Joel Lobb Income, Employment & DTI

KENTUCKY FHA MORTGAGE – ACCEPTABLE DOCUMENTATION FOR DOWN PAYMENT FUNDS

KENTUCKY FHA MORTGAGE  – ACCEPTABLE DOCUMENTATION FOR DOWN PAYMENT FUNDS

PROVIDED BY FEDERAL, STATE OR LOCAL GOVERNMENTS
 
FHA recently released Mortgagee Letter 2013-14, requiring documentation that mortgagees must provide to demonstrate eligibility for FHA mortgage insurance of loans when a Federal, State, or local government, its agency or instrumentality, directly provides the borrower‘s required Minimum Cash Investment through secondary financing.
Acceptable forms of documentation include the following:
  • A cancelled check, evidence of wire transfer or other draw request showing that prior to or at the time of closing the Government Entity had authorized a draw of the funds on its account provided towards the borrower’s required Minimum Cash Investment from the Government Entity’s account; or
  • A letter from the Government Entity, signed by an authorized official, establishing that the funds provided towards the borrower’s required Minimum Cash Investment were funds legally belonging to the Government Entity at or before closing
Where a letter from the Government Entity is submitted, the precise language of the letter may vary because of differences in the funding and legal authority of each Government Entity. Examples of acceptable language, which would establish the funds were legally belonging to the Government Entity, would include the following:
  • A statement that the Government Entity has, at or before closing, incurred alegally enforceable liability as a result of its agreement to provide the funds towards the borrower’s required Minimum Cash Investment;
  • A statement that the Government Entity has, at or before closing, incurred alegally enforceable obligation to provide the funds towards the borrower’s required Minimum Cash Investment; or
  • A statement that the Government Entity has, at or before closing, authorized a draw on its account to provide the funds towards the borrower’s required Minimum Cash Investment.
        The mortgagee is not required to document the actual transfer of funds in satisfaction of the obligation or liability, which resulted from the funding of the borrower’s required Minimum Cash Investment by the Government Entity, before closing, provided the mortgagee has obtained documentation that a legally enforceable liability or obligation was incurred at or before closing. Where such documentation is provided establishing that a legally enforceable liability or obligation was incurred at or before closing, the funds provided at closing for down payment assistance will be considered by HUD to be funds legally belonging to the Government Entity. However, failure of the Government Entity to satisfy the obligation or liability may result in a determination that the funds were provided by a prohibited source.
         Note, it is still required that you provide a Gift Letter for the borrower’s Cash to close, including the required Minimum Cash Investment, as described in HUD Handbook 4155.1 5.B.5. – a Gift Letter Requirement
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Joel Lobb Collections, Student Loans & Debts, Credit Scores & Bad Credit, FHA Guidelines & Requirements, HUD Homes & $100 Down, Kentucky First-Time Home Buyers

Mortgages and Credit Scores

Today, credit scores plays a big role in determining whether or not your mortgage loan is approved and at what interest rate.  Obtaining a mortgage loan at an interest rate just one point less results in a savings of about $5,000 on the average 15 year mortgage, and significantly more on a 30 year mortgage (about $50,000).
 
Why do lenders use your credit score in their lending decisions?  Because they discovered that there is a direct correlation between your credit score and the odds of your becoming delinquent on your monthly mortgage payments. Consider the following statistics the mortgage industry has compiled:

If Your Credit Score Is
 
780  

700
680
660
645
630
615
600
585
Your Odds of Becoming 90 Days Delinquent are
 

Factors contributing to someone's credit score...
Factors contributing to someone’s credit score, for Credit score (United States). (Photo credit: Wikipedia)
576 to 1
288 to 1
144 to 1
72 to 1
36 to 1
18 to 1
9 to 1
4 to 1
2 to 1
As the above table illustrates, those with credit scores below 630 are not a very good risk, so they will obtain a mortgage at a significantly higher interest rate and this will add anywhere from $50 to about $250 to their monthy mortgage payment and add thousands to the price of the home.
 
If your score is 660 or above, you can get a mortgage loan fairly easily since you are a pretty good risk. As stated above, the higher your score the lower your interest rate, so your goal shouldn’t be to obtain a credit score of 660; it should be to achieve a credit score of at least 700.  Some lenders will reward you if your credit score is higher than 725, by lowering your interest rate by about 1/4th of a percent.  If it is between 700 and 724, it will be lowered by 1/8th of a percent.
 
Does an interest point or two make such a big difference in the price of the house?  You bet it does!  It means saving  thousands in finance charges and a lower monthly payment.  For example, paying an interest rate just two points higher means paying an additional $200 each month on your house payment on the typical $150,000, 30-year mortgage loan.  That’s at least $72,000 more you’re going to pay for your house!
 
