Category: seller paid closing costs

National Association of Realtors (NAR) recently reached a settlement that impacted real estate commissions for different mortgage loan types in Kentucky


On March 15th, 2024, the National Association of Realtors (NAR) agreed to pay $418 million in damages to settle some of their real estate commission lawsuits. The settlement prohibits NAR from requiring a seller’s agent to engage in cooperative compensation with a buyer’s agent.

The key details are:

  • Date: March 15th, 2024
  • Payment: NAR agreed to pay $418 million in damages
  • Settlement terms: NAR prohibited from requiring seller’s agent to cooperate with buyer’s agent on commissions

This settlement is significant because the new terms will likely have ripple effects that both consumers and industry stakeholders will experience:

Consumers:

  • Potentially lower real estate commission fees as a result of increased competition between agents
  • More flexibility and control for sellers in how they compensate buyer’s agents
  • Possibility of buyers having to pay their agent’s fees directly rather than them being bundled into the home price

Industry Stakeholders:

  • Real estate brokerages and agents may need to adjust their business models and commission structures
  • Reduced influence of NAR in setting industry standards and practices around commissions
  • Potential for new business models and pricing approaches to emerge in the real estate market

Overall, this settlement represents a shift in the power dynamics of the real estate industry that could lead to more competition and consumer-friendly changes in the way real estate transactions are conducted. Let me know if you have any other questions!

 Real Estate Commissions and Loan Types in Kentucky

The National Association of Realtors (NAR) recently reached a settlement that impacted real estate commissions for different mortgage loan types in Kentucky and across the United States. Here’s a breakdown of how commissions can vary:

Conventional Loans

  • For conventional mortgage loans, the typical real estate commission is 3-6% of the home’s sale price.
  • This commission is usually split evenly between the buyer’s agent and the seller’s agent.
  • Buyer may pay their Agent’s reasonable commissions or have the seller or agent contribute to the commission of the buyer agents’ commission.  Typical fees paid by the seller are not subject to the IPC limits.  (interested party contribution)

FHA Loans

  • For FHA (Federal Housing Administration) loans, the real estate commission is typically slightly lower, around 3-6% of the sale price.
  • This lower commission is due to the additional requirements and paperwork involved with FHA loans.
  • FHA Loans-FHA allows buyer to pay commissions of their agents, or negotiate the seller’s or agent contribution to commission to the buyer’s agent. – If the State and Local law or custom permits this, and if the commissions and fees are reasonable in amount, the existing policy would not treat it as an IPC. (interested party contribution)

VA Loans

  • For VA (Veterans Affairs) loans, the real estate commission is usually the lowest, around 3-6% of the sale price.
  • VA loans have strict guidelines, and the lower commission helps offset some of the additional costs associated with these loans.
  • VA Loans-Buyer may pay their agent’s commission or negotiate the seller or  agents contribution to commission to the buyer’s agent.  (interested party contribution) IPC is not mentioned. A temporary variance is permitted for the Veteran buyer to pay Buyer Broker Fees.

USDA Loans

  • USDA (United States Department of Agriculture) loans, which are designed for low-income homebuyers in rural areas, also typically have a real estate commission of 3-6%.
  • The lower commission helps make these loans more affordable for the homebuyers.
  • USDA loans-Buyer may pay their agents commission or negotiate the seller’s or agent’s contribute to the commission of the buyer’s agent. Real Estate Commission Fees are excluded from the 6% cap for IPC concessions

—How the NAR Settlement Is Changing Kentuckyconcessions,commissions,NAR Settlement,National Association of Realtors (NAR),fha loan,usda loan,seller paid buy down,va loan,real estate agents, seller concessions, buyers agent, interested party contributions Homebuyers Options for Mortgage Loan Approval

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Reach out to me anytime on my cell —  Always happy to help!

 

Joel Lobb  Mortgage Loan Officer NMLS 57916

EVO Mortgage
911 Barret Ave, Louisville, KY 40204
Company NMLS ID # 173846

Text/call: 502-905-3708

email: kentuckyloan@gmail.com
http://www.mylouisvillekentuckymortgage.com/

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Joel Lobb  Mortgage Loan Officer NMLS 57916

EVO Mortgage
911 Barret Ave, Louisville, KY 40204
Company NMLS ID # 173846

Text/call: 502-905-3708

email: kentuckyloan@gmail.com
http://www.mylouisvillekentuckymortgage.com/

NMLS 57916  | Company NMLS #173846
The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
NMLS ID# 57916, (www.nmlsconsumeraccess.org).

Kentucky Rural Housing USDA Buydown Program


2-1 and 1-0 buydowns for Kentucky Rural Housing USDA RD loans Interest Rates.  
What are Buydowns for Kentucky USDA RD Loans?

