I specialize in Kentucky First Time Homebuyers FHA, VA, USDA & Rural Housing, KHC and Fannie Mae mortgage loans. I have helped over 1300 Kentucky families buy their first home or refinance their current mortgage for a lower payment; Kentucky First time buyers we still how available down payment assistance with KHC. Free Mortgage applications/ same day approvals. Web site is not endorsed by the FHA, VA, USDA govt agency. Text/call 502-905-3708 kentuckyloan@gmail.com NMLS 57916 NMLS 1738461
Louisville Kentucky FHA's 9-step process for home buyers
For Louisville Kentucky first-time home buyers, there is a huge amount of information and guidance available. Sorting it out, and making sure that it is objective can be challenging. FHA provides the best guidance in this area centered around 9 steps any soon-to-be homeowner should take.
Step 1. Figure out how much you can afford.
To help you calculate how much you can afford to buy a home, FHA recommends you use models operated by Ginnie Mae, like FHA a part of HUD that supports mortgage financing. To get an answer to just how much you can afford, click on http://www.ginniemae.gov/2_prequal/intro_questions.asp?Section=YPTH
You need to make sure you receive the information you are entitled to along your road to homeownership.
You have the Right to..
Shop for the best loan for you and compare the charges of different mortgage brokers and lenders.
Ask for a Good Faith Estimate of all loan and settlement charges from your lender before you agree to the loan and pay any fees.
Know what fees are not refundable if you decide to cancel the loan agreement.
Ask your mortgage broker to explain exactly what the mortgage broker will do for you.
Know how much the mortgage broker is getting paid by you and the lender for your loan.
Ask questions about charges and loan terms that you do not understand.
Receive a credit decision that is not based on your race, color, religion, national origin, sex, marital status, age, or whether any income is from public assistance.
Know the reason if your loan was turned down.
Ask for the HUD settlement cost booklet "Shopping for Your Home Loan" from your lender.
Step 4. Shop for a loan.
To find a lender and loan terms that best meet your needs, you should learn some of the terminology used, what can help you, and what can cost you. To help guide you in shopping for the right loan, check out this HUD booklet by clicking http://www.hud.gov/buying/booklet.pdf
Would you comparison shop in only one store? To find mortgage lenders doing business in your area that are approved by FHA, go to http://www.hud.gov/ll/code/llslcrit.cfm
Step 5. Check out Home-buying Programs
Your lender usually knows about any local programs offered to first time homebuyers, but it is always good to check for yourself. One avenue to do so is to see what programs have been identified by local HUD offices. Click here to see what might be available in your state:http://www.hud.gov/buying/localbuying.cfm
Step 6. Finding a qualified real estate agent to help you buy your home
Nearly 75% of today's home are found and purchased through the Internet. This does not eliminate the need for you to select a qualified real estate agent to represent you. A qualified real estate agent provides the best security for any buyer in ensuring a great home purchase. You should expect your agent to:
Develop a preliminary evaluation of a property (including both pros and cons) and provide an explanation of comparative property values in the area.
Properly advise you on price and other advantageous negotiating options and prepare a purchase offer.
Make a timely and complete offer on the home you are interested in buying.
Notify you immediately regarding offer acceptance, offer rejection, or counter offers.
Arrange inspections, warranties, and any certifications that might affect the value of the property.
Accompany you on a final walk-through of the property before closing.
Attend the closing and provide assistance to you and your attorney at the closing.
Remember, your real estate agent can guide you, but only you know the home that is right for you.
To locate a real estate agent in your area, click here to find agents you may wish to represent you: Find An Agent
Step 7. Get a Home Inspection
What you see may be what you get, but what about what you don't see? It pays to engage the trained eyes of a home inspector to make sure you fully understand the condition of the property you are buying. To learn more about home inspections, check out the information at this site:http://www.pueblo.gsa.gov/cic_text/housing/inspection/home.htm
Step 8: Obtaining homeowners insurance
Homeowners insurance is more than just a good idea. Your lender will require that you carry sufficient coverage to at least pay off your mortgage amount if your home were severely damaged. To get some background on what to look for in a homeowners insurance policy, clickhttp://consumeraction.gov/caw_insurance_homeowner_renter.shtml
Step 9. Closing
One of the most exciting moments of your life is actually closing on the purchase of your new home. To understand the process and remove stress from the event, try reading some background information provided at this website: http://www.hud.gov/offices/hsg/ramh/res/sfhrestc.cfm
Congratulations, you made it through the 9 steps! The materials referenced along the way are not the only sources of information for you. Check out other "Tools" available to you on the HomeTelosFIRST Homepage.
