Louisville Kentucky First Time Home Buyer Programs

If you are a potential Louisville Kentucky First Time home buyer first time home buyer in Louisville Kentucky, we welcome you! It is our utmost desire to assist you in reaching the goal of buying your first home. 

We've gathered the most helpful, beneficial resources together on this page to make things as easy as possible for you.


We have access to all the Louisville Kentucky First Time home Buyers programs including, FHA, VA, KHC, and USDA, Rural Housing Zero Down home loans--

What is available for first time home buyer financial programs in Kentucky?

The first place to start in that search is the Kentucky Housing Corporation. They provide generous assistance to first time home buyers in the form of grants to help with the down payment as well as closing costs.

The Kentucky Housing Corporation has a down payment assistance program for eligible homebuyers who meet specific moderate-income limits to help with down payment and/or closing costs. Check and see what is available and if you qualify....


There are other Louisville, Kentucky first time homeownership programs available through the Kentucky Housing Corporation. 

Your household income and expenses

Lenders look at your income in ways other than the total amount; how you earn it is also important. For example, income from bonuses, commissions and overtime can vary from year to year. If these sources make up a large percentage of your income, your lender will want to know how reliable they are.

Your lender will also consider the relationship between your income and expenses. Generally, your fixed housing expenses (mortgage payment, insurance, and property taxes, but not repairs or maintenance) should not be more than 28 percent of your gross monthly income, although this is not an absolute rule. Your lender will also consider other long-term debts, such as car loans or college loans. It is a good idea to bring the following when you meet with your lender:

Income

Employment, salary and bonuses, and any other source of income for the past two years (bring your most recent pay stub, previous year’s W-2 forms, and tax returns if possible)
The most recent account statement showing the amount of any dividend and interest income you received during the past two years 

Official documentation to support the amount of any other regular income you may receive (alimony, child support, etc.) Job stability is a factor that a mortgage lender will look for, and two years at your current job helps, but this also is not an absolute requirement. If you change jobs but stay in the same line of work, you should not have a problem — especially if the job change is an advancement or increase in income.

Credit score

Your credit score also helps to predict how likely you are to repay the mortgage debt. Credit scores will determine if you qualify for the loan, what your rate is, and mortgage insurance payments each month. Typical fico scores wanted for an automated approval run around 580 for an FHA loan and VA loan, 620 for a USDA, 620 for a KHC Loan with Down Payment Assistance, and 620 for an AU approval for Fannie Mae Loan.

Personal assets

Current balances and recent statements for any bank accounts, including checking and savings
Most recent account statement showing current market value of any investments you may have, such as stocks, bonds or certificates of deposit
Documentation showing interest in retirement funds
Face amount and cash value of life insurance policies
Value of significant pieces of personal property, including automobiles
Debt Information
The balances and account numbers of your current loans and debts, including car loans, credit card balances and any other loans you may have 

Underwriting

The lender does the best possible job of ensuring that a borrower qualifies for a loan. The final decision, however, rests with the lender's underwriter, who measures the total risk that the specific investor, who backs up the loan, is taking. Each investor (or investment company) has its own underwriting guidelines (often using statistical models), so while the underwriters evaluate many of the same factors as the lenders, they may look more closely at some areas than others, depending on the guidelines.

 For example, while the lender may have pre-approved you before you chose a home, by the time you get to underwriting, you will have chosen the property you want to buy, and the underwriter will review the property details closely. 

However, most of the information used is the same as that used by the lender, but it may be evaluated differently. The underwriter will evaluate the borrower's ability to pay (income), willingness to pay (credit history), and the collateral (property). As underwriters analyze each of these risks (although this is not a complete list), here are some possible guidelines they may use:

Is the income stable from month to month and year to year? 

Has the borrower been on his/her current job and in the same industry for a sufficient amount of time? 

A minimum of two years is the standard guideline, but exceptions can be made.

Can the income be verified? 

2 years taxes, last 30 days of paystubs 

Does the borrower have late payments, collections, or a bankruptcy? 

If so, is there an explanation that can be provided for the late payments/collections/bankruptcy? 

FHA, VA requires 2 years removed from bankruptcy and USDA requires 3 years removed from bankruptcy. 

