How to Get Approved for a Kentucky Mortgage Loan with Bad Credit.

Buying a home in Kentucky with bad credit can be done with the right mortgage loan officer to guide you through the process.

 There are various loan programs, including Kentucky FHA, VA, USDA, and conventional mortgages, have different criteria and offer opportunities for individuals with less-than-perfect credit to become homeowners. 

In this blog post, we'll explore the options available for Kentucky homebuyers with bad credit and provide tips on improving your credit scores to enhance your chances of loan approval to buy your first house in Kentucky

Understanding Your Credit Score or Fico Score 

Your credit score is a critical factor in determining your eligibility for a mortgage loan. It reflects your creditworthiness and helps lenders assess the risk of lending you money.

Credit scores range from 300 to 850, with higher scores indicating better credit health. Scores below 620 are generally considered "bad" credit, but don't be discouraged. There are still options available.

Loan Options for Kentucky Homebuyers with Bad Credit

Kentucky FHA Loans

Federal Housing Administration (FHA) loans are popular among Kentucky first-time homebuyers and those with bad credit. They offer more lenient credit requirements and lower down payment options.

• Credit Score Requirement: As low as 500 with a 10% down payment, or 580 with a 3.5% down payment.
• Benefits: Flexible credit requirements, low down payment, and competitive interest rates.
• Drawbacks: Mortgage insurance premiums (MIP) are required, which increase the overall cost of the loan. A lot of sellers view FHA buyers as weaker buyers vs Conventional loans and may hold that against you if you are making an offer with a FHA loan. 
• Bankruptcy: 2 years removed from Chapter 7 and 1 year in Chapter 13 pan with on time pay history and trustee approval is possible for FHA loans

Kentucky VA Loans

Veterans Affairs (VA) loans are available to veterans, active-duty service members, and eligible surviving spouses. These loans offer significant benefits, including no down payment and no private mortgage insurance (PMI).

• Credit Score Requirement: No official minimum, but most lenders prefer a score of at least 580 to 620.
• Benefits: No down payment, no PMI, competitive interest rates.
• Drawbacks: VA funding fee, which can be financed into the loan or waived for some eligible veterans. 
• Bankruptcy: 2 years removed from Chapter 7 and 1 year in Chapter 13 pan with on time pay history and trustee approval is possible for FHA loans

Kentucky USDA Loans

The United States Department of Agriculture (USDA) loans are designed for rural and suburban homebuyers with low to moderate incomes. These loans offer zero down payment options and low-interest rates.

• Credit Score Requirement: Generally, 640, but exceptions can be made for lower scores with compensating factors down to a 580 credit score. 
• Benefits: No down payment, low mortgage insurance, competitive interest rates.
• Drawbacks: Geographic and income restrictions apply and harder to qualify for vs FHA loans and VA loans when it comes to government backedmortgae loans. Much more restrictive on debt to income ratio and income limits for household see here 

Kentucky Conventional Mortgage Loans

Conventional loans are not backed by the government and typically require higher credit scores. However, there are programs available for those with lower scores.

• Credit Score Requirement: Generally, at least 620. Typically 720 or higher preferred--
• Benefits: Potentially lower overall costs compared to government-backed loans if you have a higher credit score and substantial down payment. No maximum purchase price or loan amount-Mortgage insurance not for life of loan and can recast your mortgage loan and remove mi unlike government backed loans via FHA, VA USDA ---Can be done anywhere and no income limits
• Drawbacks: Stricter credit requirements, higher down payments, and PMI required for down payments less than 20%. 

Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

Text/call:      502-905-3708

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/

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Qualifying for A VA Home Loan in KY

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Qualifying for A VA Home Loan in KY: Kentucky VA Mortgage Question and Answers for Qualifying for A VA Home Loan in KY? Does the Kentucky VA Home Loan benefit expire?    NO Can ...

1. Income

You need income. You need to be able to afford the home.  But what is acceptable income? Let’s just say that there are two ratios mortgage underwriters look at to qualify you for mortgage payment:

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.