With an Louisville Kentucky FHA loan, you can finance up to 97.75% of the home value to reduce your current rate or current mortgage term – which is a higher percentage than a conventional loan. Louisville Kentucky FHA loans are often more flexible than other programs – extending funds to people who have had credit challenges and offering competitive rates for people who want to take cash out.
Why Purchase with an Louisville KentuckyFHA Loan?
There are many benefits to purchasing with anLouisville Kentucky FHA loan. You can take advantage of a low-fixed rate and put very little, or in some cases, no money down. With an FHA purchase, less than perfect credit is not a problem. In fact, lower credit scores or no credit scores can be approved. You might have a past bankruptcy and still qualify for an FHA loan! Additionally, a down payment can be a gift. With lower PMI than conventional loans, now might be a good time to take advantage of the benefits of purchasing with anLouisville Kentucky FHA loan.
The Federal Housing Administration has allowed FHA streamline refinances on federally insured mortgages since the early 80’s. Given that, many Louisville KentuckyFHA homeowners have utilized this program to lower their interest rate with relatively low or no costs. The Louisville KentuckyFHA Streamline Refinance Program has made it easy for borrowers to save thousands of dollars on their mortgage interest. The term “streamline” simply means there is very little documentation and underwriting that needs to be performed by the lender. No appraisal & no income verification required.
Yes. You can assume an existing FHA-insured loan or, if you are the one deciding to sell, allow a buyer to assume yours. Assuming a loan can be very beneficial, since the process is streamlined and less expensive compared to that for a new loan. Also, assuming a loan can often result in a lower interest rate. The application process consists of a credit check - no property appraisal is required. The borrower must also demonstrate that he or she has enough income to support the mortgage loan. In this way, qualifying to assume is similar to the qualification requirements for a new mortgage loan. We are dedicated to making yourLouisville Kentucky FHA loan as effortless and hassle free as possible. We look forward to helping you save thousands on your Louisville KentuckyFHA home mortgage.
Click below red arrow to apply for your free FHA Mortgage Today
Updated Guidelines for Kentucky FHA Mortgage Loans in 2018
Here is my Top 5 List for getting a Kentucky FHA Mortgage Loan:
1.A Low Down Payment – Kentucky FHA Mortgage Loans only require a 3.5% down payment. And what makes that even more attractive is that it can be a gift from a relative. Do you have a parent or sibling who would “Gift” you some money for a down payment? If so, it could be time to apply for an KEntucky FHA Mortgage Loan.
2.Flexible Credit Qualifying – HUD did NOT set a credit score requirement for qualifying for an KY FHA Mortgage Loan. However many lenders in the market today have drafted “Overlays” that set minimum credit score requirements. Most lenders like to see a minimum 620 credit score, but don’t get discouraged if you are not there yet. If you are close to 620, it is often just as simple as reviewing your credit to determine how to quickly raise it. If you are not close to 620, ask your FHA Mortgage Loan Originator if they have a program for you. Chances are, there is! Bankruptcies and prior foreclosures do not automatically disqualify you either.
3.The Seller Can Pay Your Closing Costs – That’s right. You need to have a quality Realtor who will help you negotiate not only the best price for the home, but also that the seller will pay your closing costs. HUD allows Kentucky FHA Mortgage Loans to have the seller pay up to 6% of the purchase price. Sounds good so far, a down payment gift and seller paying closing costs!
4.Flexible Income Qualifying – The standard for income qualifying ratios is 31/43 which means that up to 31% of your monthly income can be used to pay your monthly household mortgage payment; and up to 43% of your monthly income can be used to qualify for ALL monthly expenses. Those ratios can go up to 55% if you have good credit and a good income history allowing you to qualify when others might not.
5.Qualify Without Your Spouse’s BAD Credit – This is a tricky one but it is also not well known. You can effectively qualify for an Kentucky FHA Mortgage Loan without your spouse’s Bad Credit. FHA will look at your spouse’s credit but cannot decline your loan due to your spouse’s debt or credit score. So if you have a spouse with a crummy credit profile, you should take a look at Kentucky FHA Mortgage Loans to see if it will work for you.
What are Kentucky FHA Loans?
FHA stands for Federal Housing Authority. FHA Loans provide low-cost insured Home Mortgage Loans that suit a variety of purchasing options. Whether you’re buying a home or want to refinance your mortgage, FHA loans might be right for you. If you’re unsure about your credit rating, or have concerns about a down payment, FHA loans can give you piece of mind with super low closing costs and flexible payment options.