 
Fannie Mae requires 4-7 years after a bankruptcy. 

 
Does the borrower have excessive monthly debts to repay? Typical Debt to income ratios for a no money down loan are limited to 45% of your total gross monthly income for a USDA or KHC loan.
Is the borrower maxed out on credit cards? 

Pay down your credit card balances to less than 25% of your credit limits before you apply for a mortgage loan.

The down payment

A down payment is a percentage of your home's value. The type of mortgage you choose determines the down payment you will need. It can range from zero to 20 percent, or more if you wish.

A number of loans are available that do not require high down payments, particularly for first-time home buyers. 

FHA loans, for example, may require less than 5 percent down, and veterans or those on active duty in the military can obtain loans with no down payment at all. 

USDA loans are offered to rural home buyers with a no down payment option just like VA loans.

In addition to down payment assistance offered through Kentucky Housing where you don't have to put a down payment down with income caps for both KHC and USDA loans.

Joel Lobb  Mortgage Loan Officer NMLS 57916

EVO Mortgage
 911 Barret Ave, Louisville, KY 40204
Company NMLS ID # 173846

Text/call: 502-905-3708

email: kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

NMLS 57916  | Company NMLS #173846

This is not a commitment to lend or extend credit. Restrictions may apply. Information and/or data is subject to change without notice. All loans are subject to credit approval. THIS PRODUCT OR SERVICE HAS NOT BEEN APPROVED OR ENDORSED BY ANY GOVERNMENTAL AGENCY, AND THIS OFFER IS NOT BEING MADE BY AN AGENCY OF THE GOVERNMENT. This email was sent as part of my effort to maintain our relationship and keep you well informed of market conditions. It could be interpreted as a commercial message. If you would like to stop receiving these emails, you may click here to unsubscribe at any time:

4 Things Every Borrower Needs to Know to Get Approved for a Mortgage Loa...

Why Kentucky Mortgage Loans Are Denied

When applying for a Kentucky mortgage loan, several factors play a crucial role in the approval and denial process. 

Understanding why Kentucky mortgage loans may not get approved due to credit score, bankruptcy, income ratio, work history, and foreclosure is essential for prospective homebuyers. 

Credit Score of 620 or below:

A credit score reflects an individual's creditworthiness. Lenders use this score to assess the risk of lending money. A lower credit score, typically below 620, can raise concerns for lenders. It may indicate past financial challenges, missed payments, or high levels of debt. To improve mortgage approval chances, borrowers should aim for a higher credit score by paying bills on time, reducing debt, and fixing any errors on their credit report.

Bankruptcy less than 2 years or foreclosure less than 3 years:


Bankruptcy can significantly impact mortgage approval. Depending on the type of bankruptcy (Chapter 7 or Chapter 13) and how long ago it occurred, lenders may view it as a red flag. 

Bankruptcies stay on credit reports for 10 years, affecting credit scores and indicating financial instability. Lenders may require a waiting period after bankruptcy before considering a mortgage application.

 
Chapter 7

If you have filed a Chapter 7  Bankruptcy, the mortgage waiting periods begin after the discharge date:

Fannie Mae (conventional) loan – 4 years from discharge date
FHA loan – 2 years from discharge date
VA loan – 2 years from discharge date
USDA loan – 3 years from discharge date

Chapter 13 Bankruptcy

On the other hand, if you have filed a Chapter 13 Bankruptcy, the mortgage waiting periods are shorter:

Fannie Mae (conventional) loan – 2 years from discharge date, and also 4 years from the dismissal date.
FHA loan – 1 year from the payout period. However, you also need court permission, and proof of satisfactory bankruptcy payment and performance.
VA loan – 1 year from the payout period. Also, court permission, and proof of satisfactory bankruptcy payment and performance.
USDA loan – 1 year of the payout must elapse and payment performance must be satisfactory. In addition, you need court permission to borrow again.

After Short Sale/Deed-in-Lieu of Foreclosure

The mortgage waiting periods after a short sale begin after the completion date:Fannie Mae (conventional) loan – 4 years
FHA loan – 3 years
VA loan – 2 years
USDA loan – 3 years



Debt to Income Ratio over 50% 

Lenders assess income ratios to determine if borrowers can afford mortgage payments. The debt-to-income ratio (DTI) compares monthly debt payments to gross monthly income. A high DTI suggests financial strain and may lead to loan denial. Lenders typically prefer a DTI below 50% for conventional loans. Increasing income or reducing debt can help improve this ratio and enhance loan approval chances.


