Kentucky Mortgages Rates for FHA, VA, USDA, Conventional, Jumbo Mortgage Loans.
via Kentucky Mortgages Rates for FHA, VA, USDA, Conventional, Jumbo Mortgage Loans.
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:
Your Odds of Becoming 90 Days Delinquent are
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
Senior Loan Officer
(NMLS#57916)
American Mortgage Solutions, Inc.
800 Stone Creek Pkwy, Ste 7,
Louisville, KY 40223
phone: (502) 905-3708
Fax: (502) 327-9119
Company ID #1364 | MB73346
ated Articles
- Kentucky FHA Mortgage Guideline Changes April, 2013 (louisvillemortgageguide.com)
- Louisville Kentucky Mortgage Rates (kentuckyusdaloan.com)
- Unintended consequences? (itv.com)
- Credit Score Need a Tweak? Here’s How (hispanicbusiness.com)
- Is subprime heating up again? (bankrate.com)
CHANGES TO KENTUCKY FHA STREAMLINE REFINANCE TRANSACTIONS.
CHANGES TO KENTUCKY FHA STREAMLINE REFINANCE TRANSACTIONS.
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
502-813-2795 fax
jlobb@keyfinllc.com
Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.com
Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
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:
Louisville Kentucky $100 Down HUD program
Louisville Kentucky $100 Down HUD program
Here is what you need to know: When someone’s Louisville Kentucky FHA loan goes into foreclosure, that home becomes a HUD home. HUD becomes the owner of the home and offers the home for sale to recover the loss on the foreclosure. This can create a big opportunity for Louisville Kentucky First Time Home Buyers, because HUD will allow you to obtain an FHA loanand instead of 3.5% down, you only have to put $100 down.
Other things to consider:
- The program is only for primary residences (No Investors)
- FHA loans only
- You can ask for closing cost up to 3%
- You will still have to put $500-1,000 down in earnest money
- You can get up to $5,000 in repairs (conditions apply)
So you’re asking how do I find these homes. As mentioned, only certain homes are available for the $100 down HUD program, so you need a Realtor that is knowledgeable about the program and has access to the bidding process. The bidding process can be overwhelming unless you are working with the right people. Call me today to get pre-approved and I can refer you to a Realtor in your area that can get you a home, with only $100 down.
Related Articles
- What Is HUD and What Does It Have to Do with the Foreclosure Cleanup Industry? – Real Estate – Foreclosures (rawbusinesslaw.com)
- Avoiding Foreclosure (creditrepair.com)
- Louisville Kentucky Mortgage Rates (louisvillekentuckymortgagerates.com)
- FHA Loan Requirements – Requirements for a FHA loan refinance (streamlinerefinance.net)
- Mortgage Rates Kentucky (kentuckyfirsttimehomebuyer.com)
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Documenting Disability Earnings as Stable Income
Documenting Disability Earnings as Stable Income.
Documentation Requirements for Income from the Social Security Administration
(SSA).
Purpose This Mortgagee Letter (ML) clarifies guidance on documentation requirements for
different types of SSA income used for income qualification purposes. This ML is
provided in response to requests for clarification on this issue.
Effective Date This ML is effective immediately.
All income from the Social Security Administration (SSA) including, but not limited to, Supplemental Security Income (SSI), Social Security Disability Insurance (SSDI), and Social Security Income, can be used to qualify the borrower if the income has been verified, and is likely to continue for at least a three year period from the date of mortgage application.
The lender must verify income by obtaining from the borrower any one of the following documents:
Federal tax returns; the most recent bank statement evidencing receipt of income from the SSA; a Proof of Income Letter, also known as a “Budget Letter” or “Benefits Letter” that evidences income from the SSA (Please visit http://www.ssa.gov for an explanation of types of letters issued by the SSA); or a copy of the borrower’s Social Security Benefit Statement, SSA-1099/1042S.
In addition to verification of income, the lender must document the continuance of this income by obtaining from the borrower (1) a copy of the last Notice of Award letter which states the SSA’s determination on the borrower’s eligibility for SSA income, or (2) equivalent document that establishes award benefits to the borrower (equivalent document). If any income from the SSA is due to expire within three years from the date of mortgage application, that income may only be considered as a compensating factor.