What qualifies as income? Basically, it’s income that has at least a proven, two year history of being received and pretty high assurances that the income is likely to continue for at least three years. What’s not acceptable? Unverifiable cash income, short term income and income that’s not likely to continue like unemployment income, student loan aid,  VA education benefits, or short term disability are not allowed for a  mortgage loan.

2. Assets

What the mortgage underwriter is looking for here is how much can you put down and secondly, how much will you have in reserves after the loan is made to help offset any financial emergencies in the future.

Do you have enough assets to put the money forth to qualify for the down payment that the particular program asks for. The only 100% financing or no money down loans still available in Kentucky for  home buyers are available through USDA, VA, and KHC or Kentucky Housing Loans. Most other home buyers that don’t qualify for the no money down home loans mentioned above, will turn to the FHA program. FHA loans currently requires a 3.5% down payment.

Kentucky Home buyers that have access to putting down at least 5% or more, will usually  turn to Fannie Mae or Freddie Mac mortgage programs  so they can get better pricing when it comes to mortgage insurance.

These assets need to be validated through bank accounts, 401k or retirements account and sometimes gifts from relatives or employer.. Can you borrower the down payment? Sometimes. Generally if you’re borrowing a secured loan against a secured asset you can use that. But rarely can cash be used as an asset. FHA will allow for gifts from relatives  for down payments with little as 3.5% down but Fannie Mae will require a 20% down payment when a gift is being used for the down payment on the home.

3. Credit Scores

• Kentucky FHA Mortgage loan credit score requirements:
•  
• The minimum credit score is 500 for Kentucky FHA loans. However please keep in mind these two things: 1. Lenders credit their own overlays to increase the credit score threshold, most being 620, and secondly, if your credit score is below 580, you would need 10% minimum down payment,  and if the credit score is over 580, then you can go with the minimum 3.5% down payment.
• Obviously if you have a higher credit score, this will increase your chances of getting approved for a Kentucky FHA Mortgage and possibly better rates and closing costs options.

 

• Kentucky VA Mortgage  loans requirements : 
•  
• VA does not have a minimum credit score requirement, but if the credit score is below 620 few lenders will do the loan, but I am set up with several Kentucky VA lenders where I have closed them down to a 560 credit score, but the borrower had good compensating factors such as: large down payment, low dti ratios, good job history and good residual income with no previous bankruptcies or foreclosures.
• I would suggest if your credit scores are below 580, I would suggest on working on getting the scores up before you applied for a VA mortgage loan.
• A lot of lenders will do a rapid rescore which in some cases can increase your credit scores in as little  as 7-10 working days.
• The federal Department of Veterans Affairs (VA) guarantees loans for current and former members of the military and their families. VA loans provide very favorable terms to eligible borrowers and have limited qualifying requirements. You can get a VA loan with no down payment so long as the home isn’t worth more than you pay for it, and there’s no minimum credit score to qualify. You also don’t have to pay for mortgage insurance, although you do have to pay an up-front funding fee of of between .5% and 3.3% of the loan amount unless you fall within an exception for disabled vets or military widows or widowers.
•  
• Kentucky USDA Mortgage credit score requirements: 
•  
• According to their guidelines, USDA does not have a minimum credit score, but most lenders will want a 640 credit score. USDA uses an online system to underwrite the risk of the loan, and scores under 640 are very difficult to get approved.
•  
• Validating the Credit Score.  Two or more eligible tradelines are necessary to validate an applicant’s credit report score.  Eligible tradelines consist of credit accounts (revolving, installment etc.) with at least 12 months of repayment history reported on the credit report.  At least one applicant whose income or assets are used for qualification must have a valid credit report score
• The Rural Housing Service (RHS) operates under the federal Department of Agriculture to guarantee loans for rural home-buyers with limited income who can’t obtain conventional financing. The upside is that Kentucky USDA loans require no down payment. The downside is that they charge a steep up-front fee of 1% of the loan amount (which can be paid off over the entire loan term) and an annual fee of 0.35%.

