Showing posts with label va. Show all posts
Showing posts with label va. Show all posts

KENTUCKY VA MORTGAGE LENDER APPROVAL REQUIREMENTS

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Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Why Might You Consider A Kentucky VA Loan Over A K...

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: Why Might You Consider A Kentucky VA Loan Over A K...:   


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Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: KENTUCKY VA MORTGAGE LOAN INFORMATION

Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgages: KENTUCKY VA MORTGAGE LOAN INFORMATION:   COMMON KENTUCKY VA LOAN MYTHS FOR KENTUCKY VETERANS VA loans are difficult to qualify for. All VA loans require a down payment. VA loans r...

 COMMON KENTUCKY VA LOAN MYTHS FOR KENTUCKY VETERANS

  1. VA loans are difficult to qualify for.
  2. All VA loans require a down payment.
  3. VA loans require private mortgage insurance (PMI).
  4. You can't refinance a VA loan.
  5. You can only have one VA loan.
  6. You can use a VA loan once.
  7. VA loans are not assumable.
  8. You can't buy land with a VA loan.
  9. You can't build a house with a VA loan.
  10. VA loans only apply to the home purchase itself.

Is it hard to qualify for a VA loan?

Myth #1: Kentucky VA loans are difficult to qualify for.

Fact: VA loans have fewer credit restrictions compared to conventional loans. These reduced restrictions, like a higher debt-to-income (DTI) ratio and more leniency regarding credit scores, mean it can be easier to qualify. VA has no minimum credit score but lenders will have overlays with most being 620 and some going down to 580, with a few going all the way down to 500 but it is very difficult to get approved at this level --- though each individual case and lender will vary.

Do VA loans require a down payment?

Myth #2: All Kentucky VA loans require a down payment.

Fact: While conventional loans generally require down payment options that can reach up to 20%, no such thing is required with a VA home loan at or under the local conforming limit. Down payments are still an option, of course, but they are not a requirement.

The VA allows you to purchase jumbo loans, but the down payment depends on your entitlement:

  • Full entitlement - 100% LTV (loan-to-value) maximum
  • Partial entitlement - Maximum loan must be calculated using 25% guarantee of 1 unit county loan limit. Max LTV is lesser of max allowed or LTV required to meet 25% guaranty

Do VA loans have PMI?

Myth #3: VA loans require private mortgage insurance (PMI).

Fact: Private mortgage insurance is not required for VA loans. PMI typically adds 0.2%-0.9% of expenses to your monthly mortgage payments when you put less than 20% down. That’s a big additional expense you don’t have to worry about when you get a VA loan. Remember, VA loans do come with a funding fee.

Can you refinance a VA loan?

Myth #4: You can’t refinance a Kentucky VA loan.

Fact: Thanks to VA streamline and cash-out loan programs, VA loans are actually easier to refinance than conventional mortgages. The streamline version lowers the mortgage rate of an already existing VA loan, usually for less than the current principal and interest. This means it doesn't require a credit check or appraisal. The cash-out option involves a credit check and appraisal, since the home’s value represents the maximum loan amount and the new loan will be larger than the existing loan.

How many VA loans can you have?

Myth #5: You can only have one Kentucky VA loan.

Fact: There is no limit to the number of VA loans you can have. While it is possible to have multiple VA loans at once, this depends on VA loan entitlement. VA loan entitlement refers to the amount that the VA will pay your lender if you default on your loan. There is a limit on your VA entitlement. It can be split across multiple loans but the limit remains the same. For full entitlement, the VA covers:

  • Up to $36,000 for loans < $144,000
  • Up to 25% for loans > $144,000

If, however, you’ve used a portion of your entitlement in one loan that you’re still actively paying off (or defaulted on), the amount of entitlement you have on any new loan is reduced. This means that you may need to put money down yourself instead of having the usual benefit of a zero down payment for VA loans. To learn about VA loan limits and entitlement, visit us here.

How many times can you use a VA loan?

Myth #6: You can only use a Kentucky VA loan once.

Fact: There is no limit on the number of times you can use the VA loan benefit. You can use the benefit an unlimited number of times throughout your life, as long as you still qualify. To qualify, you need to meet certain requirements, which you’ll already be aware of if you’ve taken out a VA loan in the past. For those who haven’t taken out a VA loan prior, you can learn how to qualify here.

Are VA loans assumable?

Myth #7: Kentucky VA loans are not assumable.

