Showing posts with label Louisville Ky FHA Loans. Show all posts
Showing posts with label Louisville Ky FHA Loans. Show all posts

Kentucky FHA Mortgage Guidelines


Kentucky FHA Mortgage Guidelines


The credit score requirements for Kentucky FHA home loans:



FHA says on paper in their written guidelines that they will insure a FHA loan down to 500 - 579 with a 10% down payment or 580+ with a 3.5% down payment. However, in the real world of lending in the secondary market, most lenders will not adhere to these guidelines.
Most FHA investors will want a 620 middle credit score, but they're a few that will go by the written FHA guidelines above for credit scores, but very few. Your best bet is to get with a loan officer and get your scores up to at least 580 so you can have a better shot of getting approved and access to more FHA lenders.


Bankruptcy Requirements for Kentucky FHA Home Loans:



FHA states in their published guidelines that if you had a Chapter 7 Bankruptcy, you must wait 2 years from the discharge date to reapply for a FHA insured mortgage loan.


If you had a Chapter 13 Bankruptcy and have a 12 month on-time payment history with the courts, you can potentially get approved for a FHA loan if you get permission from the trustee and qualify with the Chapter 13 payment plan in your debt-to-income ratio. If you have been in the plan for over 12 months, and have a good pay history, you can submit your paperwork for FHA approval.


For example, let's say you have been in the Chapter 13 repayment plan for 3 years and you want to buy a home using FHA financing. You could go ahead and petition the Chapter 13 trustee for approval from the courts to get a home loan. The trustee of the Chapter 13 courts will want to know your new loan payment with the home loan, so make sure you know how much you want to borrow before you apply,.


Collections on Credit Report Requirements for Kentucky FHA Home Loans:


:
If the credit report shows a cumulative balance of $2,000 or more for collection accounts:
The debt(s) must be paid in full prior to or at closing, or
Payment arrangements must be made with the creditor and the monthly payment included in the DTI, or
A monthly payment of 5% of the outstanding balances of each collection must be included in the borrower’s DTI.
Collection accounts of non-borrowing spouses in a community property state must be included in the $2,000 cumulative balance and analyzed as part of the Borrower’s ability to pay all collection accounts. Community property states are Arizona, California, Texas, Washington, and Wisconsin



Short-sale or Foreclosure Guidelines for a Kentucky FHA Loan:



If you have experienced a short-sale or foreclosure, FHA states that you must wait 3 years from the date of the sale to obtain FHA financing again. And important note is this: The waiting period starts not when you were discharged from the home or bankruptcy, the waiting period starts when the home is sold and the deed transferred at the courthouse. This is important to remember because a lot of people think it starts when they vacate the home or when there bankruptcy is discharged if the mortgage was in the bankruptcy, but it does not!!! The date used to end the waiting period starts when the deed is transferred at the courthouse from the owner to back to bank or whomever buyus the home in the default.


Delinquent Federal Debt (Taxes, Student Loans) Kentucky FHA Loan Requirements:



If you have a delinquency with the Federal Government, this could hurt your chances of getting approved for a FHA backed Mortgage Loan. Here is why:


All FHA participants are ran through the CAVIRS Alert System administered by HUD to check to see if the mortgage applicant is delinquent to the Federal Government. This usually arises from an IRS income tax lien, overpayment on a social security claim, or lastly, a defaulted student loan.
A lot of the times FHA borrower don't realize that if they don't pay there Federal backed student loans, they go into default and this will hold you up from getting a FHA loan or possibly they will hold your tax refund.
If you have been delinquent on your student loans, you have to call and get on a 9 month repayment plan with them and they will clear you of your CAVIRS Alert. The payment plan can be as little as 5 or $10 a month, but the important thing is to get started so this will improve your credit rating too along with releasing the liens against you for other federal assistance like tax refunds, social security payments and benefits to name just a few.


I have done many FHA loans in Kentucky where they have rehabbed their student loans if they are backed by Federal government and got them loan after 9 months.
If you happen to have an agreement already worked-out with the IRS or student loan creditors, sometimes we can take that arrangement and get you approved sometime with FHA depending on the lender.