Documentation Requirements for Income from the Social Security Administration (continued)
If the Notice of Award or equivalent document does not have a defined expiration date, the lender shall consider the income effective and likely to continue. The lender should not request additional documentation from the borrower to demonstrate continuance of Social Security Administration income. Under no circumstance may lenders inquire into or request documentation concerning the nature of the disability or the medical condition of the borrower
Note: Pending or current re-evaluation of medical eligibility for benefit payments is not considered an indication that the benefit payment is not likely to continue.
Note: An initial Notice of Award letter (or its equivalent) may specify a start date for receipt of income in the future. Lenders may consider this income as effective income as of the start date specified in the Notice of Award Letter. The borrower must have other income to qualify for the mortgage until the start date for receipt of income.
Note: Other forms of long-term disability income (such as worker’s compensation or private insurance) may be considered qualifying income with a reasonable expectation of continuance. Lenders should use procedures similar to those noted above to verify such income.
HUD Homeownership Center Reference Guide Refinances
HUD Homeownership Center Reference Guide Refinances.
louisville ky cash out refinance
Chapter 2
Mortgage Credit Guidelines
Page 2-19
A refinance transaction involves paying off an existing real estate debt from proceeds of a new mortgage. For all refinance loan transactions, 1) the borrower must be current for the month due and, 2) there must a current payoff statement in the case binder.
Under the terms and conditions outlined below, FHA will insure the following types of refinances:
A. Regular Refinances – “cash-out” and “no cash-out”
1. “Cash-Out” Refinances: the maximum loan-to-value and combined loan-to-value of any cash-out refinance is 85%. The calculation is based either off the appraised value or the original sales price, depending on the length of time the borrower has owned the property.
a)The loan is limited to a combined LTV (FHA insured first mortgage and any subordinated lien) of 85% of the appraised value, provided the borrower has owned the property for at least one year. Note that manufactured homes have other restrictions (Handbook 4155.1, section 3.A).
b) If the property was purchased less than one year preceding the application date, the LTV/CLTV (85%) for the mortgage amount must be calculated using the lesser of the appraised value or the original sales price of the property.
c) The property that is security for the refinanced mortgage may be a 1-4 unit property.
d)The property must be owner-occupied. Non-owner occupant co-borrower may not be added in order to meet FHA?s credit underwriting guidelines.
e)Properties owned free and clear may be refinance as cash-out transactions.
f)3-4 unit properties are required to pass the self sufficiency test and have a minimum of 3 months reserves after closing.
g) Properties acquired by inheritances within the past 12 months are eligible for a cash-out refinance transaction provided they have been occupying the property as their primary residence since the inheritance. The lender must document the acquisition by the borrowers via inheritance.
h)Manufactured homes: there are restrictions applicable please refer to Handbook 4155.1, section 3.A.
2.No Cash-Out Refinances (non-streamline): The maximum mortgage is based on the lesser of “a” and “b” below (a third calculation is applicable if owned less than 12 months):
a)The maximum LTV percentage is multiplied by the appraised value, exclusive of closing costs (please refer to Mortgagee Letter 2010-24).
b)The sum of the existing first lien, any purchase money second mortgage and/or any junior liens over 12 months old, closing costs, prepaid expenses, accrued late charges, escrow shortages, borrower paid repairs required by the appraisal, discount points, prepaid penalties charged on a conventional loan and FHA Title 1 loans as determined by the appropriate HOC subtract any refund of refund of upfront MIP. Note that the prepaid expenses may include per diem interest through the end of the month for the new loan, hazard/flood insurance premiums, mortgage insurance premiums and property tax deposits needed to establish the escrow account. The existing first lien may include the interest charged by the servicing lender, when the payoff is not received by the first of the month, but may not include any delinquent interest.c)If the property was acquired less than one year before the loan application, and the existing loan is not an FHA loan, the original sales price, must be considered in calculating the maximum mortgage. Refer to Handbook 4155.1, section 3.B.
d)There may not be more than $500 in incidental cash back to the borrower.
e)If there is an existing subordinate lien refer to Handbook 4155.1, section 3.A, 3.B and ML 11-11.
f)Additional restrictions apply for manufactured homes; refer to Handbook 4155.1, section 3.A.