Fact: Federally insured and guaranteed loans are usually assumable. This includes VA loans. What does it mean if a loan is assumable? An assumable mortgage is when the lender allows you, the buyer, to take over the current mortgage that the seller has. This can save a lot of money if the interest rates are lower on the existing mortgage than they would be to take out a new mortgage. Assumable mortgages allow buyers, who otherwise wouldn’t qualify for a VA loan, to take over a VA mortgage. This means that you would get most, if not all, of the benefits that come with VA loan eligibility. In order to assume a VA mortgage, you will need to meet certain requirements, such as:

  • acceptable credit history and  credit score
  • debt-to-income ratio to meet guidelines 
  • No Bankruptcies or foreclosures in last 2 years ( Chapter 7) --Chapter 13 is possible within one year in the plan.
  • acceptable work history for last two years
  • residual income requirements
  • property passing VA standards

You will also be required to pay the VA funding fee that comes with VA loans. This equates to 0.5% of the total loan amount. This may be waived if you’re an eligible military borrower who qualifies for an exemption. Other fees may be required as well.

For sellers, if a non-military borrower assumes your mortgage, your VA entitlement won’t be restored until the loan is paid in full. You will want to request that the lender releases you from liability on the loan to avoid dips in your credit reports if the buyer defaults or makes a late payment.

Can you buy land with a VA loan?

Myth #8: You can’t buy land with a Kentucky VA loan.

Fact: The VA doesn’t authorize buyers to singularly purchase land with a VA loan. However, you can purchase land and build a home on it. This is partially because VA loans are granted with a required occupancy period — you must use the property as your primary residence for at least one year. If there is already a home on the land, this is acceptable. Another acceptable scenario is if you plan to immediately build a home on the land after purchase. This may require a purchase/construction loan.

You can also purchase land with a conventional loan or certain other types of loans. Then you can build a home on the land using a VA construction loan. Upon completion, military borrowers can refinance VA construction loans into permanent VA loans. Builders must be VA-approved.

Finally, you can purchase land and build a property using a non-VA purchase/construction loan. Then you can refinance the loan upon completion of the build into a permanent VA loan (as long as the property meets the VA’s requirements).

Can you use a VA loan to build a house?

Myth #9: You can’t build a house with a Kentucky VA loan.

Fact: VA construction loans do exist, as mentioned above, and under the right circumstances, they can be refinanced into permanent VA loans. Ask your lender about VA purchase/construction loan options.

Can you use a VA loan for home improvement?

Myth #10: Kentucky VA loans only apply to the home purchase itself.

Fact: The VA allows for increases to purchase loans for the purpose of making renovations. The VA’s Energy Efficiency Mortgage program, for instance, lets borrowers add up to $6,000 to their home loan amount to install solar heating, insulation and storm windows, among other features.

In conclusion


Applicant subject to credit and underwriting approval. Not all applicants will be approved for financing. Receipt of application does not represent an approval for financing or interest rate guarantee does not guarantee the quality, accuracy, completeness or timelines of the information in this publication. While efforts are made to verify the information provided, the information should not be assumed to be error free. 


--

Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916

American Mortgage Solutions, Inc.

Text/call:      502-905-3708
fax:            502-327-9119
email:          kentuckyloan@gmail.com

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KENTUCKY VA MORTGAGE QUALIFYING GUIDELINES





 




Joel Lobb
Mortgage Loan Officer
Individual NMLS ID #57916

American Mortgage Solutions, Inc.

Text/call:      502-905-3708
fax:            502-327-9119
email:          kentuckyloan@gmail.com

 








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Kentucky VA Mortgage Refinance

Kentucky VA Mortgage Refinance Guidelines 


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


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.

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



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VA Guaranteed Loan What Is a VA Guaranteed Loan?

 VA Guaranteed  Loan What Is  a  VA Guaranteed Loan? 


