Thursday, December 27, 2018

Louisville Kentucky VA Home Loans Frequently Asked Questions

Louisville Kentucky VA Home Loans Frequently Asked Questions

Frequently Asked Questions

  1. What is a COE? Where can I get one?
  2. COE stands for Certificate of Eligibility. This certificate proves that you are a veteran and, therefore, eligible for a VA-guaranteed home loan. Mortgage companies that work with AllMilitary can get a COE for you during the loan process.
  3. How do interest rates fluctuate?

    Interest rates can change daily, sometimes even a couple times a day. They are based on the 30-year mortgage bond and many other market factors. Credit, employment status, loan program and many other factors can also affect interest rates.
  4. Why should I use my VA home loan benefit?

    The VA loan program helps active duty and retired military personnel purchase homes. The VA will guarantee 100% financing on a home at a competitive rate, without you having to pay mortgage insurance. The VA also limits the types of fees that can be charged, protecting you against predatory lending.
  5. What is a funding fee? Do I have to pay for this?

    The VA funding fee is a fee added to loans. The Department of Veterans Affairs uses these fees to help fund its VA loan program. The first time you use a VA loan, the funding fee will be 2.15% of the loan amount. For each subsequent use, the funding fee will be 3.3%. You will be required to pay it, unless you have a service-related disability of 10% or greater, in which case the funding fee is waived.
  6. What does a VA lender need from me to see if I qualify for a loan?

    A VA lender will want to know your income and debts, and your social security number so that your credit history can be checked. After you supply this information to a lender, it will contact you in a few hours to let you know if you are eligible for a VA loan.
  7. What are the benefits of a VA loan?

    A VA loan offers 100% financing with no mortgage insurance fees. The loan is assumable, and you are eligible for streamlined refinancing if rates go down. A VA loan also offers great rates and is less strict on credit than most conventional loans.
  8. Can I get an interest-only loan?

    Interest-only options are unvailable with VA loans. However, many VA-approved lenders offer interest-only conventional loans.
  9. Can I purchase only land with a VA loan?

    No, VA loans are for home purchases and new home construction. The VA will not approve a loan that is only for land. However, you may use a VA loan to purchase a lot for a manufactured home.
  10. May I use my VA eligibility more than once?

    Yes, but in most cases you can only hold one VA loan at a time. After the first home loan is paid in full, your eligibility will be restored for another loan.
  11. What is the funding fee for a second VA loan?

    The funding fee is 3.3 %. But with a 5% down payment, the funding fee drops to 1.5%. 
  12. How important is my credit score to the VA?

    The VA does not emphasize credit scores as much as conventional lenders. However, it does looks for a clear credit history in the borrower's previous 12 months. 
  13. Can a family member use their grandparent's or parent's eligibility to qualify for a VA loan?

    No, only a veteran or the surviving spouse of a veteran killed during active duty is eligible for VA loan benefits. Active duty servicemembers also are eligible if the home they are purchasing will be a permanent residence and they are within 60 days of moving in.
  14. Can I use a co-borrower to help get approval?

    VA guidelines only allow a spouse as a co-borrower. However, many VA-approved lenders offer conventional financing, which may be more suitable if a co-borrower other than a spouse is needed to secure a loan.
  15. May my spouse co-sign so that I can get a larger VA loan?

    Your spouse may co-sign in order to help you qualify for a VA loan. However, your spouse's liabilities, in addition to your spouse's income, will be considered when determining eligibility and loan amount.
  16. Can I have two VA loans at once?

    No. You can have only one VA loan at a time, and it must be used for a home that is your primary residence. After you pay off that loan, you are eligible for another VA loan. 
  17. Does it cost anything to prequalify for a VA loan?

    No, it does not. The VA loan specialists that work with VAJoe do not charge prequalification fees.
  18. What are the differences between VA loans and a conventional loans?

    The main differences are that VA loans are guaranteed by the Veterans Administration, they require no money down, and they usually are easier to qualify for than conventional loans.
  19. Are VA loan rates the same as conventional rates? Better? Worse?

