Student Loans In Collections, What Can I Do to get Approved For A Kentucky Mortgage ?

Student Loans In Collections, What Can I Do?
If you have public student loans in collections, you really have three options to resolve it so it is not a CAIVRS issue.
1.      Pay it off in full – Not typically an option because very rarely do the clients have the funds to do so.
2.      Consolidation – Only takes about 90 days to consolidate and resolve CAIVRS issues. However, you push forward the last activity dates, DLA, and also introduce a new credit trade line that dilutes the length of the credit history. So you will normally see a drop in credit score.
3.      Rehabilitation – It is the slowest of all the options, but is the best thing for the clients’ credit scores. It is a 9 month commitment and once the client makes 9 consecutive payments, they will change the collection status to a good standing status. This will typically net a 40-100 point boost in the score depending on how many other collections are on the credit report.
If your client does not know who is servicing the student loan, they can contact the Student Loan Default Resolution Team at 1-800-621-3115 or visit the website at myeddebt.ed.gov
Bonus Tip: Private student loans do not adhere to consolidation or rehabilitation rules. If the client has private student loans in collections they will need to pay them off in full, or they will need to set up a payment plan on them. They will still remain in collections with a payment, but if you can get a qualified credit score you can push forward the loan including the liability payment towards the debt to income ratio.
As always, we bring you the best content so you can do what you do best, CLOSE LOANS! If you aren’t already sending us every credit challenged borrower you have, what is stopping you?
Guidelines for KY FHA, VA, USDA and VA Mortgage loans with Student Loans on A Credit Report:
Kentucky Fannie Mae or Conventional Guidelines for Student Loans:
  • If a monthly payment is on the credit report, the lender may use that amount for qualifying purposes.
  • If a monthly payment is on the credit report is incorrect, the lender may use the monthly payment on the most recent student loan statement
  • If the monthly payment on the credit report is zero, the lender must use one of the following options to calculate the payment for qualifying purposes
  1. Document the borrower is on an income driven payment plan and the actual monthly payment is zero
  2.  Use 1% of the outstanding student loan balance as the monthly payment
  3. Calculate a fully amortized payment using documented loan repayment terms
Kentucky FHA Mortgage Loans Guidelines:
Regardless of the payment status (currently in payment or deferred), the lender must use either:
  • The greater of:
  1. 1% of the outstanding balance; or
  2. The monthly payment reported on the credit; or
  •  Calculate a fully amortized payment using documented loan repayment terms
Kentucky USDA or Rural Housing Guidelines:
 
 
Regardless of the payment amount reporting on the credit, the lender must include the payment as follows:
  • A permanent amortized, fixed payment may be used in the debt ratio when the lender retains documentation to verify the payment is fixed, the interest rate is fixed, and the repayment term is fixed.
  • Payments for deferred loans, Income Based Repayment (IBR), Graduated, Adjustable, and other types of repayment agreements which are not fixed cannot be used in the total debt ratio calculation. One percent of the loan balance reflected on the credit report must be used as the monthly payment. No additional documentation is required.
Kentucky  VA Mortgage Guidelines for Student Loan:
  • If the borrower can document the student loan will be deferred 12 months from the closing date, the monthly payment does not need to be considered
  • If a student loan is in repayment or scheduled to begin repayment within 12 months from the closing date, the threshold payment amount must be calculated by  using 5% of the loan balance divided by 12 months
  • If the payment reporting on the credit report is greater than the threshold payment calculation amount, then the credit report payment must be used for ratios.
  • If the payment reporting on the credit report is less than the threshold payment calculation and the lender is using the lower payment to qualify the borrower then:
  1. A statement from the student loan servicer reflecting the actual loan terms and payment information must be included in the file.
  2. The statement must be dated within 60 days of closing
  3. It is the underwriter’s discretion to use the lower payment

As you can see, Fannie Mae or Conventional loans is the most lenient when it comes to qualifying for a mortgage loan with someone that has a lot of student loans on their credit report.

Here are action steps you can take right now to buy a home in Kentucky in 2019


1. Focus on your credit score

FICO credit scores are among the most frequently used credit scores, and range from 350-800 (the higher, the better). A consumer with a credit score of 750 or higher is considered to have excellent credit, while a consumer with a credit score below 620 is considered to have poor credit.

To qualify for a mortgage and get a low mortgage rate, your credit score matters.

Each credit bureau collects information on your credit history and develops a credit score that lenders use to assess your riskiness as a borrower. If you find an error, you should report it to the credit bureau immediately so that it can be corrected.


2. Manage your debt-to-income ratio

Many lenders evaluate your debt-to-income ratio when making credit decisions, which could impact the interest rate you receive.

A debt-to-income ratio is your monthly debt payments as a percentage of your monthly income. Lenders focus on this ratio to determine whether you have enough excess cash to cover your living expenses plus your debt obligations.

Since a debt-to-income ratio has two components (debt and income), the best way to lower your debt-to-income ratio is to:

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.

3. Keep credit utilization low on your credit cards

Lenders also evaluate your credit card utilization, or your monthly credit card spending as a percentage of your credit limit.

Ideally, your credit utilization should be less than 30%. If you can keep it less than 10%, even better.

For example, if you have a $10,000 credit limit on your credit card and spent $3,000 this month, your credit utilization is 30%.

Here are some ways to manage your credit card utilization:
set up automatic balance alerts to monitor credit utilization
ask your lender to raise your credit limit (this may involve a hard credit pull so check with your lender first)
pay off your balance multiple times a month to reduce your credit utilization


4 . Look for down payment assistance 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 $6000

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

click here for directions to our office

Text/call:      502-905-3708
fax:            502-327-9119
email:          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

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.

