Kentucky VA Home Loan Approval Requirements with Collections on Credit Report

Collection accounts are account for a debt that have been submitted to a collection agency by the creditor generally due to nonpayment. Below are general tips and guidance on what DU will require when collection accounts are reporting on a borrower’s credit report. Accounts that are reported as past due but not yet turned over to a collection agency must be brought current. These past due accounts are not considered collection accounts. Kentucky Mortgage Requirements for Collections and VA Home Loan Approval Any collection account required by DU to be paid must be paid prior to or at closing. Isolated collection account does not necessarily have to be paid off for the loan approval. Borrowers with a history of collection accounts should have reestablished satisfactory credit in order to be considered a satisfactory credit risk. Lenders/underwriters should review the complete credit history and use sound judgment to determine if the collection account poses a credit risk to the borrower’s ability to repay the loan. If the collection account is listed on the credit report with a minimum payment, then the debt should be recognized at the minimum payment amount Joel Lobb (NMLS#57916) Senior Loan Officer American Mortgage Solutions, Inc. 10602 Timberwood Circle Suite 3 Louisville, KY 40223 Company ID #1364 | MB73346 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/

Kentucky VA loan with outstanding collections and charge offs listed on the credit report?

Collections & Charge Offs are two different things.  Below is what VA saying about them:

 

Collection Accounts

Isolated collection accounts do not necessarily have to be paid off as a condition for loan approval. A credit report may show numerous satisfactory accounts and one or two unpaid medical (or other) collections. In such instances, while it would be preferable to have collections paid, it would not necessarily be a requirement for loan approval.

However, collection accounts must be considered part of the borrower's overall credit history and unpaid collection accounts should be considered open, recent credit.

Borrowers with a history of collection accounts should have re-established satisfactory credit in order to be considered a satisfactory credit risk.

While VA does not require that collection accounts be paid-off prior to closing if the borrower's overall credit is acceptable, an underwriter must address the existence of the collection account(s) with an explanation on VA Form 26-6393, Loan Analysis, for excluding the negative credit history they represent.

If the collection account is listed on the credit report with a minimum payment, then the debt should be recognized at the minimum payment amount.

Charged off Accounts

These accounts are typically collections in which the creditor is no longer pursuing collection of the account. The underwriter must address the circumstances regarding the negative credit history when reviewing the overall credit of the borrower(s).

 

 
2 different topics best if you can send me credit to review. 

 

·         Charged off accounts generally ignored

·         Collection accounts on Federal debt are a big issue so we careful there

·         Collections not required to be paid off unless they are extremely high

·         Manual Underwrite we do require an LOE from Veteran for collections

·         What happened, what they did to resolve, what are they doing in the future to either resolve or to prevent this from happening and finally if they are going to enter into a payment plan or not.  Ultimately on the resolution of the collection the UW does not care but VA requires that as part of LOE.

 

Hope this helps send me credit for full evaluation.

 

The VA underwriter will want to verify the Kentucky Mortgage Veteran has the ability to pay these items or will want to know how they were paid off before closing.

Any collection or charge off showing as a judgement or lien on the VA mortgage applicant's credit report, must be paid before closing. These affect the title and must be paid before the mortgage is recorded

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Bankruptcy Guidelines for Kentucky Conventional & ...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Bankruptcy Guidelines for Kentucky Conventional & ...: Bankruptcy Guidelines for Kentucky Conventional  Kentucky FHA Mortgage Loans  Bankruptcy Chapter 7 ...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Louisville Kentucky Mortgage Lender for FHA, VA, ...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Louisville Kentucky Mortgage Lender for FHA, VA, ...: Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Credit Scores Required For A Kentucky Mort...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky First Time Home Buyer Programs to Conside...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky First Time Home Buyer Programs to Conside...: First Time Home Buyer Programs to Consider for 2021 Kentucky Homebuyers. Zero Down Mortgage Loans in Kentucky The Kentucky VA and the Kentuc...

• Kentucky Federal Housing Administration (FHA) loans: “With a 3.5% down payment, Kentucky homebuyers may be able to get an FHA loan with a 580 credit score or higher. If you can manage a 10% down payment, though, that minimum goes as low as 500.”
• Kentucky Conventional loans: “The most popular loan type typically comes with a 620 minimum credit score.”
• US. Department of Agriculture (USDA) loans: “In general, lenders require a minimum credit score of 640 for a USDA loan, though some may go as low as 580.”
• US. Department of Veterans Affairs (VA) loans: “VA loans don’t technically have a minimum credit score, but lenders will typically require between 580 and 620.”

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: How to Raise Your Credit Score Fast for Kentucky M...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: How to Raise Your Credit Score Fast for Kentucky M...: How to Raise Your Credit Score Fast for Kentucky Mortgage Loan Approval for FHA, VA, USDA and KHC Mortgage loans.  Fico Score Tips to raise ...

When can you get a VA Mortgage again after a foreclosure or short sale?

Foreclosure, Deed-in-Lieu of Foreclosure, and short sales:

Kentucky VA Mortgage Guidelines for getting a VA mortgage after a foreclosure or Short Sale?

See guidelines below:

VA

• Follows guidelines provided for bankruptcies filed under straight liquidation (Chapter 7)
• 2 years from transfer date on Commissioner’s or Transfer deed 
• If the bankruptcy was discharged within 1 to 2 years, it is probably not possible to determine that the applicant is a satisfactory credit risk unless both of the following requirements are met

1. The applicant has obtained credit subsequent to the bankruptcy and has made satisfactory payments over a continued period of time, and 
2. The bankruptcy was caused by circumstances beyond the control of the applicant such as unemployment, prolonged strikes, medical bills not covered by insurance and the circumstances are verified.   Divorce is not viewed as a circumstance beyond the applicants control

•  If the foreclosure or Deed-in-Lieu of a Foreclosure was on a VA loan, the applicant may not have full entitlement.  Information on entitlement not restored and remaining entitlement available can only be determined by borrower’s COE (Certificate of Eligibility)

Kentucky VA Loan

VA loans are for veterans and active duty military personnel. The loan requires no down payment and no monthly mi premiums, saving you on the monthly payment. It does have an funding fee like USDA, but it is higher starting at 2% for first time use, and 3% for second time use. The funding fee is financed into the loan, so it is not something you have to pay upfront out of pocket.

VA loans can be made anywhere, unlike the USDA restrictions, and there is no income household limit and the max loan is $453,000 in Kentucky

Most VA lenders I work with will want a 580 credit score.

VA requires 2 years removed from bankruptcy or foreclosure.

Joel Lobb (NMLS#57916)
Senior  Loan Officer

American Mortgage Solutions, Inc.

10602 Timberwood Circle Suite 3

Louisville, KY 40223

Company ID #1364 | MB73346

Text/call 502-905-3708
 kentuckyloan@gmail.com

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#57916 http://www.nmlsconsumeraccess.org/

-- Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.