What is a debt to income ratio for a Kentucky Mortgage?

A debt to income ratio, commonly referred to as DTI, is the ratio of the amount of monthly expenses you have relative to your gross (before tax) income.

The automated underwriter will look at two ratios when analyzing your DTI: your front end DTI ratio and your back end DTI ratio.

Front End DTI

The front end DTI is the ratio of your new housing payment including taxes and insurance relative to the amount of income you earn. The front end DTI ratio excludes all other debts and simply analyzes your income relative to the payments on the new mortgage plus tax and insurance.

So, if your mortgage payments including tax and insurance are $1,000 and you earn $4,000 per month in gross income, your front end DTI would be 25% ($1,000 / $4,000 = 25%).

Generally, the automated underwriter likes to see front end DTI ratios below 40%, although it will approve higher front end DTI ratios with compensating factors like high credit scores, money in the bank, low loan to value ratio, etc.

Back End DTI

The back end DTI is the ratio of all of your expenses appearing on your credit report plus your new mortgage payment including taxes and insurance divided by your gross monthly income. The back end DTI ratio does not include things like utilities, health insurance or groceries. It is calculated using only the liabilities appearing on your credit report plus any child support or garnishments that may appear on your paystubs.

So, to continue our example from above, if your mortgage payments with tax and insurance are $1,000 per month, you have a $250 car payment, $250 in credit card payments and a gross income of $4,000, your back end DTI is 37.5% ($1,500 / $4,000 = 37.5%).

Generally the automated underwriter likes to see back end DTI ratios under 45%. However, it will approve loans with a 55% back end DTI or higher if there are compensating factors.

It is important to understand what a debt to income ratio is, however, you do not have to calculate it yourself. Your Loan Originator and your Processor will do this for you.

Louisville Kentucky Mortgage Loans

A debt to income ratio, commonly referred to as DTI, is the ratio of the amount of monthly expenses you have relative to your gross (before tax) income.

The automated underwriter will look at two ratios when analyzing your DTI: your front end DTI ratio and your back end DTI ratio.

Front End DTI

The front end DTI is the ratio of your new housing payment including taxes and insurance relative to the amount of income you earn.  The front end DTI ratio excludes all other debts and simply analyzes your income relative to the payments on the new mortgage plus tax and insurance.

So, if your mortgage payments including tax and insurance are $1,000 and you earn $4,000 per month in gross income, your front end DTI would be 25% ($1,000 / $4,000 = 25%).

Generally, the automated underwriter likes to see front end DTI ratios below 40%, although…

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VA Updated Guidance for Borrowers Affected Financially by COVID-19

VA Updated Guidance for Borrowers Affected Financially by COVID-19

Louisville Kentucky Mortgage Loans

VA Updated Guidance for Borrowers Affected Financially by COVID-19

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Here are all the $0 Mortgage options in Kentucky

Here are all the $0 Mortgage options in Kentucky

VA – available to veterans, surviving spouses and active military. • VA Mortgages are always $0 down.• FICO Score – 620 preferable.• Need DD214 (honorable discharge) and Certificate of Eligibility.• Seller can pay up to 4% of closing costs.

USDA: the location of the property determines the $0 Down.• Seller can pay 6% of closing costs. • Income Limitations – Any primary home.

. FHA $0 Down – one of my lenders offers FHA Down Payment Assistance by way of a 2nd Mortgage.• FICO Score 620. • Ideal for First Time Home Buyers. • 2 Mortgages: 1 for 96.5% and 2nd for 3.5%.• Largest loan size based on county: $356,362• Seller can pay closing costs up to 6% of price

Louisville Kentucky Mortgage Loans

Here are all the $0 Mortgage options in Kentucky

VA – available to veterans, surviving spouses and active military. • VA Mortgages are always $0 down.• FICO Score – 620 preferable.• Need DD214 (honorable discharge) and Certificate of Eligibility.• Seller can pay up to 4% of closing costs.