    Some days VA rates are better, some days they are worse. It depends on many market factors. However, VA loan rates are always close to conventional rates.
  20. Does my credit score affect my VA loan rate?

    No. Your credit score has no impact on VA loan rates. It can affect rates for a conventional loan.
  21. If I filed bankruptcy, can I still get a VA loan? How long must I wait after filing?

    Yes, you are still eligible for a VA loan. You must be at least one year out of Chapter 13 bankruptcy or two years out of Chapter 7. You also must have no late payments in the year leading up to applying for the loan.
  22. Can a friend co-sign my VA loan?

    Only spouses can co-sign on VA loans. However, other loans, such as conventional home loans and FHA loans, may allow a friend to co-sign.
  23. As a veteran, will my VA loan entitlement ever expire?

    Your entitlement never expires. However, your Certificate of Eligibility may need to be renewed if it is older than 12 months.
  24. How much can I borrow with a VA home loan?

    You may be able to borrow enough to cover 100% of your home purchase and could qualify for up to a $417,000 loan. In Alaska and Hawaii, the loan guarantee limit is $625,000. On a refinance you can borrow up to 90% of the appraised value of your home.
  25. May I use a VA loan to invest in real estate?

    A VA loan may only be used for a home that you intend to live in as your primary residence.
  26. Are VA loans provided by the U.S. government?

    The Department of Veterans Affairs does not actually loan the money for VA loans. It insures loans that VA-approved lenders provide, which allows borrowers to get loan amounts for 100% of the appraised value of a home.
  27. What is an adjustable-rate VA loan?

    An adjustable-rate loan starts off at a slightly lower interest rate than a fixed-rate loan. Most often it stays at this rate for three, five or seven years. After that, the interest rate changes every year to the current interest rate.
  28. What is a fixed-rate VA loan?

    A fixed-rate loan has an interest rate that stays the same. The interest rate at the time the loan is finalized is the interest rate for the life of the loan.
  29. Do I need a down payment with a VA loan?

    A VA loan covers 100% of the value of a home, so a down payment is not required. However, you have to pay any closing costs. But the seller can pay these closing costs for you up to an amount that equals 6% of the home's value. This usually is more than enough to cover closing costs, so you can move into a home with no money out of pocket.
  30. May I use a VA loan for a vacation home?

    No, a VA loan can only be for your primary residence.
  31. If I am on active duty, can I get a VA loan?

    Yes, if the home will be your permanent residence and you are within 60 days of moving in.
  32. My realtor has implied that VA appraisers do poor work. Is this true?

    No. VA appraisers protect buyers. VA loans are government-backed, so VA appraisers need to make sure homes meet government safety and quality guidelines

Tuesday, December 18, 2018

Kentucky First Time Home Buyer Programs for 2019

Here are action steps you can take right now to buy a home in Kentucky in 2019

1. Focus on your credit score on getting approved for a mortgage loan in Kentucky for 2019

FICO credit scores are among the most frequently used credit scores, and range from 350-800 (the higher, the better). A consumer with a credit score of 750 or higher is considered to have excellent credit, while a consumer with a credit score below 620 is considered to have poor credit.
To qualify for a mortgage and get a low mortgage rate, your credit score matters.
Each credit bureau collects information on your credit history and develops a credit score that lenders use to assess your riskiness as a borrower. If you find an error, you should report it to the credit bureau immediately so that it can be corrected.

2. Manage your debt-to-income ratio

Many lenders evaluate your debt-to-income ratio when making credit decisions, which could impact the interest rate you receive.

A debt-to-income ratio is your monthly debt payments as a percentage of your monthly income. Lenders focus on this ratio to determine whether you have enough excess cash to cover your living expenses plus your debt obligations.

