to your mortgage. That includes the loan principal and interestprivate mortgage insuranceproperty taxeshomeowners insurance, and homeowner’s association dues.

The second number is the maximum percentage of your gross monthly income that can be applied to housing expenses and recurring debt. Recurring debt includes monthly payments for carsboatsmotorcycleschild support payments and monthly credit card payments.

 Example:  of a 28/36 qualifying ratio:

Gross monthly income of $5,000 x .28 = $1400 can be applied to housing.

Gross monthly income of $5,000 x .36 = $1,800 can be applied to recurring debt plus housing expenses

Example: of a 29/41 qualifying ratio:

Gross monthly income of $5,000 x .29 = $1,450 can be applied to housing.

Gross monthly income of $5,000 x .41 = $2,050 can be applied to recurring debt plus housing expenses

These are just general guidelines and everyone’s personal finances are unique.

 

Here is a KEY point to remember…

Your credit score is one of the most vital piece of information when qualifying for a loan and you can greatly affect it too. 

Below are the important items I will discuss:

  • What is a credit report?
  • What do mortgage lenders use to determine my credit score?
  • What does FICO stand for?
  • What determines my FICO score?
  • What’s a good FICO score?
  • What if my FICO score is below 620?
  • Can I get a copy of my credit report?
  • Ah Ha! Now I understand all things credit and I’m this much closer to owning my home!

What is a credit report?

A credit report record’s your credit history including information about:

  • Your identity: name, social security number, date of birth and possibly employment information.
  • Your existing credit: credit card accounts, mortgages, car loans, students loans etc.including credit terms, how much you owe, and your payment history.
  • Your public record: Judgments against you, tax liens or bankruptcies.
  • Recent Credit Inquiries: Requests for your information from companies extending credit such as credit card companies, auto loans, etc.

Be aware, credit card companies, car companies and mortgage lenders use slightly different models to determine credit risk. Today we are focusing on Mortgage related credit.

How do lenders calculate my credit score?

Your credit score is the key to your castle. Your home is most likely the most expensive purchase you will ever make. Therefore, when buying a home, lenders use a different system for assessing risk than credit card companies or even auto loan companies use.

Mortgage lenders use a comprehensive system of checking credit called a Residential Mortgage Credit Report (RMCR), commonly called a “Tri-Merge” report. The RMCR report combines your three credit reports from the three national credit bureaus, Equifax, Experian, and TransUnion. Each credit reporting agency calculates your credit score or FICO Score differently. Therefore, pulling from all three bureaus gives lenders a more complete picture of your credit behavior.

Once pulled, lenders use the average of these three scores, usually the middle score, to determine loan qualification and interest rate. For example, if Equifax gives you a 720, Experian a 730 and TransUnion a 740, the lender will use the 730 FICO Score to help determine the terms of your mortgage. If you are applying for a loan jointly, your partner’s three reports will also be pulled.

What does FICO stand for?

FICO stands Fair, Isaac and Company. Over 25 years ago, lenders began using FICO’s scoring model, or algorithm, to fairly and more accurately determine a person’s credit risk. Since it’s inception, FICO’s continually updates its’ algorithms to reflect more current lending trends and consumer behaviors. Today, FICO Scores are used by over 90% of enders. Importantly, your FICO score can impact your loan interest rates, terms, approvals and more.

What determines my FICO score?

A Mortgage FICO score is determined by an algorithm that generally looks at five credit factors including payment history, current level of indebtedness, types of credit used, length of credit history and new credit accounts.

What’s a good FICO score?

To qualify for a conventional loan, most Mortgage lenders require a FICO score of 620+. The best interest rates go to borrowers with a 740+ FICO score. For each 40 point drop, borrowers can expect to see a slightly higher interest rates by about 0.2 percentage points.  If a borrower drops below 660, the increase is likely to be twice as big, a 0.43 percentage point increase. If your credit score is below 620, it is very difficult to get a conventional loan in today’s marketplace. However, don’t be discouraged. You may still be able to buy a home.

Qualifying Credit Scores

What if my FICO or credit score is below 620?

If your score is below 620, you may still be able to buy a home. There are several options:

  • Put more money down. Some lenders offset a weak credit score with a higher down payment. A higher down payment gives you more equity in your home, lowering the lender’s risk.
  • You may qualify for a non conventional government issued loan such as an FHA, Veterans Affairs and/or U.S. Department of Agriculture loan which have less stringent lending requirements.
  • You may work to get that credit score up!
    • Correct any errors on your report. Analyze your credit items line by line. If you notice a mistake, dispute it right away with either the credit bureau providing the report or the company that providing the incorrect information to the credit bureau.
    • Make all your payments on time. Late payments are the No. 1 way to lower  your credit score.
    • Pay down revolving debt. Keeping your credit balances low helps to raise your score.
    • Sit back and relax. As long as you’re paying down debt and making payments on time, your credit score will eventually rise on its own.

Can I get a copy of my credit report after a lender has pulled it?

Yes! In fact, you can get one free credit report every twelve months from each of the nationwide credit bureaus—Equifax, Experian, and TransUnion. You may also purchase your credit score at any time from any of the credit bureaus. Some Mortgage lenders will tell you your score when you apply for a loan or even give you a copy of your report but they are not required to do so. However, if a lender denies you credit, under the Fair Credit Reporting Act (FCRA) you are entitled to a free copy of your personal credit report if you have received notice that in the past 60 days you have been declined credit.

You ALWAYS get a free copy of your credit report from me.