Work History less than 2 years with job gaps: 

2 year Stable employment and consistent income are vital for mortgage approval. Lenders evaluate work history to ensure borrowers have a reliable source of income to repay the loan. Job changes, gaps in employment, or irregular income can raise concerns. Ideally, borrowers should demonstrate a steady work history with consistent or increasing income over time.











Joel Lobb Mortgage Loan Officer

Text/call: 502-905-3708

email: kentuckyloan@gmail.com


http://www.mylouisvillekentuckymortgage.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).

Frequently Asked Questions for A Kentucky Mortgage Loan Approval

 

What documents do I need to prepare for my Kentucky Mortgage loan application?

Below is a list of documents that are required when you apply for a mortgage. Every situation is different so you may be required to provide less or more documentation. 

Sometimes a document you provide will promote us to ask for something additional.  This is a normal part of the process and does anything mean that anything is wrong. 

Your Property    

  

·         Copy of signed sales contract including all riders and addendums.

·         Verification of the deposit when you made your offer. 

·         Names, addresses and telephone numbers of  your realtor, builder, insurance agent and attorney (if involved).

Your Income

·         Copies of your pay-stubs for the most recent 30-day period and year-to-date.

·         Copies of your W-2 forms for the past two years. 

·         Names and addresses of all employers for the last two years. 

·         Letter explaining any gaps in employment in the past 2 years. 

·         Green card or visa (copy of front & back)

If you are self-employed or receive commission or bonus, interest/dividends, or rental income:

·        Full tax returns for the last two years including attached schedules and statements. If you have filed an extension, please supply a copy of the extension

·        Year-to-date Profit and Loss statement.

·         K-1's for all partnerships and S-Corporations for the last two years.

·         Completed and signed Federal Partnership (1065) and/or Corporate Income Tax Returns (1120) including all schedules, statements and addenda for the last two years. (Required only if your ownership position is 25% or greater.)

 

If you will use Alimony or Child Support to qualify:

·        Divorce decree or court order stating amount, as well as, proof of receipt of funds for last year.

 

If you receive Social Security income, Disability or VA benefits:

·         Award letter from that organization.

Source of Funds and Down Payment

·         Sale of your existing home - Settlement/Closing Statement. (You won't have this until you close on your current home)

·         Savings, checking or money market funds - bank statements for the last 2 months.

·         Stocks and bonds -

most recent statement. 

·         Gifts - If part of your cash to close, provide Gift Letter (ask us and we will provide one for you) 

Debt or Obligations

·         Prepare a list of all names, addresses, account numbers, balances, and monthly payments for all current debts with copies of the last three monthly statements

·         Include all names, addresses, account numbers, balances, and monthly payments for mortgage holders and/or landlords for the last two years

·         If you are paying alimony or child support, include marital settlement/court order stating the terms of the obligation

When should I refinance?

It's generally a good time to refinance when mortgage rates are 2% lower than the current rate on your loan. It may be a viable option even if the interest rate difference is only 1% or less. Any reduction can trim your monthly mortgage payments. Example: Your payment, excluding taxes and insurance, would be about $770 on a $100,000 loan at 8.5%; if the rate were lowered to 7.5%, your payment would then be $700, now you're saving $70 per month. Your savings depends on your income, budget, loan amount, and interest rate changes. Your trusted lender can help you calculate your options.

What are points?

A point is a percentage of the loan amount, or 1-point = 1% of the loan, so one point on a $100,000 loan is $1,000. Points are costs that need to be paid to a lender to get mortgage financing under specified terms. Discount points are fees used to lower the interest rate on a mortgage loan by paying some of this interest up-front. Lenders may refer to costs in terms of basic points in hundredths of a percent, 100 basis points = 1 point, or 1% of the loan amount.

Should I pay points to lower my interest rate?