4. Appraisal

Generally, there’s nothing you can do to affect this. Bottom line here is…..”is the value of the house at least the value of what you’re paying for it?” If not, then not good things start to happen. Generally you’ll find less issues with values on purchase transactions, because, in theory, the realtor has done an accurate job of valuing the house prior to taking the listing. The big issue comes in refinancing. In purchase transactions, the value is determined as the

Lower of the value or the contract price!!!

That means that if you buy a $1,000,000 home for $100,000, the value is established at $100,000. Conversely, if you buy a $200,000 home and the value comes in at $180,000 during the appraisal, then the value is established at $180,000. Big issues….Talk to your loan officer.

 

5 POPULAR PROGRAMS THAT KENTUCKY HOME BUYERS USE TO PURCHASE THEIR FIRST HOME.

 

Conventional Loan

 

• At least 3%-5% down

 

• Closing costs will vary on which rate you choose and the lender. Typically the higher the rate, the lesser closing costs due to the lender giving you a lender credit back at closing for over par pricing. Also, called a no-closing costs option. You have to weigh the pros and cons to see if it makes sense to forgo the lower rate and lower monthly payment for the higher rate and less closing costs.

 

Fico scores needed start at 620, but most conventional lenders will want a higher score to qualify for the 3-5% minimum down payment requirements Most buyers using this loan have high credit scores (over 720) and at least 5% down.

 

The rates are a little higher compared to FHA, VA, or USDA loan but the mortgage insurance is not for life of loan and can be rolled off when you reach 80% equity position in home.

 

Conventional loans require 4-7 years removed from Bankruptcy and foreclosure.

 

Max Conventional loan limits are set at $647,200 for 2022 in Kentucky

 

 

Kentucky USDA Rural Housing Program

 

 

If you meet income eligibility requirements and are looking to settle in a rural area, you might qualify for the Kentucky USDA Rural Housing program. The program guarantees qualifying loans, reducing lenders’ risk and encouraging them to offer buyers 100% loans. That means Kentucky home buyers don’t have to put any money down, and even the “upfront fee” (a closing cost for this type of loan) can be rolled into the financing.

 

Fico scores usually wanted for this program center around 620 range, with most lenders wanting a 640 score so they can obtain an automated approval through GUS. GUS stands for the Guaranteed Underwriting system, and it will dictate your max loan pre-approval based on your income, credit scores, debt to income ratio and assets.

 

They also allow for a manual underwrite, which states that the max house payment ratios are set at 29% and 41% respectively of your income.

 

They loan requires no down payment, and the current mortgage insurance is 1% upfront, called a funding fee, and .35% annually for the monthly mi payment. Since they recently reduced their mi requirements, USDA is one of the best options out there for home buyers looking to buy in an rural area.

 

A rural area typically will be any area outside the major cities of Louisville, Lexington, Paducah, Bowling Green, Richmond, Frankfort, and parts of Northern  Kentucky .

 

There is a map link  see the qualifying areas.

 

New Income limits for most counties (*) in Kentucky are $91,900 for a  4 unit household and household families of five or more + can make up to  $121,300.

The Northern Kentucky Counties (***) of Boon, Kenton, Campbell, Bracken, Gallatin, and Pendleton are $99,250 for a household of four or less and up to $130,000 for a family of five or more.

Remember,  Jefferson County Kentucky, Fayette County Kentucky are not eligible for USDA loans.

 

USDA requires 3 years removed from bankruptcy and foreclosure.

 

There is no max USDA loan limit.

 

 

Kentucky FHA Loan

 

 

FHA loans are good for home buyers with lower credit scores and no much down, or with down payment assistance grants. FHA will allow for grants, gifts, for their 3.5% minimum investment and will go down to a 500 credit score.