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KHC Loan Programs

KHC Loan Programs.

Kentucky Home Buyers

 Effective with new reservations as of Monday, January , 2019, properties located in one of the counties considered Middle Appalachia or Lower Mississippi Delta will have access to a $1,500 closing cost grant. Borrowers must be under the specific income limits per the Duty to Serve (DTS) program.
KHC recognizes that down payments, closing costs, and prepaids 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.

Hardest Hit Fund (HHF) DAP For Kentucky 2019

Available to Christian County only 11/15/2018

  • Zero percent interest rate for first-time home buyers.
  • A non-repayalbe second mortgage for $10,000.
  • Forgiven after five years.
  • Home purchase must be located in Christian county.
    • No other counties will be eligible.
  • New construction properties are not allowed.
    • Property has to have been previously occupied.
  • Applicants must meet Secondary Market Income and Purchase Price Limit.

Regular DAP for Kentucky Home Buyers in 2019

  • Purchase price up to $301,294 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 for Kentucky Home Buyers in 2019

  • Purchase price up to $301,294 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.

More about down payment and closing costs

  • No liquid asset review and no limit on borrower reserves.
  • Specific credit underwriting standards may apply to down payment programs.
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 50% respectively.


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

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 definitely recommend 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 Bellisle 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
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.


Down Payment Assistance Programs in Kentucky

Down Payment Assistance Programs in Kentucky

Kentucky First Time Homebuyer Down Payment Assistance for Kentucky First Time Home Buyers for $4500 to $6000 from Kentucky Housing DAP Funds

Kentucky Housing Corp. will raise the gross annual income to $40,000 and the Purchase Price to $130,000! That is a 2% fixed Rate for 30 yrs for Kentucky Home Buyers using the KHC Program.

Regular DAP

  • Purchase price up to $283,900 with Secondary Market or $255,500 with MRB.
  • Assistance in the form of a loan up to $6,000 in $100 increments.
  • Repayable over a ten-year term at 5.50 percent. A DAP of $6,000 over ten years at 5.50 percent interest would equal a payment of $65.12.
  • Available to all KHC first-mortgage loan recipients.

Affordable DAP

  • Purchase price up to $283,900 with Secondary Market or $255,500 with MRB.
  • Assistance up to $4,500.
  • Repayable over a ten-year term at 1.00 percent.
  • Borrowers must meet Affordable DAP household income limits

MRB Special Funding Program 


KHC has $5 million available at 2 percent interest rate, fixed for 30 years. This special funding program is available on a first-come, first-served basis starting today, Wednesday, March 8, 2017, with new reservations. This program is targeted to:
  • Households whose gross annual income does not exceed $40,000.
  • An existing or new construction property (purchase price limit $130,000) in a county not receiving HHF DAP funds*.
  • 640 minimum credit score.
  • FHA, VA, or RHS first mortgage options.
  • Households who meet one of the following criteria:
    • At least one of the home buyers is age 62 or older.
    • At least one member of the household is disabled and receiving disability income.
    • A single-or two parent household with at least one dependent child under the age of 18 living in the household.


http://www.emailmeform.com/builder/form/0bfJs9b6bK8TGoc6mQk9hIu
 
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/
 
— 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.
 
 
 2 percent interest rate, fixed for 30 years

 

 

 

 

 

 

By Timothy Bodamer , eHow Contributor

  1. in Kentucky with down payment assistance programs.
    • In the Bluegrass State of Kentucky, there are a variety of programs to financially assist potential homeowners. These programs are based on a variety of criteria, including income and demographics. Kentucky residents can use these programs to fulfill the American dream for their family.

    American Dream Downpayment Initiative

    • The American Dream Downpayment Initiative is provided in Kentucky to help potential homeowners with down payments and closing costs. The ADDI is provided to first-time homeowners who make less than 80 percent of the median income of the area in Kentucky. Up to $10,000 or 6 percent of the purchase price (whichever is greater), can be used for down payments, closing costs and rehabilitation efforts to fix up the purchased home. Repairs must be completed within one year of the home purchase.

      U.S. Department of Housing and Urban Development
      451 7th Street S.W.
      Washington, DC 20410
      202-708-1112
      hud.gov

    REACH Kentucky

    • REACH Kentucky is a down payment program used for new or existing homes. The REACH program offers loans that serve as a second mortgage repayable at zero to 2 percent. The home buyer must be the primary resident. Clients must meet low to moderate income standards. This income varies from county to county. To qualify, the first-time homeowners must complete a home buyer education course and provide $500 of their own money.

      REACH Inc.
      733 Red Mile Rd.
      Lexington, KY 40504
      859-455-8057
      reachky.com

    The Kentucky Housing Corporation

    • The Kentucky Housing Corporation was founded in 1972 as part of the Commonwealth of Kentucky‘s Finance and Administration Cabinet. Kentucky Housing provides down payment and closing cost assistance to Kentucky residents. The regular down payment assistance plan is available to all potential homeowners who reside in Kentucky. The program provides up to $2,500 in $100 increments. This loan is repayable over five years at 6 percent interest. Other down payment options are available for low-income residents. Down payment assistance is available up to $10,000 and is forgiven after the home buyer stays in the home for five years. This assistance is provided based on income guidelines. These guidelines are based on a county-by-county basis.

      The Kentucky Housing Corporation
      1231 Louisville Rd.
      Frankfort, Kentucky 40601
      502-564-7630 ext. 291
      kyhousing.org

Read more: Down Payment Assistance Programs in Kentucky | eHow.com http://www.ehow.com/list_6518335_down-payment-assistance-programs-kentucky.html#ixzz1O1jSel5B