A VA-guaranteed loan can be  used to: 
•  Buy a home as a  primary residence  (This  can be  either existing  or  new construction.)
 •  Refinance an existing loan Benefits  of  a  VA  Guaranteed Loan
 •  No down payment,  unless: o  It is  required by  the  lender 
•  The purchase price  is  more  than the  reasonable  value  of  the property 
•  No mortgage insurance
 • Reusable
 One-time VA funding  fee  (can be  included in  the loan) o  If you receive  VA  disability compensation,  you are  exempt  from  the  VA funding fee 
•  Minimum property requirements o  Ensure  the property  is safe,  sanitary  and sound 
•  VA staff  assistance if  you become  delinquent  on your loan
 •  Can be  assumed by  qualified persons
 •  Equal opportunity for all  qualified Veterans Who Is Eligible? In  general,  the  following  people  are  eligible:
 •  Veterans who meet service length requirements 
•  Service members on  active  duty  who  have  served a  minimum period 
•  Certain Reservists and National Guard members 
•  Certain surviving  spouses  of  deceased Veterans Apply  at  va.gov to  determine your eligibility  or call 877-827-3702 for more information. Key Underwriting Criteria 
•  There is  no  maximum debt  ratio.  However,  the  lender must  provide compensating factors if  the  total  debt ratio  is more  than 41  percent.
 •  There is  no  maximum loan amount.
   •  VA’s residual  income  guidelines  ensure  Veteran borrowers  can afford the  loan and determine how  much  money a  Veteran must  have  left  over after  all  debts  and living  expenses  are  considered. 
•  There is  no  minimum  credit score  requirement. Instead,  VA requires  a  lender to review the  entire loan profile. 

For more information,  see the complete VA credit guidelines  at www.benefits.va.gov/warms/pam26_7.asp. 

How Can You Start  the  Process? 

VA provides policy,  guidelines  and oversight  of  the  program.  Lenders  provide  financing for eligible  Veterans.    

The  guaranty  allows Veterans to  obtain a  without  down payments or  mortgage  insurance  premiums.  
 Veterans need to  obtain a  Certificate of  Eligibility  (COE) to  prove  entitlement.  You can obtain the  COE  online  through va.gov.  
 Lenders  also have  the  ability  to  request  the  COE on your  behalf. April 20 20 Updated 2You should  talk  to  several  lenders  to  find  the  one  that  fits  your  needs.  
They  should know the  VA  loan program. 

 They should also  offer  competitive  rates  and terms. Note:  The  VA appraisal  is  not  intended  to  be  an “inspection”  of  the  property. 

Before  committing to  a  purchase  agreement,  you should get  expert  advice. 

 Talk  to  a qualified residential  inspection service.

  You should also  have  radon testing  performed. 

Can VA  Help If  You’re Having Trouble  Making Payments? 

VA  loan technicians  may  be  able  to  help  you  retain your  home  and  avoid foreclosure. Call 877-827-3702 to  speak to  a  VA loan technician. 

 For more  information,  visit www.benefits.va.gov/homeloans/resources_payments.asp.


Uses for VA Home Loans?

VA Loans are intended to be used for the financing of a primary residences ONLY.
Occupancy by the spouse or dependent child satisfies the occupancy requirement if the
applicant is on active duty and not able to personally occupy the property.

Eligible Loan Purposes

• Purchase an existing or new construction single family detached home
• Purchase an existing or new construction condominium in a VA approved project
• Purchase an existing or new construction multi unit property (up to 4 units) ONLY if the applicant will be
occupying one of the properties
• Refinance an existing VA loan to lower the interest rate
• Refinance an existing mortgage or other debt secured by the property. The applicant must be occupying
the property.
• Cash out refinance to access the equity in a home occupied by the applicant.

In order to verify your credit history, your lender will obtain a credit report containing
information as reported by all 3 of the major credit bureaus: Trans Union, Equifax and
Experian.
Most people will have 3 credit scores but it is possible that you may have only 1 or
two scores if you have limited credit history.
This report will also include information on any public records such as bankruptcies,
judgments and tax liens.

Credit Scores
Credit Report

Though VA does not have a set minimum credit score requirements, lenders will have a minimum credit
score requirement.

General Credit Score Requirements

In addition to the credit scores, your actual credit history is also analyzed.
Collection account may need to be paid off in order to close your loan
It is preferable that the most recent 12 months show satisfactory payments and no other derogatory
information.
Credit History

If you experienced a major derogatory credit event, there will be waiting periods that will have to be
observed before you can be eligible to qualify for a loan.



Bankruptcy
Chapter 7
2 years from
discharge date

5 years from
discharge date

Bankruptcy
Chapter 13
Immediately after
discharge or
After 12 months of
payments***
5 years from
discharge date

Foreclosure*
2 years from
completion date

5 years from
completion date

Short Sale*
2 years from
completion date

5 years from
completion date

* If the foreclosure or short sale was on a VA loan, you may not have full entitlement available for the new loan
*** Must obtain written permission from the bankruptcy court/trustee and provide proof of satisfactory payment history
These

Income and Employment

Minimum History of Employment

A minimum of 2 year history in the same industry/line of work is required in most
instances but it’s not a universal rule.
Recent graduates can satisfy the two year requirement by providing proof of
schooling with a degree for the line of work you are now
employed in.
Active duty members do not need a two year history as
long as the minimum service requirement for eligibility
has been met.