Since a debt-to-income ratio has two components (debt and income), the best way to lower your debt-to-income ratio is to:

First Ratio – The first ratio, top ratio or housing ratio. Basically that means out of all the gross monthly income you make, that no more that X percent of it can go to your housing payment. The housing payment consists of Principle, Interest, Taxes and Insurance. Whether you escrow or not every one of these items are factored into your ratio. There are a lot of exceptions to how high you can go, but let’s just say that if your ratio is 33% or less, generally, across the board, you’re safe.

Second Ratio- The second ratio, bottom ratio or debt ratio includes the housing payment, but also adds all of the monthly debts that the borrower has. So, it includes housing payment as well as every other debt that a borrower may have. This would include, Auto loans, credit cards, student loans, personal loans, child support, alimony….basically any consistent outgoing debt that you’re paying on. Again, if you’re paying less than 45% of your gross monthly income to all of the debts, plus your proposed housing payment, then……generally, you’re safe. You can go a lot higher in this area, but there are a lot of caveats when increasing your back ratio.

3. Keep credit utilization low on your credit cards

Lenders also evaluate your credit card utilization, or your monthly credit card spending as a percentage of your credit limit.
Ideally, your credit utilization should be less than 30%. If you can keep it less than 10%, even better.
For example, if you have a $10,000 credit limit on your credit card and spent $3,000 this month, your credit utilization is 30%.
Here are some ways to manage your credit card utilization:
  • set up automatic balance alerts to monitor credit utilization
  • ask your lender to raise your credit limit (this may involve a hard credit pull so check with your lender first)
  • pay off your balance multiple times a month to reduce your credit utilization

4 . Look for down payment assistance in Kentucky

There are various types of down payment assistance, even if you have student loans.
Here are a few:
Kentucky Housing Down Payment Assistance of $6000
There are federal, state and local assistance programs as well so be on the look out.

If you want a personalized answer for your unique situation call, text, or email me or visit my website below:

Joel Lobb
Mortgage Loan Officer

Individual NMLS ID #57916

American Mortgage Solutions, Inc.
10602 Timberwood Circle 
Louisville, KY 40223
Company NMLS ID #1364

Text/call: 502-905-3708


Thursday, December 13, 2018

Kentucky VA Loan Limits 2019

Kentucky VA Loan Limits 2019
VA has announced they will be adopting the 1-unit 2019 FNMA and VA Kentucky County Loan Limits as listed in Bulletin 11:3:2018. Individual county loan limits can be found HERE.
  • Effective Friday December 14th, Fusion will be updated to allow Kentucky VA loans to be locked and underwritten using 2019 Loan Limits.
  • Kentucky VA loans underwritten using the new 2019 Loan Limits are not eligible to close and fund until Wednesday January 2nd.

Compare that to other loan options:
Loan TypeMinimum Down Payment Required
ConventionalTypically 3- 20%

Competitive Interest Rates

Due to the USDA guarantee, lenders are able to offer some of the lowest interest rates on the market. While actual rates will vary by lender due to other contributing factors, know that your credit profile and current market conditions play a vital role in your mortgage rate.

Low Monthly Mortgage Insurance

With a conventional loan, lenders require you to pay "private mortgage insurance" (PMI) if you don't come up with a 20 percent down payment. FHA loans also have high annual mortgage insurance fees.
USDA loans, on the other hand, don't have PMI. Instead the USDA uses two fees: an upfront guarantee fee that is paid once when you close on the loan, and an annual fee, which gets lumped into your monthly mortgage payment. The upfront fee is 1 percent of the total financed amount while the annual fee is 0.35 percent of the loan's current balance.
USDA loans have the lowest funding fee of all government-backed loan products.
Here's how USDA mortgage insurance compares on a $200,000 mortgage:
Loan TypePMI FeaturesMortgage Insurance RateEstimated Costs
USDABorrowers pay annual fee for the life of the loan.1% Upfront Funding Fee
0.35% Annual Fee
$2,000 Upfront
$58 per Month
FHABorrowers pay annual fee for the life of the loan.1.75% Upfront Funding Fee
0.85% Annual Fee
$3,500 Upfront
$139 per Month
VAFee varies based on nature of service, down payment and first-time use.2.15% Funding Fee for Most Purchase Loans$4,300 Upfront
ConventionalRate varies based on credit score and down payment amount.0.2 - 1.5% PMI$1,000 - $2,000 Annually
For conventional loans, PMI typically ends once the borrower's loan-to-value ratio reaches about 80 percent.
Borrowers with FHA and VA loans can lower their mortgage insurance costs by putting down at least 5 percent.

