Tuesday, March 26, 2019

Kentucky VA Mortgage Refinance


Kentucky VA Mortgage Refinance Guidelines

  • At least 6 monthly payments must have been made on the original loan being refinanced; AND
  • The first payment due date of the new loan must be at least 210 days after the first payment due date of the original loan being refinanced
  • A copy of the Note from the previous loan being refinanced must be provided
  • An IRRRL refinancing a Fixed Rate Mortgage into another Fixed Rate Mortgage must result in a rate IRRL is also know as Interest Rate Reduction Loan in VA terms.
  • reduction of at least 0.5%
  • An IRRRL refinancing a Fixed Rate Mortgage into an Adjustable Rate Mortgage must result in a rate 
  • reduction of at least 2.0%
  • IRRRLs in which a Discount is being charged to the borrower will now require an Exterior-Only Appraisal to be ordered
  1. If the Discount being charged is 1% or less, the loan will be limited to 100% LTV based on the value of the Exterior-Only Appraisal
  2. If the Discount being charged is more than 1%, the loan will be limited to 90% LTV based on the value of the Exterior-Only Appraisal
  • Loan must current be guaranteed by VA and must be current
  • Closing costs must be recouped within 36 months
  • Proposed P&I payment must be less than current payment unless:
  1. Veteran refinancing ARM to Fixed
  2. Term of IRRRL is shorter than existing loan as long as payment does not increase over 20%
  3. Energy efficiency improvements are included in the IRRRL

Kentucky VA Mortgage Refinance Guidelines
VA Guaranteed by the Veterans Administration for qualified military veterans. No down payment if the property appraises for the sale price or greater. Credit underwriting is flexible. No Minimum credit score for VA loans, but lenders will create overlays to protect their selling ability to VA for delinquent mortgage loans sold to VA. A lot of VA lenders want a 620 credit score, with some going down to 580, and a few will do down below that but very difficult to get approved with a VA lender. No monthly mortgage insurance payments are required, however they're upfront funding fees that range anywhere from 2.1% to 3.3% based on previous use or first time use of VA eligibility to buy a home, or if you are disabled, you may have not to pay this at all.

Credit Requirements for a VA Mortgage Loan Approval in Kentucky






The VA Certificate of Eligibility will show if you have to pay a funding fee to VA or if you are exempt.

Kentucky VA Funding Fee for 2019 VA Mortgage Loans

Wednesday, March 20, 2019

Kentucky First Time Home Buyer Programs For Home Mortgage Loans: Latest FHA shift to mitigate risks may shut out so...

Kentucky First Time Home Buyer Programs For Home Mortgage Loans: Latest FHA shift to mitigate risks may shut out so...: Latest FHA shift to mitigate risks may shut out some homebuyers : Last week, the  Federal Housing Administration  took steps to mitigate...

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Thursday, March 14, 2019

Kentucky VA Mortgage Guidelines For Approval in 2019

Kentucky Mortgage VA Underwriting Changes for 2019

Kentucky VA Mortgage Lending Guidelines

Kentucky VA has just revised Chapter 4 - Credit Underwriting and Chapter 11 - Appraisal Requirements (now named Appraisal Reports) of their underwriting guidelines. These changes will take effect for all Kentucky VA loans beginning May 23rd, 2019. 

Major changes are as follows, but the documents have been revised throughout so it is recommended that everyone review them HERE.
  • Borrowers using rental income from a non-subject property to qualify need to document a minimum 2 year rental history and 3 months reserves PITI for each rental property (excluding property being vacated and turned into a rental). When no mortgage exists on a rental property, 3 months reserves must still be provided that cover taxes, insurance, HOA dues, and any other fees documented for the property. These reserves cannot come from equity, gift funds, or any loan proceeds.
  • Rental income from boarders can now be used as qualifying income provided
    • A 2 year history of tax returns can be provided showing boarder income generated by the property; AND
    • The use of the property for boarder rental cannot impair the residential nature of the property and cannot exceed 25% of the property's total floor area
  • Alimony, child support, and maintenance require at least 3 years continuance to be considered effective income.
  • For payment plans after a judgment, VA will generally require 12 months of timely payments before credit is considered reestablished. A shorter repayment history may be considered if it can be determined that the borrower addressed the judgment responsibly and began a repayment plan immediately after it was filed. If borrower has missed payments within the last 12 months, they will be ineligible for financing even if the debt is paid in full.
  • For voluntary short sales or deeds-in-lieu where the borrower was current on their payments at the time the property was surrendered, no minimum derogatory credit waiting period will be required.
  • VA's list of required Appraisal Report Contents has been updated and now includes specific photographs required on the appraisal (refer to VA Chapter 11: Topic 3: Appraisal Report Contents for full list).
  • VA Chapter 11: Topic 4: Gross Living Area has been added to provide direction in determining the Gross Living Area of the property.
  • Other sections have been updated to include guideline changes from previous VA Circulars.

