Mortgage Forbearance: Guidelines for Homeowners - NerdWallet

Mortgage Forbearance: Guidelines for Homeowners - NerdWallet




FORBEARANCES AGAIN

I am still getting a lot of questions in regard to forbearances so I am going to repeat and update some information.

• Who Qualifies for Forbearances? Anyone suffering financial hardship b/c of the COVID-19 crisis. Some servicers will take the borrower’s word but many will request “proof” of some sort. Borrowers who are not in financial peril should be careful about claiming they are, as they risk fraud charges.
• How Do I Obtain a Forbearance? Borrowers need to contact their servicer and apply for it. They should not simply stop making payments.
• Do I Have to Pay Back Missed Payments? Yes – without a doubt. Some servicers will want all of the missed payments repaid as soon as the forbearance ends; some will want to restructure entire loans; and some will want to set up repayment over a period of months. Servicers will most likely try to work out the repayment system when borrowers apply for forbearances.
• Does It Matter What Type of Mortgage I Have? Yes. Forbearances will be easier to obtain for conforming (Fannie/Freddie), FHA and VA loans. Jumbo and non-QM borrowers, however, will have a more difficult time obtaining forbearances b/c the government does not have as much influence over those channels.
• How Will a Forbearance Affect My Credit? If borrowers obtain a formal approval for a forbearance, it should not affect their credit. If borrowers just stop making payments, however, without getting an approval from their servicer, it will likely impact their credit – severely. There is a caveat here too: while credit reports will not show late payments when borrowers get their forbearances approved, future lenders will be able to see if a borrower obtained a forbearance in many cases, and that could affect credit decisions. This is something we saw with loan modifications after the 2008 crisis.
• Should I Go Through With My Purchase or Refinance If I Am Likely to Seek a Forbearance? Absolutely not. Not only will it be extremely difficult for borrowers to obtain a formal forbearance approval for a recently funded loan, missing payments on newly funded loans put the originating lender in extreme financial peril.

Here is a short article from Nerd Wallet with additional

info.https://www.bankrate.com/mortgages/everything-you-should-know-about-mortgage-forbearance/

2020 Kentucky VA Mortgage Guidelines

Things to know about getting a VA Mortgage Loan in Kentucky in 2020

1. There isn’t a cap on the Kentucky VA loan amount someone could borrow.

2. Kentucky VA loans cannot be used to purchase vacation homes or second homes.

3. Some surviving spouses are eligible.

4. The VA doesn’t provide borrowers with the loan.

5. Borrowers must receive a Certificate of Eligibility.

Kentucky VA home loans don’t have a limit, are only available through lenders, must be used for primary residences and eligible to surviving spouses, and require a Certificate of Eligibility.Kentucky VA home loans don’t have a limit, are only available through lenders, must be used for primary residences and eligible to surviving spouses, and require a Certificate of Eligibility, certain credit score and income and residual income requirements.



Unlike many other mortgage loans, Kentucky VA loans don’t have a set cap on how much money a borrower could receive, according to the VA. This essentially means there isn’t a limit. However, the VA itself does, with it only assuming liability on a certain amount.


"The loan limits are the amount a qualified Kentucky Veteran with full entitlement may be able to borrow without making a down payment."


Specifically, “there are limits on the amount of liability VA can assume, which usually affects the amount of money an institution will lend you," states the department. “The loan limits are the amount a qualified Veteran with full entitlement may be able to borrow without making a down payment. These loan limits vary by county, since the value of a house depends in part on its location.”


These limits also tend to change from year to year, and can be viewed on the VA’s official website.



One of the stipulations of a VA home loan is that the property being purchased must be used as the borrower’s primary residence. This means any vacation homes, as well as properties buyers are interested in purchasing for investment purposes, do not qualify. However, buyers aren’t limited to only single-family homes. Multi-family homes, some condominiums, and manufactured homes, are also eligible—they just need to be approved by the VA beforehand. In some instance, you can have two VA loans outstanding in Kentucky


As aforementioned, VA home loans were developed to help veterans, active-duty service members and reservists afford a home. Still, there are some exceptions in which surviving spouses may be eligible, as well. Several conditions in which this could take place, as described by the VA, include:


A surviving spouse of a veteran who was killed in action or by a combat-related disability may qualify, for example, as long as he or she is not remarried. A spouse of an active-duty service member “missing in action or a prisoner of war” could obtain this type of loan, too.


Additionally, any surviving spouses who remarry on or after age 57, and on or after December 16, 2003, or who are married to a “certain totally disabled” veteran “whose disability may not have been the cause of death,” are also considered an eligible candidate.


The VA created the loan and guarantees it, but the agency doesn’t actually provide qualified borrowers with a VA loan. Applicants would need to be approved by a trusted mortgage lender and obtain the funds that way, instead. As a result, it’s important for home buyers to know what exactly to​. ​

Although borrowers have to apply for a VA home loan via a lender, they must receive a Certificate of Eligibility (COE) by the VA to be approved, which they can do online, via mail, or through their lender. A COE simply proves that they are suitable candidates and meet the loan’s qualifications. Since different types of buyers could be eligible, the VA breaks down what each one would need to obtain a COE:


For instance, any veterans applying need a DD Form 214, and are “required to have a copy showing the character of service (item 24) and the narrative reason for separation (item 28).”

6. What credit score do I need to qualify for a VA Home Mortgage in Kentucky?

On paper, VA mortgage guidelines state that they don't have a minimum credit score. However, lenders will create overlays, meaning they can and will institute certain credit score requirements for a VA mortgage loan approval in Kentucky. This will vary from lender to lender. Most VA lenders will want a 620 middle credit score, but there are some VA lenders that will go down to the 500 credit score we work with, but be prepared to wait, because it could take a while or could end up getting turn-downed in the end.