If you’re ready to buy a new home and want to shop around for the best deal on a mortgage…

Looking for a mortgage, auto or student loan may cause multiple lenders to request your credit report, even though you are only looking for one loan. To compensate for this, the score ignores mortgage, auto, and student loan inquiries made in the 30 days prior to scoring. So, if you find a loan within 30 days, the inquiries won’t affect your score while you’re rate shopping. In addition, the score looks on your credit report for mortgage, auto, and student loan inquiries older than 30 days. If it finds some, it counts those inquiries that fall in a typical shopping period as just one inquiry when determining your score. For FICO scores calculated from older versions of the scoring formula, this shopping period is any 14 day span. For FICO scores calculated from the newest versions of the scoring formula, this shopping period is any 45 day span. Each lender chooses which version of the FICO scoring formula it wants the credit reporting agency to use to calculate your FICO score.

What Type of Loan Are You Looking For?

40 year fixed, 30 year fixed, 20 year fixed, 15 year fixed, 10 Year Fixed, Adjustable Rate, etc. All of these loan types have different interest rate ranges.

Locking Your Interest Rate

Once you have completed a loan application, determined what type of loan you want and qualified for that loan you can “lock” the interest rate for that loan. Locking the Interest Rate means, for the period of the “lock” you are guaranteed that interest rate. Lock periods are typically 15, 30 or 60 days, although you may be able to get an extended lock period.

Once you lock your interest rate:

If you do not close on the loan before the lock period expires, you will NOT have a guaranteed interest rate anymore. And, the longer the lock period, the higher the rate will be. For example, a 15 day lock may be at 5.125%, a 30 day lock at 5.25%, and a 60 day lock at 5.375%. So, before locking your loan, be sure you are not locking for too long a time or for too short a time.

Interest rates fluctuate daily and may go up or down. By locking your rate, you are betting that rates will go up in the future.

 What does “Buying Down” the Interest Rate Mean?

You can reduce the interest rate on your mortgage by paying “points” at closing. A point is 1% of the value of the loan, so a point on a $200,000 loan is $2,000. If you “buy down” you loan to a lower interest rate you will have lower monthly payments and pay less interest over the life of the loan. However, “buying down” you loan to a lower interest rate means more money out of your pocket on the front end when you close the loan. You should do the math and weigh each side of the equation before making a decision about buying down the interest rate or not.

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What Are The Closing Costs and Fees?

There are four types of closing costs and fees…

Those charged by the mortgage company and/or mortgage broker, those charged by 3rd party vendors, those charged by the Title Company, Escrow Company or Escrow Attorney and Pre-Paid Charges.

Lender Fees

These can include loan origination fees and Broker fees which are usually a percentage of the loan amount; administrative fees and application fees, processing fees and underwriting fees. These last fees usually run from $100 to $500, and ALL of them are negotiable.

3rd Party Vendor charges

These are charges collected by the lender and paid to outside companies that provide a service. These are not usually negotiable and can include appraisal charges, flood certification fees, courier charges, document prep fees, mortgage lender attorney fees, etc.

Title Company charges

These are the fees charged by the Title Company, Escrow Company or Escrow Attorney. They are usually set by the state and are not negotiable. These charges include title insurance, attorney fees, state/county/city registration fees, etc.

Pre-Paid Charges

If the lender will be establishing an escrow account to pay taxes and insurance, the buyer will pre-pay taxes and insurance to establish an escrow account and will pre-pay the interest on the loan until the end of the month in which the loan closes.

 Does The Closing Date Really Matter?

The day you choose to close determines the amount of pre-paid interest you will have to pay. Closing at the end of the month means that you will pay less pre-paid interest. For example, if you close on October 1st you will pay 31 days of pre-paid interest. If you close on October 31st you will pay 1 day of pre-paid interest.

When Is My First Payment Due?

It doesn’t matter what day of the month you close on, you will not have your first loan payment due until a month has passed. So, if you close in October, your first payment is due in December – you get November for free!

What Is PMI?

Private Mortgage Insurance (PMI) is required on all loans that have a LTV greater than 80%. PMI is an insurance premium that you pay every month as part of your monthly payment. However, PMI is not intended to protect you. PMI is insurance coverage that protects the mortgage lender against default on the loan. If you stop making your payments, the mortgage lender is paid a percentage of the loan amount (usually 25% to 35%) by the insurance company.

We suggest that our clients use a local mortgage lender and avoid the big banks. Local lenders provide excellent service, you talk to the same person throughout the loan process, if something is (or isn’t) happening with the loan they can easily check on it with someone right there in their office.

What Other Questions Do You Have?

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If you have mortgage questions, ask them in the comments section so others will get the answer too.

If you want a personalized answer for your unique situation call, text, or email me.

 

 

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, (http://www.nmlsconsumeraccess.org). Mortgage loans only offered in Kentucky.

 

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Posted By Blogger to Kentucky First Time Home Buyer Mortgage Loans

Kentucky First Time Home Buyer Loan Programs for FHA, VA, KHC, USDA, RHS, Fannie Mae Home Mortgage Loans in Kentucky for 2018

Financial expert Mark Lamkin explains the best way get your finances in order and start your search.

Source: Five strategies for first time home buyers

kmnj10kdap2017 00% Financing Zero Down Payment Mortgage Loans for Kentucky Home Buyers. For the first First Time Homebuyer, I hope you find this website educational and informative, giving you the confidence when buying your first Kentucky Home. USDA, VA, KHC, and FHA loans all offer $0 Down Home Loan Options-Text or Call for your free application 502-905-3708- Email Kentuckyloan@gmail.com Equal Housing Lender NMLS#57916. This website is not affiliated with any government agency.

unnamed-2 Joel Lobb Senior Loan Officer (NMLS#57916) American Mortgage Solutions, Inc. 10602 Timberwood Circle, Suite 3 Louisville, KY 40223 text or call my phone: (502) 905-3708 email me at 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…

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