There are steps you can take to raise your credit score or overcome a low credit score:
 
(1)  Offer a larger down payment so that you aren’t borrowing so much money
(2)  Lower your debt-to-income ratio by paying off as much debt as you possibly can before applying for a mortgage loan in order to increase your credit score
(3)  Don’t buy a car just before applying for a mortgage loan as it lowers your credit score
For a Kentucky FHA Purchase Loan, we can go down to a 620 credit score with the minimum down payment of 3.5%.  No bankruptcies or foreclosures in the last 2 years.

FHA Manual Underwriting

The minimum FICO for FHA Manual Underwrites is being lowered to 620

Joel Lobb
Senior  Loan Officer
(NMLS#57916)
EVO Mortgage
10602 Timberwood Cir, Ste 3,
Louisville, KY 40223
 
 
 Company NMLS #1738461

ated Articles
Joel Lobb FHA Refinance (Streamline & Cash-Out)

CHANGES TO KENTUCKY FHA STREAMLINE REFINANCE TRANSACTIONS.

CHANGES TO KENTUCKY FHA STREAMLINE REFINANCE TRANSACTIONS.

502-905-3708 for your free FHA Mortgage Prequalification
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 on or
after November 17, 2009. Please review the new maximum insurable mortgage
calculations below.

**** 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
100% 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.
I.) Uniform Residential Loan Application (URLA) – Mortgagees may no longer use
an abbreviated version of the URLA. Due to various disclosure requirements and
our long-standing belief that borrowers are best served when certifications they must
make are divulged as early as possible in the loan application process, the
application for mortgage insurance must be signed and dated by the borrower(s)
before the loan is underwritten. Mortgagees are permitted to process and underwrite
the loan after the borrowers and interviewer complete the initial URLA and initial
form HUD-92900A, HUD/VA Addendum to Uniform Residential Loan
Application.

Click here for revised FHA Refinance Grid.

If you have any questions regarding this announcement,

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
kentuckyloan@gmail.com

EVO Mortgage (NMLS #1738461)*
10602 Timberwood Cir, Ste 3*
Louisville, KY 40223*

Apply for Free for your Louisville Kentucky Mortgage-Takes only 3 Minutes
Apply for Free for your Louisville Kentucky Mortgage-Takes only 3 Minutes
Joel Lobb Collections, Student Loans & Debts, Credit Scores & Bad Credit

The Best Kind of Loan for Your Credit Score

The Best Kind of Loan for Your Credit Score.

 

I’m often asked if having certain types of credit or loans is better or worse than other types of credit or loans.

I get questions like, “John, is it better to have a car loan or a mortgage for my scores?” I also hear, “John, is it better to have a secured card or an unsecured card for my scores?”

In fact, you can swap in almost any type of credit-related account and I’ve been asked about that scenario.

I’ve been getting this type of question for almost 15 years now, and it seems that people believe there’s value or a penalty for having certain types of loans or accounts on your credit reports. That’s completely understandable and, thankfully, almost a complete myth.

Credit Cards

First, let’s tackle the secured credit card, versus the unsecured credit card, versus the charge card question. The assumption is that the type of card has a direct impact on your credit scores. That’s an incorrect assumption, meaning, you’re not penalized or rewarded for having one type of card over another.

That doesn’t mean one form of plastic isn’t better or worse for your credit than another.  For example, a secured credit card is easier to max out than an unsecured credit card.

Why? The reason is because secured cards have considerably lower credit limits than unsecured credit cards. It has nothing to do with the fact that one is secured and one isn’t. It has everything to do with the credit limits.

Installment Loans

When it comes to installment loans, the issue of credit limits disappears because installment loans don’t have credit limits. They do, however, have original loan amounts.

An auto loan is likely to have a considerably lower loan amount than a mortgage, home equity loan and perhaps even a student loan. And, balances do matter on installment loans, albeit slightly.

Exactly like credit cards, credit scores do not treat installment loans of one variety or another differently. The collateral issue of balances can cause variable score impact, however.

Defaulting

One thing we haven’t addressed yet is the issue of missing payments and defaulting. Defaulting on a credit card, secured card, charge card, auto loan, mortgage, or any other kind of credit card, is treated equally — as one default.

You’re not penalized because you’ve defaulted on one variety of credit account versus another. You can, however, have a much larger default amount on a mortgage than any other type of credit account and that’s where the score impact can be variable.

The bottom line is: it’s not really the type of account that’s important, but it’s the incident that matters.

One Exception to the Rule

There is one very small exception to this rule. In fact, it’s so small that I thought very hard about omitting it.

There’s a chance your score could be negatively impacted if you have too many finance company accounts on your credit reports. These are the loans offered by consumer finance lenders who often target the near or subprime consumer.

