What are the Kentucky FHA Credit Score Requirements for 2017 Mortgage Loan Approvals?

 

Getting a FHA loan in Kentucky in 2017 you will be confronted with minimum credit score requirements set forth by FHA and the lender. Even though FHA will insure the mortgage loan at a certain credit score, you will see that lenders will create  “credit-overlays” to protect their risk and ask for a higher credit score.

So keep in mind when you are getting a FHA loan in 2017, some lenders will have higher credit score minimums in addition to the FHA Mortgage Insurance program.

For a Kentucky Home buyer wanting to purchase a home or refinance their existing FHA loan, FHA requires a 3.5% down payment and the borrower must have a 580 FICO Credit Score. If the score is below 580, then you would need 10% down and still qualify on a manual underwrite.

You must have a FICO score of at least 500 to be eligible for an Kentucky  FHA loan. If your FICO score is from 500 to 579, your down payment on the loan is 10 percent of the loan.

If your FICO score is 580 or higher, your down payment is only 3.5 percent. If your credit score is less than 580, it may be more cost effective to take the necessary steps to improve your score before taking out the loan, rather than putting the money into a larger down payment.

How do they get the credit score:  There are three main credit bureaus in the US. Equifax, Experian, and Transunion. The three scores vary but should be relativley  close as long as the same creditors are reporting to the same bureaus.

You will get a variation in the scores due to all creditors or collection companies don’t report to all three bureaus. This is why they take the mid score.  So if you have a 590 experian, 680 equifax, and 620 transunion, your qualifying credit score would be 620

Based on my experience with lenders that I deal with in Kentucky on FHA loans,  most lenders require 620 middle credit score for consideration for loan approval.

How do they get the score:  They take the mid score, so if you have a 590 experian, 680 equifax, and 620 transunion, your qualifying score would be 620.

 

home-loan-with-low-credit-scores-150x128

Kentucky FHA Loans with less than 620 Score

If your score is below 620, a manual underwrite is where the AUS (Automated Underwriting System) refers your loan to an human being, and they look at the entire file to see if they can overturn and approve the mortgage loan because the Desktop Underwriting Automated Software could not approve you.

With scores below 620, they typically will want to verify your rent history, have no bankruptcies in last two years, and no foreclosures in the last 3 years.

If you have had any lates since the bankruptcy this will probably result in a denial on a refer manual underwrite file.

Your max house payment will be set at 31% of your gross monthly income,  and your new house payment plus the bills you are paying on the credit report cannot be more than 43%.

Typically, on scores below 620 for FHA loans, they will also look at reserves or money you have saved-up after the loan is made to try and qualify you. For example, if you have a 401k or savings account that have at least 4 months reserves (take your mortgage payment  x 4) and this would equal your reserves. They look at this as a rainy day fund and could help you keep up on your bills if you were unemployed or could not work.

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

If you are looking to take a FHA loan in 2017 to buy or refinance a home in Kentucky, please contact me below with your questions about the credit score requirements and how they affect your loan approval.

Joel Lobb
Senior  Loan Officer
(NMLS#57916)
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 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.
All loans and lines are subject to credit approval, verification, and collateral evaluation and are originated by lender. Products and interest rates are subject to change without notice. Manufactured and mobile homes are not eligible as collateral.

 

 

 

Kentucky FHA Mortgage Guidelines Changes for 2015

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Did You Know that Kentucky Mortgage FHA Income Requirements changed in October 2015?

• Job Changes –

FHA loan rules instruct lenders to, favorably consider a borrower for a mortgage if he/she changes jobs frequently within the same line of work, but continues to advance in income or benefits. In this instance, income stability takes precedence over job stability.

And FHA loan applicants who have been out of a job for a while but have since returned to employment may have their income considered effective and stable when recently returning to work after an extended absence if he/she:
–is employed in the current job for six months or longer, and
–can document a two year work history prior to an absence from employment using traditional employment verifications, and/or copies of W-2 forms or pay stubs.

Note: An acceptable employment situation includes an individual who took several years off from employment to raise children, then returned to the workforce.

• Employment Gaps –

For borrowers with gaps – FHA does not require a minimum length of time that a borrower must have held a position of employment. However, the lender must verify the borrowers employment for the most recent two full years, and the borrower must:
–explain any gaps in employment that span one or more months, and
–indicate if he/she was in school or the military during the most recent two full years, providing evidence supporting this claim, such as college transcripts, or discharge papers.