USDA: the location of the property determines the $0 Down.• Seller can pay 6% of closing costs. • Income Limitations – Any primary home.

. FHA $0 Down – one of my lenders offers FHA Down Payment Assistance by way of a 2nd Mortgage.• FICO Score 620. • Ideal for First Time Home Buyers. • 2 Mortgages: 1 for 96.5% and 2nd for 3.5%.• Largest loan size based on county: $356,362• Seller can pay closing costs up to 6% of price

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Kentucky Home Loan Program Requirements for FHA, VA, USDA and Conventional Mortgage loans.

USDA

Minimum credit score: 620
100% maximum LTV
Manual Underwrites
No maximum loan amount
USDA Streamlined, Streamlined-Assist, and Rate/Term refinances allowed

Kentucky First Time Home Buyer Loan Programs for FHA, VA, KHC and USDA Mortgage Loans in Kentucky

FHA

  • Minimum credit score
  • 580 AUS Approved
  • 580 Manual
  • Non-Credit Qualifying Streamline refinances allowed
  • Gift funds allowed for down payment and closing costs
  • Cash out 80% LTV

VA

  • Minimum credit score
  • 600AUS approved
  • 620 manual
  • Cash-out up to 90% LTV
  • Foreclosure/Short Sale/Bankruptcy <2 years allowed with AUS Approval

USDA

  • Minimum credit score:620
  • 100% maximum LTV
  • Manual Underwrites
  • No maximum loan amount
  • USDA Streamlined, Streamlined-Assist, and Rate/Term refinances allowed

CONVENTIONAL

  • Minimum credit score:620
  • Fannie Mae
  • Freddie Mac
  • Standard and High Balance
  • HomeReady
  • HomePossible

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FHA announces major changes in in Mortgagee Letter 2021-13

FHA announces major changes in in Mortgagee Letter 2021-13

Louisville Kentucky Mortgage Loans

FHA announces major changes in in Mortgagee Letter 2021-13. We can now calculate your student loan payments based on 0.5% of the balance or take a Income Based Repayment Plan! FHA Updates the rules on Student Loan monthly payments deferred or Income Based Repayment plan… (4) Calculation of Monthly Obligation For outstanding Student Loans, regardless of payment status, the Mortgagee must use: • the payment amount reported on the credit report or the actual documented payment, when the payment amount is above zero; or • 0.5 percent of the outstanding loan balance, when the monthly payment reported on the Borrower’s credit report is zero.

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BREAKING NEWS: KENTUCKY FHA & STUDENT LOANS

Starting August 16th 2021 a lot more clients will be able to qualify to buy the home of their dreams.(Possibility for immediate usage of the guideline)Finally FHA has came to their senses and lowered the guidelines on Student Loan payment calculations

Louisville Kentucky Mortgage Loans

BREAKING NEWS: FHA & STUDENT LOANS

Starting August 16th 2021 a lot more clients will be able to qualify to buy the home of their dreams.(Possibility for immediate usage of the guideline)Finally FHA has came to their senses and lowered the guidelines on Student Loan payment calculations

Check out this link for direct access to the guideline change : https://www.hud.gov/…/OCHCO/documents/2021-13hsgml.pdf* No More 1% of amount owed as payment automatically * If you are on income base repayment we can use that payment amount

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Kentucky Rural Housing USDA Guidelines

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Kentucky Rural Housing USDA Guidelines

KENTUCKY USDA HOME LOANS
Kentucky USDA Loans | Rural Housing Loans Kentucky
Kentucky USDA Loans | Rural Housing Loans Kentucky

USDA Home Loans in Kentucky?

Kentucky USDA Home Loans supplies 100% financing for a home purchase, or refinancing in a USDA designated area.

Many large metropolitan cities have suburban areas that qualify for the USDA mortgage program. Click Here for an interactive map of eligible areas in Kentucky here!

The KY USDA home loans are perfect for first time buyers for many reasons. They have low interest rates, absolutely no down payment, no mortgage insurance, flexible credit guidelines, and most of the closing costs can be worked into the overall amount of the loan.