 

The current mortgage insurance requirements are kind of steep when compared to USDA, VA , but the rates are usually good so it can counteracts the high mi premiums. As I tell borrowers, you will not have the loan for 30 years, so don’t worry too much about the mi premiums.

 

The mi premiums are for life of loan like USDA.

 

FHA requires 2 years removed from bankruptcy and 3 years removed from foreclosure.

 

Maximum FHA loan limits in Kentucky are set at $420,680 for 2022…If you are looking at a larger loan amount, then you would need to look at doing a conventional loan which has a max loan amount of $647,200.00

 

Kentucky VA Loan

 

 

VA loans are for veterans and active duty military personnel. The loan requires no down payment and no monthly mi premiums, and no minimum credit score , saving you on the monthly payment. It does have an funding fee like USDA, but it is higher starting at 2% for first time use, and 3% for second time use. The funding fee is financed into the loan, so it is not something you have to pay upfront out of pocket.

 

VA loans can be made anywhere, unlike the USDA restrictions, and there is no income household limit and there is no max loan in Kentucky for 2022, but it does now carry higher mortgage insurance premiums in the form of New

 

 VA Funding Fees. See Chart by clicking this link

 

VA Funding Fee

Generally, all Veterans using the VA Home Loan Guaranty benefit must pay a funding fee. This reduces the loan’s cost to taxpayers considering that a VA loan requires no down payment and has no monthly mortgage insurance. The funding fee is a percentage of the loan amount which varies based on the type of loan and your military category, if you are a first-time or subsequent loan user, and whether you make a down payment. You have the option to finance the VA funding fee or pay it in cash, but the funding fee must be paid at closing time.

You do not have to pay the fee if you are a:

• Veteran receiving VA compensation for a service-connected disability, OR
• Veteran who would be entitled to receive compensation for a service-connected disability if you did not receive retirement or active duty pay, OR
• Surviving spouse of a Veteran who died in service or from a service-connected disability

The funding fee for second time users who do not make a down payment is slightly higher. Also, National Guard and Reserve Veterans pay a slightly higher funding fee percentage. As of January 1, 2020, the Blue Water Navy Veterans Act will impact the funding fee percentages depending on your category of service and loan type, please review the following to determine the path most beneficial to you moving forward:

FUNDING FEE TABLES
The VA funding fee is calculated as a percentage of the total loan amount. It must be paid or rolled into the loan at closing time. VA strongly recommends that you verify with your lender that the funding fee matches your military service.
In Public Law 116-23, Congress has established rates for loans closed on or after January 1, 2020, and before January 1, 2022 at the levels listed below:
Purchase and Construction Loan
Note: Reduced fees only apply to purchase loans with a down payment of at least 5 percent.

* If the Veteran’s only prior use of entitlement was for a manufactured home loan, the higher subsequent use fee does not apply.
** Active Duty includes Reserves and National Guard ordered to active service that meets the eligibility requirements for their era of service (https://www.benefits.va.gov/homeloans/purchaseco_eligibility.asp). Active service does NOT include active duty for training.

Note: A list of Tribes participating in the NADL Program is at https://www.benefits.va.gov/homeloans/nadl_mou.asp
The following do NOT pay the VA funding fee:
• Veteran receiving VA compensation for a service-connected disability;
• Veteran entitled to receive VA compensation for a service-connected disability, but receives retirement pay or active service pay;
• Surviving spouse of a Veteran who died in active service or from a service-connected disability;
• Servicemember on Active Duty who provides, on or before date of loan closing, evidence of having been awarded the Purple Heart.

 

Most VA lenders I work with will want a 580 to 620 credit score even though VA says on paper they don’t have minimum credit scores.

 

VA requires 2 years removed from bankruptcy or foreclosure.

 

 

Kentucky Down Payment Assistance

Kentucky Down payment assistance loans are available up to $7,500 for Mortgage

 

 

 

 

ATTENTION: KHC has announced changes to the Down Payment Assistance Programs! This is great news for buyers in Kentucky!