Yes, if you plan to stay in the property for a least a few years. Paying discount points to lower the loan's interest rate is a good way to lower your required monthly loan payment, and possibly increase the loan amount that you can afford to borrow. However, if you plan to stay in the property for only a year or two, your monthly savings may not be enough to recoup the cost of the discount points that you paid up-front.

What is an APR?

The annual percentage rate (APR) is anot the interest rate you pay. The APR reflects the costs of obtaining a mortgage as a yearly rate. It is usually higher than the note rate, or advertised rate, because it takes into the costs. Because APR calculations are affected by the various different fees charged by lenders, a loan with a lower APR is thought to be a better deal, but that's not always true.  

 

The best way to know what is the best deal fo ryou ist to obtain a cost analysis from your lender so you can compare different options side-by-side.

Ask us for your analysis.
 

What does it mean to lock the interest rate?

Mortgage rates can change from one day to the next. If interest rates rise sharply during the application process it can increase the borrower’s mortgage payment unexpectedly. Once you "lock-in" your loan’s interest rate, that guarantees that rate for a specified time period, often 30-60 days, and then that is your rate for the entire term of your loan (assuming you have a fixed rate)

 

How is my credit judged by lenders?

Credit scoring is a system creditors use to help determine whether to give you credit. Information about you and your credit experiences, such as your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, and the age of your accounts, is collected from your credit application and your credit report. Using a statistical program, creditors compare this information to the credit performance of consumers with similar profiles. A credit scoring system awards points for each factor that helps predict who is most likely to repay a debt. A total number of points -- a credit score -- helps predict how creditworthy you are, that is, how likely it is that you will repay a loan and make the payments when due.

The most widely use credit scores are FICO scores, which were developed by Fair Isaac Company, Inc. Your score will fall between 350 (high risk) and 850 (low risk).

Because your credit report is an important part of many credit scoring systems, it is very important to make sure it's accurate before you submit a credit application.

 To get copies of your report, contact the three major credit reporting agencies:

Equifax: (800) 685-1111
Experian (formerly TRW): (888) EXPERIAN (397-3742)
Trans Union: (800) 916-8800
These agencies may charge you up to $9.00 for your credit report.

You are entitled to receive one free credit report every 12 months from each of the nationwide consumer credit reporting companies – Equifax, Experian and TransUnion. This free credit report may not contain your credit score and can be requested through the following website: https://www.annualcreditreport.com

What can I do to improve my credit score?

Credit scoring models are complex and often vary among creditors and for different types of credit. If one factor changes, your score may change -- but improvement generally depends on how that factor relates to other factors considered by the model. Only the creditor can explain what might improve your score under the particular model used to evaluate your credit application.

Nevertheless, scoring models generally evaluate the following types of information in your credit report:

·         Have you paid your bills on time? Payment history typically is a significant factor. It is likely that your score will be affected negatively if you have paid bills late, had an account referred to collections, or declared bankruptcy, if that history is reflected on your credit report.

·         What is your outstanding debt? Many scoring models evaluate the amount of debt you have compared to your credit limits. If the amount you owe is close to your credit limit, that is likely to have a negative effect on your score.

·         How long is your credit history? Generally, models consider the length of your credit track record. An insufficient credit history may have an effect on your score, but that can be offset by other factors, such as timely payments and low balances.

·         Have you applied for new credit recently? Many scoring models consider whether you have applied for credit recently by looking at "inquiries" on your credit report when you apply for credit. If you have applied for too many new accounts recently, that may negatively affect your score. However, not all inquiries are counted. Inquiries by creditors who are monitoring your account or looking at credit reports to make "prescreened" credit offers are not counted.

·         How many and what types of credit accounts do you have? Although it is generally good to have established credit accounts, too many credit card accounts may have a negative effect on your score. In addition, many models consider the type of credit accounts you have. For example, under some scoring models, loans from finance companies may negatively affect your credit score.

Scoring models may be based on more than just information in your credit report. For example, the model may consider information from your credit application as well: your job or occupation, length of employment, or whether you own a home.

To improve your credit score under most models, concentrate on paying your bills on time, paying down outstanding balances, and not taking on new debt. It's likely to take some time to improve your score significantly.

 

What is an appraisal?

An Appraisal is an estimate of a property's fair market value. It's a document generally required (depending on the loan program) by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property. The Appraisal is performed by an "Appraiser" typically a state-licensed professional who is trained to render expert opinions concerning property values, its location, amenities, and physical conditions.

