Tag: debt to income ratios

Featured Post

Kentucky USDA Housing Loans: 100% Financing Options


Kentucky Mortgage — Joel Lobb NMLS #57916

Kentucky USDA Rural Housing Loan

100% financing  ·  No down payment  ·  Fixed 30-year rate

0%
Down payment required
100%
Financing available
620+
Typical credit score

Key benefits — click to expand

No down payment

Click to learn more ›

Borrowers without savings — or who wish to keep their savings — can qualify. Closing costs may also be financed if the appraised value exceeds the purchase price.

Low mortgage insurance

Click to learn more ›

USDA has the lowest upfront and monthly mortgage insurance of any 100% loan program — keeping your monthly payment as low as possible on a 30-year fixed rate.

Flexible credit guidelines

Click to learn more ›

No minimum credit score is set by USDA, though lenders typically require 620–640. Borrowers with a 640+ score enjoy streamlined processing with no credit explanation letters needed.

Generous income limits

Click to learn more ›

Income limits are based on 115% of the U.S. median. Deductions apply for dependents, child-care expenses, and elderly households — making it easier for Kentucky families to qualify.

Not just first-time buyers

Click to learn more ›

Any qualified buyer may use a USDA loan — not only first-time homebuyers. Sellers are also permitted to pay the buyer’s closing costs, further reducing out-of-pocket expenses.

Rural areas across Kentucky

Click to learn more ›

Eligible areas include open country and towns with a population of 10,000 or less. Many Kentucky communities outside major metros qualify — check eligibility at the USDA website.

Debt-to-income ratio guidelines

Housing (PITI)
≤ 29%
Total debt
≤ 41%

Buyers with satisfactory credit may qualify with higher ratios in high-cost areas.

Basic eligibility requirements

U.S. citizen or permanent resident
Adequate and dependable income
Property in USDA-eligible rural area
Household income within area limit
Single-family home (no manufactured)
Reasonable credit history

Ready to check your USDA eligibility?

Free application  ·  Same-day approvals  ·  502-905-3708

Get started →

Joel Lobb  ·  Mortgage Loan Officer  ·  NMLS #57916  ·  Company NMLS #1738461
Equal Housing Lender  ·  Kentucky mortgage loans only
This page is not endorsed by USDA, FHA, VA, or any government agency.

DTI) ratio requirements for different types of mortgage loans in Kentucky, including FHA, VA, USDA, Fannie Mae, and Kentucky Housing loans


Debt-to-Income (DTI) ratio requirements for ​Kentucky FHA, VA, USDA, and conventional mortgage loans

Kentucky Rural Housing USDA Loan Student Loan Debt Calculations


How to Qualify for a Rural Housing Loan in Kentucky with Student Loans.

For potential home buyers with student loans that are either in a deferred payment status or being paid back through an income based or graduated repayment program, the treatment of this liability needs to be considered.

When student loan debts are not currently being paid upon, due to the loan applicant still being in school or recently graduating from school, the monthly liability will be calculated based on the lower of 1/2 of 1% of the outstanding loan balance or the monthly payment listed on the credit report.

Example if you owe $100,000 in student loan debt the monthly payment will be $500. Also, if the student loan is being paid upon, but at a lesser amount than originally agreed, such as the payment being determined based on repayment ability (i.e. Income Based Repayment Plan), the monthly payment will be calculated the same as above (monthly liability = 1/2 of 1% of the outstanding loan balance).

This offers a significant improvement compared to the FHA Loan guidelines, in which student loans that are in deferment or under an income based repayment plan will have the monthly payment calculated at 1% of the outstanding loan balance.

If the student loan is being paid upon as originally agreed upon when the loan was first obtained, the monthly liability will be the amount specified on the credit report.

Or if the student loans have been consolidated into a new loan, so long as the monthly payment is based on a fixed repayment schedule, that payment will be used when calculating the borrower’s debt to income ratio.

If you have yet to apply for your Kentucky USDA Loan pre-qualification request, you can do so online

 
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
 

 

 
 
 
Posted by Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA 
Kentucky Debt To Income Ratios for FHA, VA, USDA
https://kentuckyusdaloan.com/2018/10/18/debt-to-income-ratio-for-kentucky-mortgage-loans/

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 difference between a front-end and a back-end debt-to-income ratio for a Kentucky Mortgage Loan FHA, VA, KHC, USDA, Fannie Mae


What is your debt-to-income ratio?

 
Commonly referred to as your “DTI,” your debt-to-income ratio is a personal finance benchmark that relates your monthly debt payments to your monthly gross income.
As an example… Let’s say that your gross monthly salary is $5,000 and you are spending $2,800 of it toward monthly debt payments. In that case, your DTI would be an unhealthy 56%.
This version of your DTI is sometimes referred to as your “back-end” DTI. This is often broken down further to give a front-end debt-to-income ratio, which is a component of your back-end DTI.
 

How to calculate your front-end DTI for a Kentucky Mortgage Loan Approval

 
Your front-end DTI is calculated by dividing your monthly housing costs by your monthly gross income. Front-end DTI for renters is simply the amount paid in rent, whereas for homeowners it is the sum of mortgage principal, interest, property taxes, and home insurance (i.e., your PITI) divided by gross monthly income.
From above, if that $2,800 in debt payments is attributable to $1,500 in housing costs and $1,300 in non-housing costs, then your front-end DTI is $1,500/$5,000 = 30% (and your back-end ratio is still 56%, as calculated above).
 

How lenders use your DTI for a Kentucky Mortgage Loan Approval

 
Kentucky Mortgage lenders typically use DTI (along with other variables) to determine whether or not you qualify for a loan, and to help determine your Kentucky mortgage rate. A high front-end DTI raises red flags with lenders because it is commonly associated with borrower default. In fact, reducing front-end DTI to reduce the risk of homeowner default was one of the main objectives of the loan modification programs introduced by the government in 2009.
There are specific limits for DTI that are used as cut-off points when evaluating borrowers. Current DTI limits for conventional conforming mortgage loans are typically 28% on the front end and 36% on the back end, though these limits are slightly higher for government subsidized Kentucky FHA loans.
While there are certainly other factors to consider w
 
 
 
 
 
 
 
 
 
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
Louisville, KY 40223
Company ID #1364 | MB73346
 

Text/call 502-905-3708
kentuckyloan@gmail.com
 
 
 
http://www.nmlsconsumeraccess.org/
 
If you are an individual with disabilities who needs accommodation, or you are having difficulty using our website to apply for a loan, please contact us at 502-905-3708.

Disclaimer: No statement on this site is a commitment to make a loan. Loans are subject to borrower qualifications, including income, property evaluation, sufficient equity in the home to meet Loan-to-Value requirements, and final credit approval. Approvals are subject to underwriting guidelines, interest rates, and program guidelines and are subject to change without notice based on applicant’s eligibility and market conditions. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant  Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/
— Some products and services may not be available in all states. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice. The content in this marketing advertisement has not been approved, reviewed, sponsored or endorsed by any department or government agency. Rates are subject to change and are subject to borrower(s) qualification.
 
Posted by Joel Lobb, Mortgage Broker FHA, VA, KHC, USDA