Notwithstanding the consumer finance issue, the lender is also meaningless in your scores. So, you don’t get rewarded for doing business with a large, well-known credit card issuer and you don’t get penalized for doing business with a subprime credit card issuer.

In fact, credit scores are brand agnostic when it comes to your credit accounts. The most important factor is how you manage them.

Editor’s Note: This article by John Ulzheimer was originally published on MintLife.

See more from Mint.com:

Read more: http://www.minyanville.com/trading-and-investing/personal-finance/articles/credit-score-credit-score-meaning-installment/10/25/2012/id/45351#ixzz2APp8zSGT

Joel Lobb Down Payment Assistance & KHC, Kentucky Mortgage Rates

Mortgage Rates Kentucky

Mortgage Rates Kentucky.

via Mortgage Rates Kentucky.

 

Current  Kentucky mortgage rates today   

Over 500 loans closed in Kentucky and still going strong. Call us today for your personal, free loan quote. We are a local company that is here to serve your home loan needs. 502-905-3708 or kentuckyloan@gmail.com

Mortgage Rates Louisville, Kentucky

Mortgage Rates Louisville, Kentucky 
Current Louisville Kentucky Mortgage Rates Today 

Mortgage Product     Mortgage Rates     (APR)


15 Year Fixed Conventional                   3.000%            3.174% apr
30 Year Fixed Conventional                   3.625%            3.978% apr
30 Year Fixed Kentucky FHA                  3.500%            4.814% apr
30 Year Fixed Kentucky USDA               3.500%            4.584% apr
30 year Fixed Kentucky VA                    3.500%            4.451% apr
5 Year Arm Jumbo Loan                        3.000%            3.219%apr
30 year Fixed  Jumbo Loan                   4.250%            4.415%apr

Kentucky Mortgage  Rates are subject to qualifying criteria and Mortgage Rates can change without notice.
Assumptions include a 640 or higher credit score for FHA, USDA, KHC,  and 620 credit scores for a VA loan. A loan amount of $100,000.00 is assumed and a 30 day lock required for a Kentucky Mortgage Only.

A 720 credit score or higher is assumed for a Kentucky  Conventional Rate Mortgage loan rates and a loan amount of $100,000.00. The loan to value for Kentucky Conventional loans are assumed at 80% ltv or less.

  • The displayed Annual Percentage Rates (APRs) reflect the interest rates, total points, and additional estimated pre-paid finance charges for the loan products shown, but do not include other closing costs.
  • The approximate cost of prepaid finance charges does not constitute and is not a substitute for the Good Faith Estimate of Closing Costs (GFE) that you will receive once you apply for a loan. This is not a mortgage loan approval or commitment to lend. The actual fees, costs and monthly payment on your specific loan transaction may vary and may include additional fees and costs.
  • For loans with less than 20% down payment borrower-paid mortgage insurance may apply.
  • These mortgage rates are based on a variety of assumptions and conditions which include a consumer credit score which may be higher or lower than your individual credit score. Your loan’s interest rate will depend upon the specific characteristics of your loan transaction and your credit profile up to the time of closing.

  • FHA

    • Kentucky FHA loans require both an upfront and an annual mortgage insurance premium. The premium varies based on the loan characteristics, your credit score, whether you’ve received loan counseling, and other factors.

  • Jumbo

    • Kentucky Jumbo Mortgage  rates are higher for borrowers who do not meet the criteria for Conventional Mortgage Loans.,; Please contact your home mortgage consultant for details regarding the  criteria or with any other questions.
  •   VA Loans
                Kentucky VA loans require a funding fee upfront paid to VA in the form of mortgage insurance .he premium varies based on the loan characteristics, your credit score, whether you’ve received loan counseling     factors.
  • USDA Loans
                         Kentucky  USDA loans require a funding fee upfront and a monthly mortgage insurance premium paid to RHS/USDA. The premium varies based on the loan characteristics, your credit score,    and other factors.

        Today’s  Louisville Kentucky Mortgage Rates may contain points

Subject to credit approval
Rates are subject to change without notice.

            

Rates are subject to qualifying criteria and Mortgage Rates can change without notice.
Assumptions include a 640 or higher credit score for FHA, USDA, KHC,  and 620 credit scoresfor a VA loan. A loan amount of $100,000.00 is assumed and a 30 day lock required.

A 720 credit score or higher is assumed for Conventional Rate Mortgage loan rates and a loan amount of $100,000.00. The loan to value for Conventional loans are assumed at 80% ltv or less.

NMLS# 57916

Free Credit Report and Pre qualifications available anytime. 

FHA, VA, KHC, Rural Housing, USDA, Fannie Mae Mortgage Loans