Category: fha mortgage insurance premiums

Kentucky FHA loans have always been a great alternative for people who don’t quite qualify for Conventional financing.  The guidelines are more forgiving allowing for smaller down payments, higher debt to income ratios, some credit issues, and more sources for the down payment. 

The great thing is that the interest rate is only slightly higher than a conventional loan. Sometimes the interest rate is actually lower.  Remember this!  IF you go to a Kentucky Mortgage Broker or a Bank and the rate quoted is exceptionally higher, they are charging you too much.  Call around for quotes.  You will usually get a better rate from a Kentucky Mortgage broker.

Advantages:

1. Kentucky FHA loans are not as strict on credit scoring. We can go down to a 580 credit score with compensating factors and if it makes sense.
2. High debt to income ratios: 31% / 55%
3. 100% of down payment can be a gift from: relative, close friend, or employer. Currently Kentucky Housing will give you up to $6,000 for down payment assistance with Kentucky FHA mortgage loans
4. Seller, builder, or realtor can pay up to 6% of the sales price towards the buyers closing costs, discount points, prepaids,  and up front mortgage insurance premium.
5. Buyer can finance closing costs into the loan, except for prepaids and discount points.
6. Credit criteria is not as strict as a Conventional loan.  In fact, you might qualify if you have filed a chapter 13 bankruptcy and have been in it for at least one year.

Disadvantages:

1. Kentucky FHA mortgage insurance may be more expensive than Conventional mortgage insurance.
2. Maximum loan amounts are lower than conventional loans and they are determined by area.