It is best to get your credit scores up before applying for a VA mortgage loan if they are under 580 in my opinion. The VA pre-approval process uses the automated underwriting system or AUS (software) to pre-approve every veteran and depending on what the underwriting recommendation is, this could make or break your pre-approval and chances of getting approved for the VA loan.

Can I Kentucky a VA Mortgage loan after a Bankruptcy.

Yes you can. It depends on what type of bankruptcy you had. Kentucky VA Loans also allow Veterans and active military to bounce back faster after a bankruptcy, foreclosure or short sale. You can be eligible for a ​Kentucky ​VA Loan two years after a Chapter 7 bankruptcy discharge; one year after filing a Chapter 13 bankruptcy; and two years following a foreclosure. Some lenders have no required waiting period following a short sale.

What is residual income and how does it affect my VA loan Approval in Kentucky

VA is the only loan program out there when compared to FHA, USDA, Fannie Mae and Freddie Mac for Conventional loans that states you must have a certain income left over after you take your gross monthly income and subtract your monthly bills on the credit report along with new VA house payment along with taxes (federal, state, local, social security) along with child support or 401k loans along with utilities​--


​It is based on home size and where the property is located. ​For example, in Kentucky, which is located in the South region below, a qualifying VA mortgage applicant would need to have $1039 left over in residual income for family size of 5 to qualify for a mortgage loan


​There are no exceptions on this.

D​o you have questions about qualifying for a VA Mortgage loan in Kentucky .

Call, text, or email below your questions. I am a Veteran myself (19 kilo) former tanker, and I have originated over 100 VA loans in my mortgage lending career in Kentucky.






Joel Lobb (NMLS#57916)


American Mortgage Solutions, Inc.


10602 Timberwood Circle Suite 3


Louisville, KY 40223


Company ID #1364 | MB73346


kentuckyloan@gmail.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/

Louisville VA Streamline Refinance IRRRL

What are the qualification for a Kentucky VA Home Loan?

CONSISTENT JOB AND INCOME STABILITY

• For a currently serving service member, your service will immediately qualify as a stable job.

• For Kentucky veterans no longer on active duty, you’ll want to have at least 12 months at your current job or be in a similar line of work to your most recent work. Two years or more with an employer is the ideal job history for a mortgage.

• If you started a new job recently, you may be able to reference your previous work history, work in the service, or educational background to support the stability of your new job. In addition to standard paperwork, if it’s a brand new job, we’ll also be looking for an offer letter.

• Some types of jobs are inherently less stable than others. If you’re receiving a salary, your income is guaranteed short of job loss. If you’re receiving an hourly pay, then there is a good idea of what you’ll likely be making. But if you’re working any type of commission related job, your income is volatile. It could be high one month and zero the next month. For commission jobs, you’ll want to have at least two years of history reported to your tax returns. We’ll then be able to use a two-year average to determine what we can use as your monthly income.

GOOD CREDIT SCORES AND CREDIT HISTORY

•          There is no minimum credit score for VA, but most Kentucky VA lenders that I            work with  will want a 580 to 620 minimum with no foreclosure or                                bankruptcies in the last 2 years

• You should have zero late payments on either your rent or mortgage within the last 12 months – preferably having zero late payments. If this isn’t possible, focus on keeping all current accounts paid on time. Your new history will eventually bury the old late payments.

• If you have no credit score, we can use alternative trade lines like rent, utility  bill and car insurance. 

DEBT TO INCOME RATIOS UNDER 41% FOR LOWER CREDIT SCORE, OR HIGHER THAN 41% FOR GOOD CREDIT SCORES

• DTI will be referenced commonly throughout the loan process. This determines how much house you can afford as it’s your monthly debts considered against the gross monthly income (GMI) we’re able to use for your mortgage.

• Ideally, your total DTI will be below 41% of your gross monthly income. This means someone who makes $5,000 monthly would want all of their collective credit related debts + new mortgage to be below $2,050 for the month. For example, According to CNBC, the average car loan is $523 a month. If you add in another $27 for a credit card, that would be $550 in credit debts + housing. So, your mortgage payment would want to be under $1,500. You can potentially be approved for more, but this would be the ideal number to aim for.

• Residual Income requirements of $1000 or more a month for most veteran borrowers in Kentucky 

• Your veteran status.

• You must have at least 90 days of active duty service.

• For Reserves, at least six years of service.

• For veterans, you must have a discharge other than dishonorable.

HOW YOU APPLY FOR A VA HOME LOAN IN KENTUCKY

COE and DD Form 214 for A Kentucky VA Mortgage Loan

The first step is to get  your  (COE and DD Form 214 for A Kentucky VA Mortgage Loan) in order as well as reviewing your information to make sure you qualify. If you don’t, we can get you on the right track.

 Determiner your eligibility and the maximum purchase price is the first step you’ll need to take for your ​Kentucky ​VA Loan. VA Loans don’t technically have a maximum mortgage/loan limit, but they do have a maximum amount they’ll 100% finance. On the other hand, FHA does have a maximum mortgage. This is an actual limit on the amount you can borrow.

Using a VA Loan allows you to finance up to 103.3% of the purchase price, with 100% going towards the purchase and the remaining 3.3% eligible to go towards your closing costs. Determining your eligibility will involve reviewing your veteran status, Certificate of Eligibility (COE), county limits, income, credit, and job stability. These factors will all contribute to your VA maximum mortgage.

The first thing you’ll need to do is to make sure you’re an eligible veteran and confirm your Certificate of Eligibility is ready for your VA Loan. If you’ve already got that sorted out, then you’re ready to start shopping for how much you’ll qualify for

Text/call:      502-905-370

https://www.mylouisvillekentuckymortgage.com