What factors determine if I am eligible for an FHA Loan in Kentucky?
To be eligible for FHA Mortgage Loans, your monthly housing costs (mortgage principal and interest, property taxes, and insurance) must meet a specified percentage of your gross monthly income. Your credit background will be fairly considered. You must be able to make a down payment, cover closing costs and have enough income to pay your monthly debt.
What is the maximum amount that I can borrow?
The maximum amount for an FHA Mortgage is determined by:
Maximum Loan Amount in Kentucky: The Maximum FHA Loan amount allowed for FHA Home Mortgages varies from county to county in Kentucky. The highest maximum FHA Home Loan right now in Kentucky is $271,050. The lowest maximum amount available in any county is $271,050. The lowest maximum amount available in any county is $285,000. To see what the limit is in the county in which you’re interested, please refer to the Kentucky FHA Loan Limit chart at the bottom of this page.
Maximum financing: In Kentucky, the maximum FHA financing will be 97.75% of the appraised value of the home or its selling price, whichever is lower.
How much money will I need for the down payment and closing costs?
Kentucky FHA loans require the home buyer to invest at least 3.5% of the sales price in cash for the down payment and closing costs. If the sales price is $100,000 for example, the home buyer must invest at least $3,500. However, the home buyer can use gifts from family, funds from local, state or government agencies, or other sources for the down payment.
What property types are allowed for FHA Loans in Kentucky?
While FHA Guidelines do require that the property be Owner Occupied (OO), they do allow you to purchase condos, planned unit developments, manufactured homes, and 1-4 family residences, in which the borrower intends to occupy one part of the multi-unit residence.
There are three main types of FHA Refinance loans available in KY.
FHA Rate/Term Refinance
The FHA Rate/Term Refinance is for borrowers who currently have a conventional fixed rate or ARM mortgage and wish to refinance into an FHA Mortgage. This program helps borrowers who wish to have a stable, fixed rate FHA Insured Loan.
Cash-Out Refinance
An FHA Cash Out Refinance is perfect for the homeowner who wants to access the equity that they have built up in their home. This program is beneficial to homeowners whose property has increased in value since it was purchased.
Streamline Refinance
The FHA Streamline Refinance is designed to lower the interest rate on a current FHA House Loan or convert a current FHA adjustable rate mortgage into a fixed rate. An FHA Streamline Refinance can be performed quickly and easily. It requires much less hassle and paperwork than a normal refinance including no appraisal, no qualifying debt ratios and no income verification.
Kentucky FHA Mortgage Loans—updated Guidelines
Kentucky home buyers with sketchy credit who are unable to qualify for conventional mortgages may now find it more costly and difficult to obtain loans insured by the Federal Housing Administration.
New rules that went into effect this month adjust the two types of mortgage insurance paid by consumers for loans insured by the F.H.A., which is part of the Department of Housing and Urban Development.
One change raises the annual insurance premium, paid monthly by the borrower, setting it at 0.85 percent to 0.9 percent of the loan balance, depending on the down payment or equity owned; the amount used to be 0.5 percent to 0.55 percent. The other change lowers the one-time upfront insurance premium that borrowers must pay, to 1 percent of the loan balance from 2.25 percent.
The upfront premium is paid in a lump sum at closing or added to the loan balance, unlike the monthly premium, which is paid over the life of the loan in addition to the interest and principal.
The decrease in the upfront premium, welcome though it might seem to some customers, does little to offset the effects of the monthly increase, called “really pretty hefty.”
Kentucky F.H.A. loans are usually taken out by buyers who cannot qualify under the stiffer down-payment requirements of Fannie Mae or Freddie Mac, the government-controlled buyers of loans. F.H.A. requires 3.5 percent, while Fannie Mae typically requires 5 to 15 percent or more, depending on the type of loan.
The changes, under an example provided by the F.H.A., mean that a borrower who puts 3.5 percent down on a $154,000 house with a 30-year fixed-rate mortgage at 5 percent (such a consumer typically earns a gross annual income of $54,000, according to the agency) and who finances the upfront premium into the loan will see monthly mortgage payments, including taxes, interest and the two insurance premiums, rise to $1,238 from $1,205. The example is based on median data, including property taxes put at about 2.5 percent of home value. That increase includes the drop in the upfront mortgage insurance, to $1,486 from $3,344 — but also includes the rise in the monthly insurance premium, to $111 from $68.