Louisville Kentucky VA Mortgage Lender

Wednesday, March 6, 2019

Kentucky VA loans skyrocket in popularity for first-time homebuyers

VA loans skyrocket in popularity for Kentucky first-time homebuyers: Servicemembers are far more likely to opt for a Department of Veterans Affairs mortgage than any other type of loan when buying their first home, a new report from the Consumer Financial Protection Bureau shows. Here's a look at how much more popular VA loans have become for servicemembers in the last decade.







Servicemembers are far more likely to opt for a Department of Veterans Affairs mortgage than any other type of loan when buying their first home, a new report from the Consumer Financial Protection Bureau shows.
The CFPB report, the first of its kind, looks at mortgages for first-time homebuying servicemembers, shows that in 2007, servicemembers buying their first home used VA loans approximately 30% of the time. By 2016, that figure had risen to 78%, meaning more than three out of four servicemembers bought their first home using a VA loan.
Conversely, with servicemembers increasingly preferring VA loans, their share of conventional mortgages fell precipitously (as seen in the graph below).
Home loan share among Kentucky VA borrowers
(Image courtesy of the CFPB. Click to enlarge.)








“The greater share of VA loans among servicemembers was part of a larger shift away from conventional to government-guaranteed mortgages between 2006 and 2009 for both servicemembers and non-servicemembers,” the CFPB noted in its report.
According to the CFPB, conventional mortgages made up approximately 60% of all loans among first-time homebuying servicemembers in 2006 and 2007, but this share fell all the way to 13% by 2016.
As for why the shift has taken place, the CFPB said that the features of the VA loan, namely “allowing a purchase with no down payment and without mortgage insurance and providing stronger loan-servicing protections than many other mortgages,” make the loan far more attractive than other options among first-time buyers.
Beyond the frequency at which servicemembers are buying their first houses with a VA loan, the median loan amount on those loans is also rising.
According to the CFPB report, the median servicemember first-time homebuyer VA loan amount increased in nominal dollars from $156,000 in 2006 to $212,000 in 2016, which closely tracks with the median value of conventional home loans taken out by non-servicemembers during that same time.
Additionally, early delinquency rates (the share of loans 60 days or more delinquent within one year of origination) have fallen for both prime and non-prime first-time homebuyers using VA loans.
As the CFPB notes, among non-prime borrowers, VA loan delinquency rates for servicemembers peaked in 2007 at approximately 7% before falling to just over 3% in 2016.
Delinquency rates for prime borrowers using VA loans also fell from 2006 through 2016 as the market improved.
To read the CFPB’s full report, click here.


This report uses the term “servicemember” as those who are training for, serving in, or have previously served in the uniformed services, as defined in 10 U.S.C. § 101(a)(5).

2 “[N]early 90% of VA-backed loans are made with no down payment.” U.S. Department of Veterans Affairs (2018). Available at https://www.va.gov/housing-assistance/home-loans/.

3 These protections range from VA-provided loan counseling and assistance working with loan servicers, to VA’s authority to force a loan servicing transfer or servicing the loan in-house.

4 The funding fee ranges from 1.25 to 3.3 percent for home purchase loans, depending on veteran status, down-payment size, and first or subsequent use of VA loan benefits. The fee is waived for applicants with a service-connected disability. Other details on VA home loan benefits, costs, and eligibility requirements are available at https://www.va.gov/housing-assistance/home-loans/.



5 This report defines “first-time homebuyer” as individuals who open a new home loan anytime between 2006 and 2016, and do not have a prior home loan tradeline on their credit report as of the first quarter of 2006. This is stricter than the definition used by many first-time homebuyer assistance programs, which include anyone who has not owned a home in the previous three years.



6 These observations are based on Home Mortgage Disclosure Act (HMDA) data. “Data Point: 2017 Mortgage Market Activity and Trends”, Consumer Financial Protection Bureau (HMDA Report, 2018), Figure 2. Available at https://www.consumerfinance.gov/data-research/research-reports/cfpb-data-point-mortgage-market-activity-and-trends/.

Sunday, March 3, 2019

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