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Kentucky VA Home Loans offered by a Kentucky Veteran. I have successfully originated over 100 VA Kentucky Mortgages for fellow Kentucky Veterans and active duty personnel.$0 Down Home loans in KY. Free Credit Report and free pre-approvals. I can be reached by text or call at 502-905-3708, or kentuckyloan@gmail.com Not affiliated with VA Government Agency. NMLS #57916 Company NMLS #1738461 Former Army Tanker 19k
Kentucky VA Home Loan Approval Requirements with Collections on Credit Report
Kentucky VA Home Loans Credit Scores Requirements
- No down payment required for Kentucky VA Loans
- There are closing costs on all home purchases and refinances, however, on purchases, VA allows the home seller to give the home buyer up to a 4.0% sellers concession towards the home buyer’s closing costs. If the home buyer is short on closing costs or if the home seller is not willing to give a sellers concession, the Veteran can get a lender’s credit to cover part or all of the closing costs
- There is no monthly mortgage insurance premium on Kentucky VA Loans
- Here are VA Credit Requirements:
- VA does not have a mandatory minimum credit score requirement
- VA lets the lender to set the minimum credit score requirement. Most lenders will want a 620 credit score nowadays.
- VA does not have a maximum debt to income ratio requirement. If you loan pre-approval shows a refer eligible, the max debt to income ratios are usually limited to 41% for the new house payment and your current bills on the credit report of your gross income. For example, lets say you make $3000 a month, and you have $400 in monthly bills on the credit report. Then your max house payment would be $830.00
- 2 year waiting period to qualify for a VA mortgage loan after a Chapter 7 Bankruptcy, short sale, and recorded dates of foreclosure and/or deed in lieu of foreclosure
- If you have deferred student loans that are deferred for at least 12 or more months, it will be exempt from from debt to income ratio calculations
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VA Loans in Kentucky
10 facts about the Kentucky VA Home Loan program
1. No down payment, no mortgage insurance
These are perhaps the biggest advantages to a VA loan. You don’t need a down payment. None whatsoever. Most mortgage programs, such as FHA and conventional loans, require at least 3.5 percent to five percent down.That’s up to $12,500 on a $250,000 home purchase.
With a VA loan, you can buy immediately, rather than years of saving for a down payment. With a VA loan, you also avoid steep mortgage insurance fees. At 5 percent down, private mortgage insurance (PMI) costs $150 per month on a $250,000 home, according to PMI provider MGIC.
With a VA loan, this buyer could afford a home worth $30,000 more with the same monthly payment, simply be eliminating PMI. Using a VA loan saves you money upfront, and tremendously increases your buying power.
2. Use your benefit again and again
Your VA home loan benefit is not one-and-done. You can use it as many times as you want. Here’s how.
Assume you purchased a home with a VA loan. But now, you’ve outgrown the home and need something bigger. When you sell the home and pay off the VA loan completely, you can re-use your benefit to buy another home. Your entitlement is restored in full.
But that’s not the only way to re-use your benefit.
Eligible Veterans and Service persons can receive a one-time restoration when they pay off the VA loan, but keep the home. This scenario comes into play if you purchased the home long ago, and have paid off the loan. It also applies if you have refinanced the VA mortgage with a non-VA loan.
In these cases, you can keep the home, and enjoy the benefits of VA home buying one more time.
3. Your benefit never expires
Once you have earned eligibility for the VA home loan, it never goes away. Those who served 20, 30, even 50 years ago often wonder whether they can still buy a home today if they never used their benefit. If eligibility can be established, the answer is yes.
Eligibility is based on the length of time served, and the period in which you served. For instance, a U.S. Army Veteran with at least 90 days in service during the Vietnam era is likely eligible.
To check eligibility, first obtain your DD Form 214. With that document, a VA-approved lender can request your VA Certificate of Eligibility for you, or you can request it directly from VA’s eBenefits website. You may be eligible to buy a home using a VA home loan, even if you served long ago.
4. Surviving spouses may be eligible
More than 3,000 surviving spouses purchased a home with their fallen partner’s VA benefit in 2015. Un-remarried husbands and wives of Service-persons who were killed in action can buy a home with zero down payment and no mortgage insurance. Plus, the VA funding fee is waived.
There’s no way to repay the spouse of a fallen hero, but this benefit surely helps them move forward after tragedy.
5. VA Loan Rates Are Lower
According to loan software company Ellie Mae, VA loan rates are typically about 0.25% lower than those of conventional loans. The VA backs the mortgages, making them a lower risk for lenders. Those savings are passed on to Veterans.
Additionally, VA loans come with some of the lowest foreclosure rates of any loan type, further reducing risk for lenders. No surprise here, but Veterans and Service persons take home ownership seriously. These factors add up to lower rates and affordable payments for those who choose a VA loan.
6. VA loans are available from local lenders
The VA home loan is unlike most other VA benefits. This benefit is available from private companies, not the government itself. The Department of Veterans Affairs does not take applications, approve the loans, or issue funds. Private banks, credit unions, and mortgage companies do that.