Child Support Obligations Kentucky FHA Loan Requirements:



If the credit report shows a delinquent child support agreement, the FHA Government Underwriter will want to see the current child support agreement and what the monthly payment is so as to make sure they have your debt-to-income ratio figured correctly. You can have a delinquency report of child support on your credit report and still get an FHA loan.


It is okay to be paying child support, a lot of times it shows on a borrower's paystubs, and if so, we simply use that child support obligation to use for debt-to-income ratio qualifying.






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
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Kentucky FHA Home buyers with heavy debt might find it tougher to get a mortgage with FHA in 2019

Homebuyers with heavy debt might find it tougher to get a mortgage:
Kentucky FHA Home buyers with heavy debt might find it tougher to get a mortgage with FHA in 2019





Here’s what’s happening: For several years, FHA has insured loans to buyers who previously would have been considered too risky or marginal at best. Those applicants often carried crushing monthly personal debts — for credit cards, auto loans, student loans and other obligations — totaling more than half of their monthly incomes. Many also had histories of credit problems that lowered their credit scores. Combined with skimpy down payments of 3.5 percent and minimal bank reserves, these borrowers have a high statistical probability of defaulting on their loans.
To prevent big losses to FHA’s insurance fund, the agency recently informed lenders nationwide that from March 18 onward, it would be applying more stringent standards to applications from high-risk home-buyers. In its letter, FHA documented its reasons for the crackdown. According to FHA Commissioner Brian Montgomery, the agency has been seeing disturbing trends in the quality of loans lenders have been delivering to it:
— Nearly one of every four approved home purchasers had a debt-to-income (DTI) ratio exceeding 50 percent, the worst since 2000. In January, 28 percent of buyers were in that category.
— FICO credit scores are tanking. They’ve fallen to the lowest level since 2008 — an industry-low average of 670. In the first quarter of fiscal 2019, more than 28 percent of all new purchase loans had FICOs below 640. In the same quarter, more than 13 percent of new loans had scores under 620 — 19 percent higher than the same period in the previous fiscal year. (FICO scores range from 300 to 850; low scores predict higher risks of nonpayment. Average scores for purchasers at giant mortgage investors Fannie Mae and Freddie Mac average around 750.)
— Borrowers are siphoning equity from their homes at an alarming rate. In fiscal 2018, FHA saw a 60 percent increase in “cash-out” refinancing as a percentage of all refinancings. Cash-outs allow borrowers to convert equity into spendable money.
— Growing numbers of loans have multiple indications of serious future risk of nonpayment — combinations of low credit scores of 640 or less and DTI ratios that exceed 50 percent.
Given these omens, FHA clamped down by amending its automated underwriting system. Lenders must now conduct time-consuming “manual” analysis of every new loan application flagged as high risk. Compared with standard automated underwriting, manual processing is far more intensive and entails higher staffing costs and liabilities for lenders. Many balk at it. Some investors refuse to buy manually underwritten loans. As a result, fewer of them make it through the process.

“Absolutely they’re going to turn a lot of loans down,” said Skeens. Joe Metzler, a loan officer at Mortgages Unlimited in St. Paul, Minnesota, welcomes the stricter standards. “FHA has become the dumping ground for crappy [loan] files with ridiculous DTI allowances and bad scores,” he said. “A lot of it lately has been straight-up subprime. We should not be doing them.”
According to FHA, nearly 83 percent of its home-purchase loans in January went to first-time buyers. Just under 40 percent went to minorities. Those who have the weakest financial profiles — FICO scores under 640 with debt ratios above 50 percent — could be shocked when they go to buy a house this spring. They may have to turn to subprime lenders who charge much higher interest rates, or they may have to simply postpone their purchase until they’re in better financial shape.

 
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.

-- 

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916

American Mortgage Solutions, Inc.

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



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Condo Buyers Guide: What you need to know when buying a condo


Condo Buyers Guide: What you need to know when buying a condo

Click on this link below for information about financing condos


 ↓↓↓↓↓↓↓

http://www.homepath.com/content/pdf/vendorresources/Marketing_Center_Condo.pdf



Louisville Kentucky FHA Condo Guidelines 
A detached condo for a FHA Mortgage Loan  is called a site condo and DOES NOT require FHA condo project approval!!
Site Condos are a SINGLE Family TOTALLY DETACHED Dwelling. No shared garages or any other forms of attached buildings. There cannot be ANY kind of attachments connecting any part of any building including decorative arches or other types of architectural elements.
Use appraisal form 1073 for site condos.