 

1. KHC is increasing the down payment assistance program amount from $6,000 to $7,500. This is for both Regular Down Payment and for Affordable Down Payment assistance programs

 

2. The interest rate on the repayment of the down payment assistance will go from 5.5% to 3.75%. (Affordable Down Payment assistance will remain at 1%)

Realtors: We are here to help you and your clients take advantage of these great opportunities.

 

Buyers: We are here to answer questions you have regarding this program and qualification requirements.

KHC is used for mostly applicants in Kentucky that don’t have access to money for a down payment on their home. 

​​​​KHC recognizes that down payments, closing costs, and prep​aids are stumbling blocks for many potential home buyers. Here are several loan programs to help. 

Regular DAP

• Purchase price up to $346,644 with Secondary Market.
• Assistance in the form of a loan up to $7,500 in $100 increments.
• Repayable over a 10-year term at 3.75 percent.
• Available to all KHC first-mortgage loan recipients.

Affordable DAP

• Purchase price up to $346,644​ with Secondary Market.
• Assistance up to $7,500.
• Repayable over a 10-year term at 1.00 percent.
• Borrowers must meet Affordable D​AP 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.​

• SECONDARY MARKET FUNDING SOURCE

  • First-time and repeat homebuyers statewide
  • 30-year fixed interest rate
  • Principal residence ONLY
  • Purchase Price Limit:  $346,644
  • Borrower must meet KHC’s Secondary Market Income Limits

  Conventional Preferred Program

  • Minimum credit score of 660
  • 3 percent down payment
  • Monthly mortgage insurance (charter coverage)
  • All KHC DAPs applicable
  • No minimum borrower contribution
  • No reserves required
  • 80 percent AMI income         

  Conventional Preferred Plus 80

  • Minimum credit score of 660
  • 3 percent down payment
  • Monthly mortgage insurance (standard coverage)
  • All KHC DAPs applicable
  • No minimum borrower contribution
  • No reserves required
  • Secondary Market Income limits apply

  FHA

  • Insured by the Federal Housing Administration
  • 3.5 percent down payment
  • All KHC DAPs applicable
  • Upfront and monthly mortgage insurance
  • Minimum credit score of 620

  Refinance Options (Available only through Secondary Market)         

  • Credit qualifying Streamline Refinance and Rate/Term Refinance
    • Insured by the Federal Housing Administration
    • Cash back to borrower not to exceed $500
    • Upfront and monthly mortgage insurance
    • Minimum credit score of 620         

  VA

  • Guaranteed by the Veterans Administration for qualified military veterans
  • No down payment if the property appraises for the sales price or greater
  • All KHC DAPs applicable
  • Minimum credit score of 620
  • No monthly mortgage insurance payments

  ​ Refinance Options (Available only through Secondary Market)         

  • VA IRRRL
    • ​620 minimum credit score
    • No appraisal required
    • 30-year term
    • VA existing loan

  RH​​S

  • Guaranteed by Rural Housing Services (RHS)
  • Home must be located in a rural area as defined by RHS
  • No down payment if the property appraises for the sales price or greater
  • All KHC DAPs applicable
  • Upfront and monthly mortgage insurance
  • Minimum credit score of 620

  Refinance Options (Available only through Secondary Market)         

  • RHS Streamlined-Assist Refinance Program
    • 620 minimum credit score
    • No appraisal required
    • Must have made timely mortgage payments for the last 12 months
    • 30-year term
    • RHS existing 502 guaranteed loan​

   

 

​

Kentucky First Time Home Buyer Common Questions and Answers:

 

∘ WHAT KIND OF CREDIT SCORE DO I NEED TO QUALIFY FOR DIFFERENT FIRST TIME HOME BUYER LOANS IN KENTUCKY?

 

Answer. Most lenders will wants a middle credit score of 640 for KY First Time Home Buyers looking to go no money down. The two most used no money down home loans in Kentucky being USDA Rural Housing and KHC with their down payment assistance will want a 640 middle score on their programs.