Flexible Credit Guidelines

Most conventional lenders look for a credit score of at least 660, however you'll need something closer to 720 to qualify for the lowest interest rates. Luckily, there is no minimum credit score for USDA loans, however you need a score of 640 or higher to qualify to use the USDA's automated underwriting system. Borrowers with lower credit scores can still qualify for USDA loans using manual underwriting.

Millions are Eligible

The vast majority of the United States falls within what the USDA considers an eligible, rural area. While the goal is to boost population in non-urban areas, the USDA's definition of rural areas casts a broad net. In fact, a "rural" area is defined as any area with a population of less than 35,000 people. That means that an estimated 97 percent of the country could qualify for a USDA loan.
Learn more about other property requirements for USDA loans.

Ability to Use if You Already Own a Home

While this benefit only applies in certain circumstances, it is possible to own additional property and apply for a USDA loan. The main thing to keep in mind is that the other property cannot be financed by a previous USDA loan.

Favorable Loan Terms

The USDA loan is available in common fixed-rate terms like 30-year and 15-year mortgages.

Comparing the Loan Types

According to the most recent USDA data, the average USDA mortgage in 2017 was $145,436. Let's take a closer look at the four major loan options with a real-world scenario. For a simple comparison, let's compare a $150,000 mortgage with an interest rate of 4.75 percent. We'll assume that you are making the minimum required down payment for each loan type and use a consistent estimate for monthly property taxes and homeowners insurance ($250).
Loan TypeMinimum Credit ScoreMinimum Down PaymentFunding FeePrincipal & InterestTaxes & InsuranceMortgage InsuranceMonthly Payment
VAno minimum score$0$3,225$799$250$0$1,049
As you can see, the two zero-down options have the lowest monthly payment given these parameters. But remember the second benefit from above; USDA loans typically offer some of the lowest interest rates on the market – meaning your specific situation could yield even more savings, depending on other compensating factors.
Credit score minimums will vary based on the lender, loan type and other factors. While FHA, USDA and VA loans allow for credit scores below the listed minimums, most lenders require at least a 620 score for any government-backed mortgage.
Note: In this example, we used:
  • Funding Fee:
    • USDA Loan = 1%
    • FHA Loan = 1.75%
    • VA Loan = 2.15%
    • Conventional loans do not have a funding fee
  • Private Mortgage Insurance:
    • USDA Loan = 0.35% Annual Rate
    • FHA Loan = 0.85% Annual Rate
    • VA loans do not have PMI.
    • Conventional = 1% Annual Rate
Kentucky VA Loan Limits 2019
VA has announced they will be adopting the 1-unit 2019 FNMA and VA Kentucky County Loan Limits as listed in Bulletin 11:3:2018. Individual county loan limits can be found HERE.
  • Effective Friday December 14th, Fusion will be updated to allow Kentucky VA loans to be locked and underwritten using 2019 Loan Limits.
  • Kentucky VA loans underwritten using the new 2019 Loan Limits are not eligible to close and fund until Wednesday January 2nd.

American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346

Text/call 502-905-3708

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#57916
-- 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.

Kentucky First Time Home Buyer Programs For Home Mortgage Loans: What kind of credit score do I need to qualify for...

Kentucky First Time Home Buyer Programs For Home Mortgage Loans: What kind of credit score do I need to qualify for...:   What kind of credit score do I need to qualify for a Kentucky Mortgage Loan in 2019? Credit scores play an important part in getting...

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