Kentucky Mortgage Broker Offering FHA, VA, USDA, Conventional, and KHC Down Payment Assistance Home Loans $100 down FHA program, 580 credit score FHA

Understanding Key Mortgage Terms for Homebuyers

The mortgage process can often be a confusing one — whether you’ve bought a home before or not. There’s a lot of prep work and moving parts, and most of the terminology is unfamiliar to the average consumer.

Fortunately, that last part is an easy fix.

Are you getting ready to buy a home or refinance your current mortgage? Take a look at some of the lesser-known terms you might want to know.

  • Annual Percentage Rate (APR): This number reflects the total annual cost of taking out your mortgage loan. It’s different from your mortgage interest rate and includes some extra fees.
  • Underwriting: When a loan professional evaluates your application and verifies all your financial details, that’s underwriting. It’s important to ensure that you have the means to manage your new monthly payment.
  • Escrow: An escrow account is used to hold funds prior to closing, including your earnest money deposit. You might also pay into an escrow account to cover property taxes, homeowners insurance and private mortgage insurance (if you have it).
  • Closing Disclosure: This is a document that you’ll be given at least three days before your closing date. It should detail all the final costs of your loan, as well as what you’ll be expected to pay on closing day.
  • Mortgage Note: You’ll sign this document at closing.It outlines the terms of your home loan and includes how much you’re borrowing, whether it’s a fixed-rate or adjustable-rate mortgage and more.
  • Prepaid Costs: These also come up at closing and will go into your escrow account. They usually cover mortgage interest, property taxes and homeowners insurance expenses that occur between your closing date and the date your first mortgage payment is due.

If you need help understanding any part of the mortgage process, get in touch today.

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Understanding FHA’s Identity of Interest Transactions

Does FHA Restrict down payment requirements on Identity of Interest Transactions?

The 85 percent maximum LTV restriction does not apply for Kentucky FHA Loans in regards to FHA Identity-of-Interest transactions under the following circumstances:

👇👇👇

FAMILY MEMBER TRANSACTIONS•  the principal residence of another family member; or  a property owned by another family member in which the borrower has been a tenant for at least six months immediately predating the sales contract. A lease or other written evidence to verify occupancy is required.

BUILDER’S EMPLOYEE PURCHASE• An employee of a builder, who is not a family member, purchases one of the builder’s new houses or models as a principal residence.

CORPORATE TRANSFER • A corporation transfers an employee to another location, purchases the employee’s house, and sells the house to another employee.

TENANT PURCHASE• the current tenant purchases the property where the tenant has rented the property for at least six months immediately predating the sales contract. A lease or other written evidence to verify occupancy is required.

Source: FHA Handbook 4000.1

What You Need To Know About Identity Of Interest Transactions
What You Need To Know About Identity Of Interest Transactions

 
 


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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/
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5 Things I Wish I’d Knew Before Getting an FHA Mortgage

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Kentucky FHA Appraisal Requirements for Validity Period

The following update aligns with FHA Mortgagee Letter 2022-11 and is effective for all FHA loans with case numbers assigned on and after June 1, 2022.
Appraisal Validity Period
Loans with case numbers assigned prior to June 1, 2022
Loans with case numbers assigned on and after June 1, 2022
• The initial appraisal validity period is 120 days from the effective date of the appraisal.
• The 120-day validity period may be extended for 30 days at the option of the underwriter if the conditional commitment is issued before the original appraisal expiration date.
• An appraisal update may be used to extend the validity period of the initial appraisal. The appraisal update must be performed before the initial appraisal with no extension has expired.
• When the initial appraisal is updated, the updated appraisal will be valid for 240 days after the initial appraisal effective date.
• The initial appraisal validity period is 180 days from the effective date of the appraisal.
• If the initial appraisal will be more than 180 days at the disbursement date, an appraisal update may be performed to extend the appraisal validity period.
• When the initial appraisal is updated, the updated appraisal will be valid for one year after the initial appraisal effective date.
With these updates, the optional 30-day extension is no longer necessary and has been eliminated. In addition, the requirement for the appraisal update to be performed before the initial appraisal has expired has been removed.

 

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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Kentucky FHA Mortgage Loan Lender Guidelines