 

What is PMI (Private Mortgage Insurance)?

On a conventional mortgage, when your down payment is less than 20% of the purchase price of the home mortgage lenders usually require you get Private Mortgage Insurance (PMI) to protect them in case you default on your mortgage. Sometimes you may need to pay up to 1-year's worth of PMI premiums at closing which can cost several hundred dollars. The best way to avoid this extra expense is to make a 20% down payment, or ask about other loan program options.

 

What happens at closing ?

The property is officially transferred from the seller to you at "Funding".  Often you will go to a title company or attorneys office for your "closing".  However, this is just to sign all the final documents. Ownership of the property is officially transferred either later that day of often the next business day, which is when you will normally obtain the keys to the home.  If you can't attend the closing meeting personally, i.e., if you’re out-of-state, closing can take anywhere just about anywhere as we have mobile notaries that can help you with signing documents and notarizing your signature. 

 

--Joel Lobb

Mortgage Loan Officer

Individual NMLS ID #57916

click here for directions to our office

Text/call:      502-905-3708

email:          kentuckyloan@gmail.com

https://www.mylouisvillekentuckymortgage.com/

 

Kentucky Mortgage Rates and Home Loan Options

Kentucky Mortgage Rates and Home Loan Options

Kentucky is known for its native bluegrass pastures, thoroughbred horses, and bluegrass music. It's also estimated that one-third of all bourbon produced comes from the State of Kentucky. Its two largest metropolitan areas are the cities of Louisville and Lexington, the former being the home of the world's most famous horse race, the Kentucky Derby.



For those who don't fancy themselves bourbon fans or sport enthusiasts there are still many options for lively entertainment in Kentucky. And just as many options when it comes to settling down, owning a home, and finding a loan with a great mortgage rate.



The more you know, the better equipped you will be to understand the qualifying requirements from some of the lenders in Kentucky. Most require financial documentation, while others have a more relaxed underwriting process.



It helps to be educated when shopping for your new home loan, and the best place to find out more about current mortgage rates and loan options in Kentucky is right here at lendingtree.com.

Mortgage Interest Rates on Kentucky FHA Loans

The FHA insured loan program provides many borrowers with competitive mortgage interest rates and an excellent loan option with which to purchase a home. Those who don't have a bundle to spend on down payments can use an FHA insured loan through a local lending partner to obtain financing up to 96.5 percent of the purchase price of the home with loan amounts up to $417,000.



To achieve even lower mortgage rates, those who can manage a larger down payment can get a conventional loan through traditional Kentucky lenders. These loans offer the lowest possible interest rates to both existing and new homeowners.

Jumbo Loan Options in Kentucky

If you need a loan that is larger than the conforming loan limit, chances are you'll be getting a jumbo loan. These loans are offered through most local and statewide lenders and those with good credit and income levels large enough to qualify can obtain a jumbo loan at market mortgage rates or just slightly above. They frequently carry higher mortgage interest rates due to the increase risk associated with the larger loan amount.

Assistance with Down Payment, Closing Costs, and KY Mortgage Rates

Government agencies, like the Kentucky Housing Corporation, can provide education materials and counseling for those wishing to own a home in the state of Kentucky. These agencies also offer loan programs through its lender partners in which buyers can tap into one of the following:

Down payment assistance of $6,000 over 10 years at 1% or 5% depending on your income. 



• VA Loan - guaranteed by the Veterans Administration for qualified military veterans. Offers no down payment if the property appraises for the sale price or greater, has flexible underwriting is flexible, and no monthly mortgage insurance payments and no minimum credit score requirements. Lenders however will create overlays to require a 620 credit score for most VA mortgage loan approvals nowadays with Automated Underwriting through DO/DU



• Conventional loans – with as little as three percent down payment (lower than FHA requirements) yet still covered by and approved mortgage insurance company. This loan is for those with a credit score of 680 or better, offering quick turnaround time and no up-front mortgage insurance payments.

-







Joel Lobb (NMLS#57916)

Senior Loan Officer



Company ID #1364


Text/call 502-905-3708

kentuckyloan@gmail.com

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/