The Kentucky Rural Housing USDA Buydown Program provides simple financing options that lowers the interest rate on a mortgage for either 1 year (1-0) or 2 years (2-1), before it rises to the regular permanent rate. Specifics2-1, and 1-0 temporary interest rate buydowns are allowed on 30 year fixed-rate mortgages for principal residences, purchase only. Not permitted on refinance transactions.The seller or agent may provide funds for the temporary interest rate buydown, subject to standard interested party contribution limits.Lender paid buydowns are not offered.The borrower is qualified at the note rate fully amortized (not the buydown rate)Minimum credit score for loans with buydown is 620 
2-1 and 1-0 buydowns for USDA RD loans. What are Buydowns for USDA RD Loans? The USDA Buydown Program at Kind Lending provides simple financing options that lowers the interest rate on a mortgage for either 1 year (1-0) or 2 years (2-1), before it rises to the regular permanent rate. Specifics 2-1, and 1-0 temporary interest rate buydowns are allowed on 30 year fixed-rate mortgages for principal residences, purchase only. Not permitted on refinance transactions. The seller or agent may provide funds for the temporary interest rate buydown, subject to standard interested party contribution limits. Lender paid buydowns are not offered. The borrower is qualified at the note rate fully amortized (not the buydown rate) Minimum credit score for loans with buydown is 640

Have Questions or Need Expert Advice? Text, email, or call me 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
fax: 502-327-9119
email: kentuckyloan@gmail.com

http://www.mylouisvillekentuckymortgage.com/

The view and opinions stated on this website belong solely to the authors, and are intended for informational purposes only. The posted information does not guarantee approval, nor does it comprise full underwriting guidelines. This does not represent being part of a government agency. The views expressed on this post are mine and do not necessarily reflect the view of my employer. Not all products or services mentioned on this site may fit all people.
NMLS ID# 57916, (www.nmlsconsumeraccess.org).

Rural Housing Requirements For USDA Loans In Kentucky


Kentucky Rural  Housing Loans

 

Kentucky USDA loans are mortgages made by lenders and guaranteed by the U.S. Department of Agriculture. They are available to moderate- and low-income borrowers to build, rehabilitate, improve or relocate a primary residence in eligible rural and suburban areas. The income limit is 115 percent of the median income in your area. You can check the income limits for your area here.

 

It can be closed with zero down. USDA loans do have a monthly insurance requirement, but the upfront fee is significantly lower than on the VA loan and the mortgage premiums are lower than on the FHA loan.

The problem is that the number of buyers who qualify for a USDA loan is much smaller. Unlike on other loans where more income is better, a USDA loan has strict income maximums.

Fees for Kentucky USDA Loans

USDA loan borrowers pay an upfront fee of 1 percent of the loan amount, and this fee can be added to the loan balance. Borrowers also pay a mortgage insurance premium of 0.35 percent of the loan balance per year in 12 equal installments. This fee is based on the current balance and added to the monthly payment.

 

Down Payment Requirements for Kentucky USDA Loans

 

USDA loans are available with up to 100 percent financing (zero down).

 

Credit Score Required for Kentucky Rural Housing Loans

 

There is no minimum credit score for a USDA loan, but you are automatically ineligible if you are presently delinquent on a nontax federal debt.

Automated approval is available if you have two tradelines reported on your credit history and acredit score of 640 or higher.

If you do not have sufficient credit data, the underwriter can assess your creditworthiness other ways, such as by examining your history with rent payments. Applicants with a credit score lower than 640 will undergo additional underwriting steps.

 

Loan Limits for Kentucky USDA Loans

 

They are no loan limits for Kentucky USDA loans backed-up the guarantee loan program. The Direct USDA loan program does have loan limits.

Why Would a Seller Agree to a Seller Credit? Seller Benefits: ~ Seller credits help a home sell faster in buyer markets. Price Reductions are costlier to a seller than credits. ~ Innovative “Good Will” to support a new homeowner adjusting to homeownership. When the housing market turns into a buyer’s market, selling a home can be quite competitive. The seller is no longer expecting to receive 100% or more of their asking price and instead expects to take less than their asking price to sell their property. Therefore, they may offer a credit to attract more people to buy their home. After all, the seller is only concerned about selling their home at a reasonable price and selling it as quickly as possible. Seller credits and concessions are a very popular tactic to give the perception that buying their home is better. Seller credits work because many first-time buyers struggle to come up with the down payment and closing costs, and seller credits ease that burden. Buyer Benefits: ~ Allows the buyer to ease into homeownership by paying below fixed-rate payments. ~ Does not increase the loan amount. The loan amount amortizes as a standard fixed-rate loan. ~ Safe way to take advantage of a lower payment in a rising rate environment. A Seller Credit Can: = Offset closing costs = Permanentlv Reduce an interest rate = Temporarily Reduce an interest rate In all three scenarios, this helps your buyers. Each buyer has different needs, so it is up to you to help them In all three scenarios, this helps your buyers. Each buyer has different needs, so it is up to you to help them figure out how to best apply a seller credit.



 
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


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