Advantages of a USDA vs. FHA & Other Loans

The USDA Home Loan program offers many advantages that traditional mortgage programs simply do not offer. First of all, all USDA home loans come with low interest rates, 100% financing, and require zero down payment. In fact, the USDA home loan program is the only home loan program in the country, besides the military, that requires absolutely no money for the purchase of a home. Instead, these funds can be used to pay to furnish the home, closing costs, make home renovations.

USDA home loans also have very flexible credit guidelines compared to most traditional lenders, with non-traditional credit histories being accepted. FHA home loans require a minimum of 3.5% down payment and have relatively high monthly mortgage insurance premiums.

Kentucky USDA Income Eligibility

Because USDA home loans are designed for moderate, to low income families, there are income limit restrictions. To be eligible for a USDA loan, your adjusted annual household income cannot exceed 115% of the median average income for that area.

This means if your total household income is above the average median income for that area, you may not be able to qualify. However, there are special deductions in place, such as childcare expenses, caring for elderly family members, or children in college, that can help to reduce your overall annual income. The borrower’s total housing and other consumer credit payments should account for no more than 4% of the total income. Income limits vary by county. Check your county Kentucky income limits here!

USDA Credit Eligibility

While it is true that USDA home loan program offers some the most credit flexible guidelines available, you still will need to have a minimum credit score of 620 to 640 to qualify.

However, some lenders may accept a credit score of as low as 580, if you can prove that some of your debts were circumstantial, temporary in nature, or beyond your control.

You must also have any bankruptcies or foreclosures discharged in the last 3 years, no outstanding tax liens and no accounts that have gone to collections within the past 12 months.

Click to access faqs_loan_origination.pdf

Kentucky FHA Mortgage Loans Guidelines

Kentucky Rural Housing USDA Guidelines

 

KENTUCKY USDA HOME LOANS

Kentucky USDA Loans | Rural Housing Loans Kentucky Kentucky USDA Loans | Rural Housing Loans Kentucky

 

USDA Home Loans in Kentucky?

Kentucky USDA Home Loans supplies 100% financing for a home purchase, or refinancing in a USDA designated area.

 Many large metropolitan cities have suburban areas that qualify for the USDA mortgage program.  Click Here for an interactive map of eligible areas in Kentucky here!

 

The KY USDA home loans are perfect for first time buyers for many reasons. They have low interest rates, absolutely no down payment, no mortgage insurance, flexible credit guidelines, and most of the closing costs can be worked into the overall amount of the loan.

 

Advantages of a USDA vs. FHA & Other Loans

The USDA Home Loan program offers many advantages that traditional mortgage programs simply do not offer. First of all, all USDA home loans come…

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What is the minimum fico credit score required for a Mortgage Loan Approval in Kentucky?

Credit score requirements for Kentucky Mortgage Loan”

Louisville Kentucky Mortgage Loans

The minimum credit score requirement to get approved for a Kentucky Mortgage loan offered through FHA, USDA, Fannie Mae, VA and Kentucky Housing today is a 620 FICO score.

Fico, 2,4, 5 from Fico for Experian, Equifax, and Transunion. They throw out the high and low score. and take mid score.

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Expands VA Home Loan Eligibility for Certain National Guard Members in Kentucky

Expands VA Home Loan Eligibility for Certain National Guard Members in Kentucky

VA announced they are expanding eligibility for Kentucky VA home loan benefits for certain members of the Kentucky Army and Air National Guard to include current and former National Guard members, regardless of service dates, who meet the requirements outlined below effective for COE applications received on or after 01/05/2021.

Expands VA Home Loan Eligibility for Certain National Guard Members in Kentucky VA announced they are expanding eligibility for Kentucky VA home loan benefits for certain members of the Kentucky Army and Air National Guard to include current and former National Guard members, regardless of service dates, who meet the requirements outlined below effective for … Continue reading "Expands VA Home Loan Eligibility for Certain National Guard Members in Kentucky"

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