 

If you have access to 3.5% down payment, you can go FHA and secure a 30 year fixed rate mortgage with some lenders with a 580 credit score. Even though FHA on paper says they will go down to 500 credit score with at least 10% down payment, you will find it hard to get the loan approved because lenders will create overlays to protect their interest and maintain a good standing with FHA and HUD.

 

Another popular no money down loan is VA. Most VA lenders will want a 620 middle credit score but like FHA, VA on paper says they will go down to a 500 score, but good luck finding a lender for that scenario.

 

A lot of times if your scores are in the high 500’s or low 600’s range, we can do a rapid rescore and get your scores improved within 30 days.

 

∘ DOES IT COSTS ANYTHING TO GET PRE-APPROVED FOR A MORTGAGE LOAN?

 

Answer: Most lenders will not charge you a fee to get pre-approved, but some lenders may want you to pay for the credit report fee upfront. Typically costs for a tri-merge credit report for a single borrower runs about $50 or less. Maybe higher if more borrowers are included on the loan application.

∘ HOW LONG DOES IT TAKE TO GET APPROVED FOR A MORTGAGE LOAN IN KENTUCKY?

 

Answer: Typically if you have all your income and asset documents together and submit to the lender, they typically can get you a pre-approval through the Automated Underwriting Systems within 24 hours.

 

They will review credit, income and assets and run it through the different AUS (Automated Underwriting Systems) for the template for your loan pre-approval. Fannie Mae uses DU, or Desktop Underwriting, FHA and VA also use DU, and USDA uses a automated system called GUS. GUS stands for the Guaranteed Underwriting System.

 

If you get an Automated Approval, loan officers will use this for your pre-approval. If you have a bad credit history, high debt to income ratios,  or lack of down payment,  the AUS will sometimes refer the loan to a manual underwrite, which could result in a longer turn time for your loan pre-approval answer

 

∘ ARE THERE ANY SPECIAL PROGRAMS IN KENTUCKY THAT HELP WITH DOWN PAYMENT OR NO MONEY DOWN LOANS FOR KY FIRST TIME HOME BUYERS?

 

Answer: There are some programs available to KY First Time Home Buyers that offer zero down financing: KHC, USDA, VA, Fannie Mae Home Possible and HomePath, HUD $100 down and City Grants are all available to Kentucky First Time Home buyers if you qualify for them. Ask your loan officer about these programs

 

∘ WHEN CAN I LOCK IN MY INTEREST RATE TO PROTECT IT FROM GOING UP WHEN I BUY MY FIRST HOME?

 

Answer: You typically can lock in your mortgage rate and protect it from going up once you have a home picked-out and under contract. You can usually lock in your mortgage rate for free for 90 days, and if you need more time, you can extend the lock in rate for a fee to the lender in case the home buying process is taking a longer time. The longer the term you lock the rate in the future, the higher the costs because the lender is taking a risk on rates in the future.

Interest rates are kinda like gas prices, they change daily, and the general trend is that they have been going up since the Presidential election in November 2016.

∘ HOW MUCH MONEY DO I NEED TO PAY TO CLOSE THE LOAN?

 

Answer: Depending on which loan program you choose, the outlay to close the loan can vary. Typically you will need to budget for the following to buy a home: Good faith deposit, usually less than $500 which holds the home for you while you close the loan. You get this back at closing; Appraisal fee is required to be paid to lender before closing. Typical costs run around $400-$450 for an appraisal fee; home inspection fees.

 

Even though the lender’s programs don’t require a home inspection, a lot of buyers do get one done. The costs for a home inspection runs around $300-$400. Lastly, termite report. They are very cheap, usually $50 or less, and VA requires one on their loan programs. FHA, KHC, USDAS, Fannie Mae does not require a termite report, but most borrowers get one done.

 

There are also lender costs for title insurance, title exam, closing fee, and underwriting fees that will be incurred at closing too. You can negotiated the seller to pay for these fees in the contract, or sometimes the lender can pay for this with a lender credit. The lender has to issue a breakdown of the fees you will incur on your loan pre-approval.