Joel Lobb
Senior  Loan Officer
(NMLS#57916)


 phone: (502) 905-3708
 Fax:     (502) 327-9119



Kentucky FHA Condo Mortgage Loan Apply Below
















 Click this link here for a FHA Condo Loan Approval in Kentucky !
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Condo Requirements for a Kentucky FHA Mortgage Loan Approval in 2016


How Do Changes to the FHA Condo Loan Rules Help You?
FHA has recently provided new guidance on its rules for certifying condo buildings. Watch this video to learn why the FHA made these changes.
Posted by Home Ownership Matters on Wednesday, February 3, 2016
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KENTUCKY FHA STREAMLINE REFINANCE TRANSACTIONS.

Fill out my form!


 KENTUCKY FHA STREAMLINE REFINANCE TRANSACTIONS.
502-905-3708 for your free FHA Mortgage Prequalification

fha streamline refinance louisville kentucky

502-905-3708 for your free FHA Mortgage Prequalification




In order to be in compliance with HUD Mortgagee Letter 2009-32, the following changes
to Kentucky  FHA Streamline Refinances will be effective for new case numbers assigned 
**** Revised Streamline Refinance Transactions WITHOUT an Appraisal ****
The maximum insurable mortgage cannot exceed:
• The outstanding principal balance* (from payoff) minus the applicable
refund of the UFMIP,
PLUS
• The new UFMIP that will be charged on the refinance.
**Closing cost cannot be included in the new maximum loan amount.
****Revised Streamline Transaction WITH an Appraisal****
The maximum insurable mortgage is the lower of:
1) Outstanding principal balance* minus the applicable refund of UFMIP, plus
closing costs, prepaid items to establish the escrow account and the new
UFMIP that will be charge on the refinance;
OR
2.) 97.75 percent of the appraised value of the property plus the new UFMIP that
will be charged on the refinance.
Discount points may not be included in the new mortgage. If the borrower
has agreed to pay discount points, the lender must verify the borrower has the
assets to pay them along with any other financing costs that are not included in
the new mortgage amount.
* Outstanding principle balance for the above calculations is defined as the principle balance of the loan
and may include interest charged by the servicing lender when the payoff is not received on the first day of
the month but may not include delinquent interest, late charges or escrow shortages.
The following changes apply for Kentucky FHA Streamline loans with or without appraisal:
A.) Seasoning – At the time of loan application, the borrower must have made at least 6
payments on the FHA-insured mortgage being refinanced.
B.) Payment History – Current mortgage must be 0x30 in the last 12 months or for the life of the loan if loan is < 12 months old and > 6 months old. ) If borrower has less than 12 month history on current loan and has a previous consecutive mortgage, that mortgage must be 0x30 up to the 12 months required.
C.) Net Tangible Benefit – The lender must determine that there is a net tangible benefit
as a result of the streamline refinance transaction, with or without an appraisal. The
transaction must meet FHA  net tangible
benefit.
For FHA Net tangible benefit is defined as:
1.) A reduction in the total mortgage payment (principal, interest, taxes and
insurances, HOA fees, ground rents special assessments and all
subordinate liens): The new total mortgage payment is 5% lower than the
total mortgage payment for the mortgage being refinanced. Example: Total
mortgage payment on the existing FHA mortgage is $895; the total mortgage
payment for the new FHA mortgage must be $850 or less.
2.) Refinancing from an adjustable rate mortgage (ARM) to a fixed rate
mortgage: The interest rate on the new fixed mortgage will be no greater
than 2 percentage points above the current rate of the one-year arm. For
hybrid ARMs, the total mortgage payment on the new fixed rate mortgage may
not increase by more than 20%. Example: total mortgage payment on the
hybrid ARM is $895; the total mortgage payment for the new fixed rate
mortgage must be $1,074 or less.
3.) Reducing the term of the mortgage: For transactions that include a
reduction in the mortgage term, that loan must be underwritten and closed as
a rate and term (no cash-out) refinance transaction.
D.) Employment – Streamline refinances must now include evidence of employment and
include a verbal (must be on 1003).
E.) Assets – If there are any closing cost to be paid at close, verification of funds to close
must be included in the file submission.
F.) The file must also include the pay-off statement.
G.) Maximum Combined Loan to Value –
Kentucky Mortgage guidelines will remain at
125% CLTV.)
• For streamline refinance transactions WITHOUT an appraisal, the CLTV is
based on the original appraised value of the property.
• For streamline refinance transactions WITH an appraisal, the CLTV is based on
the new appraised value. H.)TOTAL Scorecard – Lenders should not use TOTAL on streamline refinance
transactions. If a lender uses TOTAL, that loan must be underwritten and closed
as a rate and term (no cash-out) refinance transaction
If you have any questions regarding this announcement,
Joel Lobb (NMLS#57916)Senior  Loan Officer
502-905-3708 cell
Apply for Free for your Louisville Kentucky Mortgage-Takes only 3 Minutes