Self employed borrowers must always have a two year history of self
employment and must show a two year history of filed tax returns to meet the
24 month requirement.

Income Calculations
If you are salaried, your base income will be used to qualify you for the loan.
However, if you are an hourly employee with varied hours, more than likely, your income will be averaged
over an extended period such as 18 or 24 months depending on the situation.
Overtime, bonuses, commission and part time employment must have a 24 history in order to be included
in the qualifying income. The income will be averaged out over 24 months. Verification of likelihood to
continue will also be required.
Non taxable income can be grossed up to account for the non-taxable status.


Debt to Income Ratios

A debt to income ratios is the percentage of your total debt obligation, including the new estimated
mortgage payment, all debts shown on your credit report, as well as alimony, child support etc, as
compared to your gross qualifying income.
EXAMPLE

The rule of thumb is that your debt to income ratio should not exceed 50% of the usable, gross monthly
income. However, higher percentages can be approved.
In addition to the debt to income ratio requirements, VA also has residual income requirements. VA residual
income looks at how much income is available after all monthly liabilities, including tax withholdings,
utilities and child care, are accounted for.

Residual Income By Region
For loan amounts of $80,000 and above
Family
Size

Northeast Midwest South West
1 $450 $441 $441 $491
2 $755 $738 $738 $823
3 $909 $889 $889 $990
4 $1025 $1033 $1033 $1117
5 $1062 $1039 $1039 $1158
over 5 Add $80 for each additional member up to a family of

seven
2400/5000= 48%

Deferred student loans
If student loan repayments are scheduled to
begin within 12 months of the date of loan
closing, the anticipated monthly payment will
be included.
If you are able to provide evidence that the
loan(s) will be deferred for a period outside
that time frame, the payment will not be
included.
Qualifying income: $5000
New mortgage payment: $2000
All other obligations: $400

Monthly debt payments
The payments shown on
your credit report will be
used to qualify you. If the
payments are incorrect,
you will be asked to
provide proof of the correct
payment.

Co-signed loans
If you co-signed for someone on a loan and
that loan is showing on your credit report, the
payment will be included in the ratios unless
you are able to provide evidence that the other
person on that loan has been making the
monthly payments from an account that you
are NOT a co-owner on.

Alimony/child support
You will be expected to
truthfully declare that
you pay alimony or child
support. You will be asked
to provide your divorce
decree and/or child support
order to verify the amounts.

Non-purchasing spouse
You should be aware that if you purchasing a home
in a community property state such as California
and are married, your spouse’s credit report will be
required. His/her debts will be included in the ratio
calculations even if he/she is not going to be on the
purchase or loan.


Documentation Checklist
The following is a general list of documentation required for a home loan application.

Not all items will apply to your situation

F DD214 if not active duty or Statement of service if active duty

EMPLOYMENT/INCOME

F Pay stubs (LES) for the most recent 30 days available
F W-2's for the previous two years
F Federal tax returns for the previous two years. All pages and schedules must be included
F If self-employed, provide all pages and schedules of last two years’ business tax returns and
corporate K-1's
F Award letter for Social Security benefits, disability or Pension
F Proof of receipt of child support, alimony or any other non-employment source of income

ASSETS

F Provide ALL pages of most recent 2 months’ statements for all accounts; including all checking, savings,
stocks, IRA, 401k, etc. The statements must show your name, account number and the name of the
banking institution. Any non-payroll deposits will have to be explained and documented.
F If funds to close will come from a gift, complete the gift letter (will be provided to you) and the following:
F From the donor - bank statements showing the funds in the donor's account and a copy of the check
from the donor's account
F From you - a copy of the deposit slip showing the gift check deposited into your account
F If funds to close are from sale of home
F Estimated closing statement showing anticipated proceeds
F Copy of final closing statement and deposit slip showing proceeds deposited into bank account

PROPERTY
F Select your insurance agent and provide agent's name, address, and phone number
F If refinance, or if you will be retaining your current home or own other property
F Current mortgage statement
F Copy of insurance declaration page
F If you’re currently renting, provide your Landlord’s name, phone number and address.
F 12 months canceled rent checks will be necessary
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