The reasons you will get turn down for a mortgage loan in Kentucky.

 There are several reasons why people in Kentucky might get turned down for a mortgage loan. These reasons can be broadly categorized into issues with the borrower or the property:

Borrower-related reasons:

• Credit score: Low credit scores (generally below 620) are a major factor in loan denials. Having a history of late payments, delinquencies, or collections can negatively impact your score.
• Debt-to-income ratio (DTI): This ratio compares your monthly debt payments to your gross income. A high DTI (generally above 50%) indicates you have a lot of debt compared to your income, making it harder to afford a mortgage payment.
• Employment history: Lenders prefer borrowers with stable employment and income. Recent job changes, gaps in employment, or insufficient income documentation can raise concerns.
• Down payment: A smaller down payment increases the loan amount and loan-to-value ratio (LTV), making the loan riskier for lenders. In Kentucky, FHA loans require a minimum 3.5% down payment, while conventional loans typically require 20%.
• Insufficient assets: While not always a disqualifier, having limited savings or assets can weaken your application by reducing your financial cushion.

Property-related reasons:

• Appraisal value: If the appraised value of the property is lower than the purchase price, it creates a high LTV, making the loan riskier for lenders.
• Property condition: Major repairs or structural issues with the property could require significant investment before closing, which lenders may not be comfortable with.
• Location: Properties in floodplains or other high-risk areas may be ineligible for certain loan types or require additional insurance.

Here are some resources that can help:

• Reasons loan denied in Kentucky https://www.mylouisvillekentuckymortgage.com/2010/10/get-approved-for-mortgage-or-home-loan.html

Joel Lobb  Mortgage Loan Officer

American Mortgage Solutions, Inc.
10602 Timberwood Circle
Louisville, KY 40223
Company NMLS ID #1364

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

http://www.mylouisvillekentuckymortgage.com/

COMPENSATING FACTORS TO OVERTURN A MORTGAGE DENIAL ON A KENTUCKY FHA AND USDA MORTGAGE LOAN:

COMPENSATING FACTORS TO OVERTURN A MORTGAGE DENIAL

Documentation

- Accumulated Savings
• The borrower has demonstrated an ability to accumulate savings, and a conservative attitude toward using credit.
- Compensation or Income Not Reflected in Effective Income
•
- Down Payment
• The borrower makes a large down payment of 10 percent or higher toward the purchase of the property.
- Housing Expense Payments
•
- Minimal Housing Expense Increase
• There is only a minimal increase in the borrower's housing expense.
- Potential for Increased Earnings
• The borrower has a potential for increased earnings, as indicated by job training or education in his/her profession.
- Previous Credit History
• A borrower's previous credit history shows that he/she has the ability to devote a greater portion of income to housing expenses.
- Primary Wage-Earner Relocation
•
- Substantial Cash Reserves
•••
- Substantial Non-Taxable Income
• The borrower has substantial non-taxable income. This applies if no adjustment was previously made when computing ratios.

Joel Lobb (NMLS#57916)
Senior  Loan Officer

502-905-3708 call or text or email kentuckyloan@gmail.com with your questions?

http://mylouisvillekentuckymortgage.com

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