B.Streamline Refinances (with or without an appraisal): Streamline transactions involve the refinance of the FHA insured first mortgage only. This type of loan is designed to lower the monthly principal and interest payments on the current FHA insured mortgage and involves no cash back to the borrower. All Streamline transactions must meet the following criteria:
Note: Effective with case numbers assigned on or after April 18, 2011, the use of an appraisal to increase the insurable mortgage balance for a “non-qualifying” streamline refinance will no longer be permitted.
I)At the time of loan application: a) the borrower must be current, b) must have made at least 6 full months of payments since the first payment date and, c) at least 210 days must have passed from the closing date of the mortgage being refinanced.
2)At the time of loan application the borrower must exhibit an acceptable payment history as described below:
a) For mortgages with less than a 12 month payment history, the borrower must have made all mortgage payments within the month due.
b)For mortgages with a 12 month payment history or greater, the borrower must have:i)Experienced no more than one 30 day late payment in the preceding 12 months, AND
ii)Made all mortgage payments within the month due for the three months prior to the date of loan application.
III)The lender must determine there is a net tangible benefit as a result of the streamline refinance transaction, with or without an appraisal. Net Tangible benefit is defines as:
a) Reduction to the principal, interest plus MIP by at least 5% (compare the new P & I & MIP to the existing P & I & MIP), or
b) For details of permissible minimum thresholds involving refinancing in or out of an ARM refer to ML 2011-11.
4)Investment/secondary property: for FHA financed properties that have become investment properties or secondary residences, a streamline refinance is only permitted without an appraisal. All other criteria must be met, however these properties may not be refinanced into an ARM.
5) Assets: If assets are needed to close, they must be verified.
6)A current payoff statement must be in the case binder.
7) Subordinate financing: if subordinate financing will remain in place, the maximum CLTV is 125%. To calculate the maximum CLTV for streamlines without an appraisal, use the “original property value” shown on the Refinance Authorization screen in FHAC. For streamlines with an appraisal, the CLTV calculation is based on the new appraised value.
8)LDP and GSA lists are required to be checked, however there is no need to check the CAIVRS.
9)URLA: for non-credit qualifying streamlines an abbreviated version of the URLA is permitted, however for credit qualifying streamlines, a fully completed URLA is required.
10)Maximum mortgage:
a) Streamline refinance without an appraisal (owner occupied): the maximum mortgage is the outstanding principal balance plus interest charged by the servicing lender (but may not include delinquent interest, late charges or escrow shortages), minus UFMIP refund plus new UFMIP.
b) Streamline refinance with an appraisal: as reflected above for case number assigned on or after April 18, 2011. For cases with case numbers assigned prior to this date refer to Handbook 4155.1, section 6.C.
c) Streamline refinance without an appraisal (non-owner occupied): these may only be refinanced without an appraisal and the new base mortgage may only cover the outstanding principal balance less the any UFMIP refund. Further the term of the mortgage must be the lesser of 30 years or the remaining term of the mortgage plus 12 years.
Joel Lobb (NMLS#57916)
Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.comKey Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.comKey Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
Website Fine Print
The content provided on this website is presented or compiled by Joel Lobb and is provided for informational purposes only. It does not necessarily represent the views or opinions of Key Financial Mortgage .Neither Joel Lobb nor Key Financial Mortgage assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information disclosed, or represents that its use would not infringe privately owned rights.
*
The mortgage or financial services or strategies mentioned in this website may not be not suitable for you.
Key Financial Mortgage is an Equal Opportunity Lender. All rights Reserved.
Joel Lobb is a Licensed Mortgage Originator:NMLS #57916. Key Financial Mortgage NMLS # 1800 is a licensed Mortgage Broker Company in the State of Kentucky
Legal Disclaimer
* This web site is not the FHA, VA, USDA, HUD or any other government organization responsible for managing, insuring, regulating or issuing residential mortgage loans.
**Download Fair Housing Booklet – CLICK HERE
All approvals and rates are not guaranteed, and are only issued based on standard mortgage qualifying guidelines.
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- HARP 2.0 Refinance Guidelines for Kentucky Mortgages (kentuckyfirsttimehomebuyer.com)
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- KHC Refinance Products (mylouisvillekentuckymortgage.com)
Kentucky FHA Mortgage Lender 