HOW LONG IS MY PRE-APPROVAL GOOD FOR ON A KENTUCKY MORTGAGE LOAN?

 

Answer: Most lenders will honor your loan pre-approval for 60 days. After that, they will have to re-run your credit report and ask for updated pay stubs, bank statements, to make sure your credit quality and income and assets has not changed from the initial loan pre-approval.

 

HOW MUCH MONEY DO I HAVE TO MAKE TO QUALIFY FOR A MORTGAGE LOAN IN KENTUCKY?

 

Answer: The general rule for most FHA, VA, KHC, USDA and Fannie MAe loans is that we run your loan application through the Automated Underwriting systems, and it will tell us your max loan qualifying ratios.

There are two ratios that matter when you qualify for a mortgage loan. The front-end ratio, is the new house payment divided by your gross monthly income.  The back-end ratio, is the new house payment added to your current monthly bills on the credit report, to include child support obligations and 401k loans.

Car insurance, cell phone bills, utilities bills does not factor into your qualifying rations.

If the loan gets a refer on the initial desktop underwriting findings, then most programs will default to a front end ratio of 31% and a back-end ratio of 43% for most government agency loans that get a refer. You then take the lowest payment to qualify based on the front-end and back-end ratio.

So for example, let’s say you make $3000 a month and you have $400 in monthly bills you pay on the credit report. What would be your maximum qualifying house payment for a new loan?

Take the $3000 x .43%= $1290 maximum back-end ratio house payment. So take the $1290-$400= $890 max house payment you qualify for on the back-end ratio.

Then take the $3000 x .31%=$930 maximum qualifying house payment on front-end ratio.

So now your know! The max house payment you would qualify would be the $890, because it is the lowest payment of the two ratios.

 

Customer Testimonials

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 2018

 

 

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 April, 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 July 2018

 

 

 

betty parsons

 

Wow,  what a great loan officer. I was referred to him by our agent and he was great to work with. We used him for a USDA no money down loan in  Shelby County and we were really impressed. We  were afraid we could not buy a home since we did not have money saved for a down payment, but Joe l was able to get us a zero down loan and we even got our appraisal fee and good faith deposit back at closing. We actually got money back at closing!!! I Can’t think him enough. Our family moved from our apartment in the south end  of town to get our own home with 5 acres  for our kids and 2 dogs, at a payment that is equal to our rent payment also. .Thanks Again Joel. May god bless you

 

 

Patty Locker

 

We contacted Joel about buying a house on our move from Ohio for my husband’s job transfer with Ford. We put a lot of trust in him since we were new to the area and first time home buyers in the Louisville KY market, and he always delivered on what he said. It took us a while to find a home due to the lack of homes,  but once we got one, he was always quick to respond our questions via text or email ,and kept us informed through the process. We got to meet him at the closing and he was super nice and even got us a closing gift for our home which we didn’t expect at all. Super nice guy !!! I would definitely recommend him for a local Home loan in the Louisville area.

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pam dolby

 

I got a VA loan with Joel and he was great. He is an ex-army guy so he could relate to my past experiences of being a veteran and moving around the country a lot. I had some credit issues that required a little extra work but Joel was able to find A VA lender to approve my situation as far as having past bad credit problems and a lower credit score. We closed yesterday on our home here in Louisville and we could not be happier. We finally have a home of our own thanks to Joel . I would definitely recommend him for a mortgage loan. Great experience and closed 8 days before expected close date so we were able to move in early.

 

 

 

I contacted Joel about the $10,000 KY Housing Grant last month and we were able to get it and I just closed on my home. He was great to work with and if you are a first time home buyer here in Louisville, I would definitely contact him. I met him at his office and he was very nice and knowledgeable and kept me informed through the process. No surprises either so I was very happy. I am new homeowner thanks to Joel .

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 definetly 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 knowledgeable 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

 

 

 

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

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