When analyzing the probability of continued employment, the lender must examine –the borrowers past employment record
–qualifications for the position
–previous training and education, and
–the employers confirmation of continued employment

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Joel Lobb
Senior Loan Officer
(NMLS#57916)

 

phone: (502) 905-3708
Fax: (502) 327-9119
kentuckyloan@gmail.com
http://www.mylouisvillekentuckymortgage.com/

 

 

 

 

FHA mortgage insurance premiums won’t be going down in 2015 | 2014-11-18 | HousingWire

FHA mortgage insurance premiums won’t be going down in 2015 | 2014-11-18 | HousingWire.

Frequently Asked Questions about FHA Kentucky Home Loans

Frequently Asked Questions about FHA Kentucky Home Loans.

via Frequently Asked Questions about FHA Kentucky Home Loans.

 

FHA to 50%…up to 55% with comp factors and a strong borrower

Manual UW’s on FHA/ to 620 Score

FHA purchases and R/t refi’s down to a 580 with DU Approved Eligible

— 

 
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

What are the 2014 Kentucky FHA Guidelines for credit scores, down payments, cash out, and mortgage insurance requirements for a FHA Mortgage loan?

Kentucky FHA Program guidelines have been updated as follows:

For a Kentucky FHA Purchase Loan, we can go down to a 600 credit score with the minimum down payment of 3.5%.  No bankruptcies or foreclosures in the last 2 years.

If you are getting cash out, then the max loan to value or equity position is limited to 85% of the homes value. For example, if you had a home that was valued at $100,000, then the max loan for a FHA Cash Out in Kentucky would be $85,000.00. You still have to may mortgage insurance for life of loan so think carefully about using FHA for a cashout refinance.

The maximum debt to income ratios will be set by the AUS when we run it, but for a refer, it will be limited to 31% and 43% respectively. For example, if you make $3000 a month gross income, the max house payment would be $930.00 piti, and the maximum monthly payments including the new house payment would be $1290.00. So in the above example, the most you could have left in monthly bills listed on the credit report would be $360.00–If you had child support this would count in the dti calculation on the backend ratio of 43%

The seller can pay up to 6% of the buyer’s closing costs and prepaids (property taxes, home insurance for 1st years escrows) of the sales price. So, if you purchased a home for $100,000.00, the seller could give you a concession at closing to pay your closing costs and prepaids. A lot of Kentucky First Time homebuyers use this to limit their cash to close.

The minimum down payment of 3.5% for Kentucky FHA Loans can come from a family member in the form of a gift, or can be borrowed from a 401k, retirement account, or secured asset like a car.

• Seller must own the property a minimum of 90 days prior to the contract date.

FHA loans do not require a termite or home inspection, but they do require a HUD appraisal by a FHA approved Appraiser.

The following changes are effective for all Kentucky  FHA case numbers assigned on or after June 3, 2013: FHA is changing the duration for the collection of MIP
o For all mortgages with an original principal LTV of 90% or less, regardless of loan term, the annual MIP will be assessed for 11 years.
o For all mortgages with an original principal LTV greater than 90%, regardless of loan term, the annual MIP will be assessed for the entire life of the loan.

Loans of 15 year terms or less with LTV 78% or less will pay an MIP amount of 45 bps.

FHA Streamlines Prior to June 2009
FHA Streamlines with case numbers dated June 11, 2012 or later will have new MIP rules applied. If the loan being refinanced was endorsed on or before May 31, 2009, the new Streamline will receive a flat annual MIP of 55 basis points, regardless of loan amount, and the UFMIP ratio will decrease to 0.01% of the base loan amount.

 

 

2014 Kentucky FHA Loan Guidelines for Credit, Down payment, income,

Senior Loan Officer
(NMLS#57916)

American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223

phone: (502) 905-3708
Fax: (502) 327-9119
kentuckyloan@gmail.com

Company ID #1364 | MB73346
http://mylouisvillekentuckymortgage.com/

 

FHA loans are secured through the FHA, or Federal Housing Administration
FHA loans are secured through the FHA, or Federal Housing Administration

Louisville Ky FHA Mortgage Loans

NMLS #57916

Louisville Ky FHA  Mortgage loans

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Kenttucky Fhamortgage Loansupdated Guidelines Louisville Ky

Kenttucky Fhamortgage Loansupdated Guidelines Louisville Ky.