Introduction: How to Buy Your First Home in Kentucky
Are you a first-time homebuyer in Kentucky looking to purchase your dream home? Buying a house is one of the biggest financial decisions you'll ever make. Understanding the steps involved can help you feel confident throughout the process.
- In this guide, we'll cover:
- How much house you can afford
- Loan programs for first-time homebuyers in Kentucky
- Credit score requirements
- Down payment & closing costs
- Mortgage pre-approval process
- Required documents & how to apply
By the end of this article, you'll have a clear roadway to homeownership in Kentucky!
Step 1: Determine How Much House You Can Afford
One of the first steps to buying a home is understanding your budget. Mortgage lenders suggest you should consider a price range. It is recommended not to buy a home that exceeds 30% to 45% of your gross monthly income. For instance, if you earn $3000 gross a month, your maximum house payment should be about $1350 a month. This includes PITI.
Use a mortgage calculator to estimate your monthly payment, including property taxes, homeowners insurance, and mortgage insurance.
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Kentucky Mortgage Calculator
Kentucky Mortgage Calculator
Step 2: Check Your Credit Score
Your credit score plays a crucial role in determining your mortgage eligibility and interest rate. The mortgage scores used by lenders are different than the ones usually seen for borrowers. Be aware of this.
Here’s how you can improve your score before applying
Step 2: Check Your Credit Score
Your credit score plays a crucial role in determining your mortgage eligibility and interest rate. Here’s how you can improve your score before applying:
✔️ Pay down credit card balances
✔️ Make all payments on time
✔️ Avoid applying for new credit cards or loans
✔️ Don’t make big purchases before getting approved
✔️ If possible, avoid changing jobs before closing on your home
Pull your own credit report from www.annualcreditreport.com to see what is on your credit report from Experian, Equifax, and Transunion. You will not be able to get your mortgage fico scores but you can see what creditors are reporting before you apply to correct any errors
The credit scores used by mortgage lenders are different than what the consumers see, so be aware of that.
We can pull your fico mortgage scores for free, no costs to you, as far as the application process. If you want to obtain your own mortgage fico scores
While the FICO® 8 model is the most widely used scoring model for general lending decisions, banks use the following FICO scores when you apply for a mortgage:
- FICO® Score 2 (Experian)
- FICO® Score 5 (Equifax)
- FICO® Score 4 (TransUnion)
Credit Score Requirements for Kentucky First-Time Homebuyers
Step 3: Save for a Down Payment & Closing Costs
How Much Do You Need for a Down Payment?
💰 FHA Loan: 3.5% of the purchase price
💰 Conventional Loan: 3-20% (Varies)
💰 VA & USDA Loans and KHC Down payment Assistance Loans : No down payment required
Other Expenses to Consider
- Earnest Money Deposit: Shows sellers you’re serious. This is known as a good faith deposit. Typically, it's $500 at the minimum. However, more serious buyers show a bigger commitment by putting down $1000 or more.
- Closing Costs: Typically 2-5% of the loan amount
- Home Inspection Costs: $300-$500
- Appraisal Costs: $550 to $700 range
Step 4: Get Pre-Approved for a Mortgage in Kentucky
🔹 What is Mortgage Pre-Approval?
Being pre-approved means a lender has reviewed your financial information and determined how much you can borrow. This makes you a stronger buyer in the eyes of sellers.
✅ To Get Pre-Approved, You’ll Need the following documents plus more:
- W2’s from the past 2 years for 2023 and 2024
- Last months of pay stubs
- Bank statements (Last 2 months)
- 2 years of tax returns and all schedules
- Divorce decree (if applicable)
- Additional income documents for other income possible
- Looking for stability in the income. Waited over the last two years and the next 3 years.
- Two forms of ID> Driver's License and card
Step 5: Choose the Right Mortgage Loan in Kentucky
Types of Mortgage Loans Available
| Loan Type | Who Qualifies? | Down Payment | Upfront Mortgage Insurance | Monthly Mortgage Insurance | Min. Credit Score |
|---|---|---|---|---|---|
| VA Loan | Veterans & eligible service members | None | None | None | 580 |
| USDA Loan | Rural homebuyers | None | 2% of loan amount (can roll in) | Required | 640 |
| FHA Loan | Buyers meeting income/credit limits | 3.5% | 1.75% of loan amount | Required | 580-640 |
| 203K Loan | Buyers renovating a home | 3.5% | 1.75% of loan amount | Required | 580-640 |
| Conventional 97 | First-time homebuyers | 3% | None | Required | 620 |
| Select Smart Plus | Buyers meeting lender’s requirements | 3-20% | None | Required | 620 |
Step 6: Submit Your Mortgage Application
- Once you’ve chosen the right loan and been pre-approved, you’ll submit a formal mortgage application with your lender.
- The Lender Will Verify:
✅ Your credit score and credit bureau-Three scores are pulled from Experian, Equifax and Experian
✅ Income & employment history for last two years
✅ Bank statements for last two months & tax returns for last two years
✅ Property appraisal - Title search
Step 7: Close on Your New Home! 🎉
Your loan is approved. All final paperwork is completed. You’ll attend the closing meeting to sign documents and get the keys to your new home!
🏡 Congratulations! You’re now a Kentucky homeowner!
Ready to Buy a Home in Kentucky? Get Expert Help Today!
Buying your first home is a big step, but you don’t have to do it alone. Work with a trusted mortgage broker like Joel Lobb to get expert guidance, personalized loan options, and fast approvals.
📩 Contact Joel Lobb Today for a Free Consultation!
📞 Call or Text: (502) 905-3708
📧 Email: kentuckyloan@gmail.com
🔹 Get Pre-Approved Now & Start House Hunting!
Final Thoughts
If you're a first-time homebuyer in Kentucky, understanding the steps involved is crucial. Being aware of the loan programs available will help you make a smart financial decision.
1 - Email - kentuckyloan@gmail.com 2. Call/Text - 502-905-3708
Joel Lobb
Mortgage Loan Officer - Expert on Kentucky Mortgage Loans
Website: www.mylouisvillekentuckymortgage.com
Address: 911 Barret Ave., Louisville, KY 40204
Evo Mortgage
Company NMLS# 1738461
Personal NMLS# 57916
For assistance with Kentucky mortgage loans, reach out via email, call, or text Joel Lobb directly.
Kentucky Local Home Loan Lender Services
First-Time Home Buyers Welcome FHA, Rural Housing (USDA), VA, and Kentucky Housing Corporation (KHC) Loans Conventional Loan Options Available Fast Local Decision-Making Experienced Guidance Through the Home Buying Process
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