The VA provides insurance to lenders. It’s officially called the VA guaranty. The VA assures the lender that it will be repaid if the Veteran can no longer make payments. In turn, lenders issue loans at superior terms. In short, a VA loan gives you the best of both worlds. You enjoy your benefit, but have the convenience and speed of working with your chosen lender.
7. Buy, refinance or tap into home equity
The VA home loan benefit is not just for buying homes. Sure, it provides unmatched home buying advantages, but you can also use it to refinance your existing mortgage, whether it’s a VA loan or not.
Homeowners with a VA loan can use the Interest Rate Reduction Refinancing Loan, or IRRRL, to easily drop their rate and payment without an appraisal, or even paystubs, W2s or bank statements. The VA streamline refinance, as it is commonly known, gives VA loan holders a faster, cheaper way to access lower refinance rates when rates fall.
Even homeowners without a VA loan can use a VA refinance. The VA cash-out loan is available to eligible Veterans who don’t have a VA loan currently. As its name suggests, a VA cash-out refinance can be used to turn your home’s equity into cash. You simply take out a bigger loan than what you currently owe. The difference is issued to you at closing.
The VA cash-out loan amount can be up to 100 percent of your home’s value in many cases. Use the proceeds for any purpose – home improvements, college tuition, or even a new car.Many homeowners today are dropping their rate and taking cash out simultaneously, accomplishing two goals at once.
But you don’t have to take out cash to use this VA loan option. You can also use it to pay off a non-VA loan. Eligible homeowners who pay mortgage insurance or are dealing with other undesirable loan characteristics should look into refinancing with a VA loan. It can eliminate PMI, get you into a stable fixed-rate loan, pay off a second mortgage, or simply reduce your rate to make homeownership more affordable.
8. Lenient guidelines for lower credit scores, bankruptcy, foreclosure
Unlike many loan programs, a lower credit score, bankruptcy or foreclosure does not disqualify you from a VA home loan.
Shop around at various lenders, because each will have its own stance on past credit issues. However, VA guidelines do not state a minimum credit score to qualify. This gives lenders leniency to approve loans with lower scores. In addition, VA considers your credit re-established when you have established two years of clean credit following a foreclosure or bankruptcy.
Many homeowners across the U.S., military and civilian, experience bankruptcies and foreclosures due to a loss of income, medical emergency or unforeseen event. Fortunately, these financial setbacks don’t permanently bar VA-eligible home buyers from ever owning again.
The exception, though, is a foreclosure involving a VA home loan. In this case, you may need to pay back the amount owed on the foreclosed VA loan to regain eligibility. But for most home buyers with past credit issues, a VA home loan could be their ticket to home ownership.
9. Funding fee waivers
VA typically charges a funding fee to defray the cost of the program and make home buying sustainable for future Veterans. The fee is between 0.50 percent and 3.3 percent of the loan amount, depending on service history and the loan type.
However, not everyone pays the VA funding fee. Disabled Veterans who are receiving compensation for a service-connected disability are exempt. Likewise, Veterans who are eligible for disability compensation, but are receiving retirement or active duty pay instead, are also exempt from the fee.
10. Buy a condo with a VA loan
You can buy many types of properties with a VA loan, including a single-family (free-standing) home, a home of up to four units, and even manufactured homes. But condominiums are commonly overlooked by VA home buyers.
Condominiums are ideal starter homes. Their price point is often lower than that of single-family homes. And, condos are often the only affordable option in many cities.
The VA maintains a list of approved condominium communities. Veterans can search by city, state, or even condominium name on VA’s condo search tool. It’s not a short list.
As a Veteran or Service-member, consider the array of home types when shopping for a home.
Kentucky VA Mortgage Checklist Documents for Approval
Required for all Borrowers
Pre-Approval Required Documents W-2’s (2 years)
Drivers License
Tax Returns (2 years)
Bank Statements (2 months- all accounts)
Employed Borrowers (with a W-2) Paystubs (totally one month) Retirement Statement (most recent)
*SSI Disability Requirement - SSI Reward Letter
Self-Employed Borrowers
(1099/Schedule C/Schedule S, etc.)
Tax Returns (2 years; Personal and business with statements and schedules)
Retirement Statement (most recent)
*SSI Disability Requirement - SSI Reward Letter
Veteran (VA) Borrowers
Pension Reward letter
Social Security Reward Letter Social Security Card
Retired Borrowers
Social Security Reward Letter & 1099 2 years W-2’s (where applicable) Social Security Card
Retirement Statement (most recent 2 months)
Social Security Income Borrower
VA Benefits Award Letter Social Security Card
Retirement Statement (most recent 2 months)
Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky VA Mortgage Loan Information
Louisville Kentucky Mortgage Lender for FHA, VA, KHC, USDA and Rural Housing Kentucky Mortgage: Kentucky VA Mortgage Loan Information: Kentucky VA Mortgage Loans What are VA Home Loans? VA Loans provide military veterans and current service members a distinct advan...
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
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