Last August, President Obama signed into law a bill authorizing the F.H.A. to increase premiums to shore up its insurance funds; the agency had been authorized to raise the annual premium to as much as 1.55 percent.
Conventional loans, which conform to Fannie and Freddie underwriting guidelines, do not require upfront mortgage insurance. But some may require monthly private mortgage insurance, if the borrower puts less than 20 percent down toward the purchase, or has less than 20 percent equity in a refinancing.
Kentucky F.H.A. borrowers, meanwhile, can stop paying the monthly mortgage insurance only after five years and when their loan-to-value ratio reaches 78 percent, at which point they have 22 percent equity in their home.
Kentucky F.H.A. loans are typically offered by niche direct lenders, and because of the insurance, they often carry interest rates equal to or slightly below those of conventional loans.
In October, the F.H.A. set a minimum FICO score of 500 for borrowers who want an Kentucky F.H.A.-insured loan — the first time a minimum was set. It also introduced a new minimum down payment of 10 percent for borrowers with FICO scores below 580. (Those above 580 still pay a minimum 3.5 percent.)
Tuesday, July 20, 2010
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Getting an HUD Insured Home Loan with Low Down Payment
FHA loans are attractive for first-time home buyers with a less than perfect credit history and who find it difficult to come up with the 10 to 20% down payment.
FHA loans are once again gaining popularity due to a variety of reasons. Their market share dropped significantly during the period from 2000 to 2007 due to the surge in popularity of sub-prime loans and loans that allowed zero down payment. However the recent sub-prime crisis and the flurry of foreclosures led to most of the lenders tightening the mortgage requirements. FHA loans are once again becoming a viable option for low-to-middle income families for acquiring home loans. The recent bridge loan for the $8000 tax credit which is limited to FHA loans may well be another boost for the popularity of FHA loans.
How FHA Loans Work
The FHA loans are available to purchase or refinance a principal residence. Federal Housing Administration(FHA), which is a part of HUD do not fund a loan, instead they insure the loan. The mortgage loan is funded by a lending institution, such as a mortgage company, bank or savings and loan association.
Borrowers are required to pay a small upfront mortgage insurance premium(1.5% of the purchase price) and a small monthly mortgage insurance (MMI) premium.
Advantages of FHA Loans
1. Low Down Payment- The minimum down payment requirement for FHA loans is 3.5%. Combined with a HUD down payment assistance grant or other similar programs, the borrower can often purchase a home with zero down payment.
2. Less than perfect credit history- FHA loans are ideal for borrowers with less than perfect credit history who will find it difficult to qualify for a conventional loan. Since the loan is guaranteed by the government, lenders will
3. Ideal for first-time home buyers- The typical first-time home buyer is someone who is young and in the early stages of their career. They will have other student debts and will find it difficult to come up with the 5 to 20% down payment required for a conventional loan. They are also likely to have a blemished credit history. FHA loans are much more suited to this type of home buyers because they allow for higher debt-to-income ratios, less than perfect credit history and lower down payment.
4. Down payment can be gifted by a family member or non-profit organization- One significant advantage of FHA loans is that the down payment can be gifted by a parent, a government agency or a non-profit organization which will allow people with out money for down payment to buy a home.
5. Foreclosures and bankruptcy- While borrowers whose homes have been foreclosed or who have gone into bankruptcy will have to wait for a longer period to get a conventional loan, FHA will allow a home purchase two years after a Bankruptcy and three years after a foreclosure.
6. No prepayment penalties- FHA loans do not have any prepayment penalties and can be easily refinanced.
7. Higher debt-to-income ratios- The maximum allowable debt-to-income ratio for a FHA loan is 41%, which is higher than most conventional loans.
Limitations of FHA Loans
Relatively low limits- One important disadvantage of FHA loans is that loan limits for FHA loans is typically less than the loan limits for most conventional loans. If the loan amount exceeds the loan limits, the borrowers will have to contribute additional money or they will have to look for other types of loans.
Borrowers with good credit history can find better rates- FHA loans are typically for borrowers with a blemished credit history or who find it difficult to come up with the 10 to 20% down payment. Borrowers with a good credit history who can also come up with the 10 to 20% down payment can find better rates with conventional loans.
FHA loans are a great option for first-time home buyers who are looking to buy a home in this buyer’s market. Lenders are willing to give better rates even with tighter credit norms since they are assured that the loan will be paid off by HUD in the event of a foreclosure. FHA Limits
Joel Lobb (NMLS#57916) Senior Loan Officer 502-905-3708 cell