download
Definition of Credit history highlighted in green with text marker.

Getting a FHA loan in Kentucky in 2017 you will be confronted with minimum credit score requirements set forth by FHA and the lender. Even though FHA will insure the mortgage loan at a certain credit score, you will see that lenders will create  “credit-overlays” to protect their risk and ask for a higher credit score.
So keep in mind when you are getting a FHA loan in 2017, some lenders will have higher credit score minimums in addition to the FHA Mortgage Insurance program.
For a Kentucky Home buyer wanting to purchase a home or refinance their existing FHA loan, FHA requires a 3.5% down payment and the borrower must have a 580 FICO Credit Score. If the score is below 580, then you would need 10% down and still qualify on a manual underwrite.
You must have a FICO score of at least 500 to be eligible for an Kentucky  FHA loan. If your FICO score is from 500 to 579, your down payment on the loan is 10 percent of the loan.
If your FICO score is 580 or higher, your down payment is only 3.5 percent. If your credit score is less than 580, it may be more cost effective to take the necessary steps to improve your score before taking out the loan, rather than putting the money into a larger down payment.
How do they get the credit score:  There are three main credit bureaus in the US. Equifax, Experian, and Transunion. The three scores vary but should be relativley  close as long as the same creditors are reporting to the same bureaus.
You will get a variation in the scores due to all creditors or collection companies don’t report to all three bureaus. This is why they take the mid score.  So if you have a 590 experian, 680 equifax, and 620 transunion, your qualifying credit score would be 620
Based on my experience with lenders that I deal with in Kentucky on FHA loans,  most lenders require 620 middle credit score for consideration for loan approval.
How do they get the score:  They take the mid score, so if you have a 590 experian, 680 equifax, and 620 transunion, your qualifying score would be 620.

home-loan-with-low-credit-scores-150x128

Kentucky FHA Loans with less than 620 Score

If your score is below 620, a manual underwrite is where the AUS (Automated Underwriting System) refers your loan to an human being, and they look at the entire file to see if they can overturn and approve the mortgage loan because the Desktop Underwriting Automated Software could not approve you.
With scores below 620, they typically will want to verify your rent history, have no bankruptcies in last two years, and no foreclosures in the last 3 years.
If you have had any lates since the bankruptcy this will probably result in a denial on a refer manual underwrite file.
Your max house payment will be set at 31% of your gross monthly income,  and your new house payment plus the bills you are paying on the credit report cannot be more than 43%.
Typically, on scores below 620 for FHA loans, they will also look at reserves or money you have saved-up after the loan is made to try and qualify you. For example, if you have a 401k or savings account that have at least 4 months reserves (take your mortgage payment  x 4) and this would equal your reserves. They look at this as a rainy day fund and could help you keep up on your bills if you were unemployed or could not work.
Maximum FHA loan limits in Kentucky are set around $285,000 and below.
If you are looking to take a FHA loan in 2017 to buy or refinance a home in Kentucky, please contact me below with your questions about the credit score requirements and how they affect your loan approval.


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