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Louisville Kentucky Mortgage Lender

Louisville Kentucky Mortgage Lender

By Joel Lobb | Mortgage Broker
or Lender in Louisville, KY
  • Federal Government shutdown and their effect on FHA, VA, USDA loans in Kentucky

    Posted Under: Home Buying in Lexington, Financing in Lexington, Credit Score in Lexington  |  October 1, 2013 12:40 PM  |  418 views  |  No comments
    Federal Government shutdown and their effect on FHA, VA, USDA loans in Kentucky 

    This morning at 12:00am the Federal Government was shut down.

     The following is what we know, so far, about what the impact will be to our loan production efforts. 

    FHA- While the FHA offices are open with a reduced staff, the automated systems are 
    currently up and running. We should be able to obtain case numbers and perform other 
    functions that require the FHA Connection website. 

    VA- VA has notified lenders that they will be operating at full staff and as usual to serve 
    our Veterans.

    USDA- USDA offices are closed during the shutdown. No conditional commitments can 
    be obtained and Crescent cannot close loans without an executed conditional 
    commitment from USDA. Also note that GUS is not available during the shutdown and 
    we will be unable to make corrections in the automated system.

    IRS – The IRS offices are also closed. We will submit 4506T requests to our vendor as 
    normal to be delivered to the IRS when as they reopen. 

    Your business is very important to us and we will work to provide you with updated 
    information when it becomes available. 

    Joel Lobb (NMLS#57916)
    Senior  Loan Officer
    502-905-3708 cell
    502-813-2795 fax

    Key Financial Mortgage Co. (NMLS #1800)*
    107 South Hurstbourne Parkway*

    Louisville, KY 40222*

  • New lower minimum credit score requirements for our Kentucky Conforming Government and USDA programs

    Posted Under: Home Buying in Lexington, Financing in Lexington, Home Ownership in Lexington  |  July 15, 2013 3:59 PM  |  418 views  |  1 comment

     New Credit Score Requirements for Kentucky VA, FHA, USDA Mortgage Loans

    We are pleased to announce lower minimum credit score requirements for our Conforming Government and USDA programs for Kentucky Mortgage Holders and Homebuyers. !

    Lower FICO minimum's are:
    • FHA - Minimum 580 for all Conforming Full Documentation Transactions
    • FHA - Minimum 620 for all Conforming Streamline Transactions
    • VA - Minimum 600 for all Conforming Full Documentation and IRRRL Transactions
    • USDA - Minimum 620 for Full Documentation
    • USDA - Minimum 600 for Streamline/Super Streamline Transactions

    • New FICO requirements are effective for new locks on or after Monday, July 8, 2013
    Joel Lobb (NMLS#57916)
    Senior  Loan Officer
    502-905-3708 cell
    502-813-2795 fax

    Key Financial Mortgage Co. (NMLS #1800)*
    107 South Hurstbourne Parkway*

    Louisville, KY 40222*

  • Ky FHA Guidelines for mortgagee and Bankruptcy Foreclosures

    Posted Under: Home Buying in Lexington, Financing in Lexington, Credit Score in Lexington  |  June 14, 2013 1:32 PM  |  518 views  |  1 comment

    Kentucky FHA Guidelines

    Learn More

    Below, you will find a guide to the “standard” Kentucky  FHA loanguidelines used in the underwriting process of an Kentucky FHA mortgage.

    • Traditional Guidelines:
      • Neither the lack of traditional credit history, nor the lifestyle of the borrower may be used as a basis for rejection.
      • Collections: Based upon the surrounding circumstances, and as determined by our underwriter, these do not necessarily have to be paid.
      • Judgment: Judgments are required to be paid off before the mortgage loan is eligible for insurance. However, exceptions can be made if the borrower has been making regular timely documented payments and the creditor is willing to subordinate the judgment to the insured mortgage.
      • Foreclosure: A borrower whose previous residence or other real property was foreclosed on, or who has given a deed-in-lieu of foreclosure within the previous three years is not generally eligible. Exceptions can be made based upon extenuating documented circumstances.
      • Chapter 7 Bankruptcy: Will not disqualify a borrower if at least two years have passed since the bankruptcy was discharged.
      • Chapter 13 Bankruptcy: A borrower paying off debt under Chapter 13 may also qualify if at least one year of the pay out period has elapsed with satisfactory payment performance and the court approves the borrower entering into a mortgage transaction.
    • Aliens: Kentucky FHA  will insure mortgages made to lawful permanent resident aliens under the same terms and conditions as a US citizen.
    • No Income Restrictions.
    • Higher Ratios: KEntucky HUD’s standard ratio guidelines are 29% (maximum exception of 36%) of your gross income for housing and 41% (maximum exception of 50%) of your gross income for housing plus other creditors. Borrowers may, at the underwriter’s discretion, be allowed to extend beyond these ratios based upon sufficient compensating factors.
    • Down Payment: The minimum down payment is approximately 3.5%. While credit quality can affect this qualifying requirement, the typical borrower only needs the standard HUD guideline of 3.5% to be approved.
    • Gifts: 100% gift funds are acceptable. The donor may be a relative of the borrower, the employer or labor union, a governmental agency, a not for profit private organization, or close friend with a clearly defined interest in the borrower. No repayment of any gift may be expected or implied. Sellers are allowed to pay all closing costs on behalf of the borrower, up to 6% of the purchase price.
    • Reserves: There are no reserve requirements for one and two-family unit residences. Three months reserves are required for three and four-family unit residences.
    • Multifamily: Three and four family unit residences, regardless of occupancy status, must be self-sufficient. The maximum mortgage is limited so that the ratio of the mortgage payment, divided by the monthly net rental income does not exceed 100%. The net rental income is the appraiser’s estimate of fair market rent from all units (including the unit chosen by the borrower for occupancy), less the allowance for vacancies and maintenance (which is 15%). 85% of the rental income that is expected from the non-occupied units is added to the borrower’s income for qualifying purposes. Down payment is calculated the same as single-family units.
    • Overtime, Bonus, and Part-time Income: Overtime and/or bonus income received for a period of less than two years is acceptable where the underwriter determines that there are reasonable expectations of its continuance. An earning trend over the period of time of receipt must be established and analyzed. Part-time income means income from jobs taken in addition to the normal regular employment to supplement the borrower’s income. The same rules apply for determining using it as a part of qualifying.
    • Extended Absence From Workforce: In some cases, the borrower may have recently returned to the work force after an extended absence. The borrower’s income may be considered effective and stable, provided the borrower has been employed in the current job for 6 months or more and the borrower can document a 2 year work history prior to the absence from the work force.
    • Rental Income: Rental income from relatives residing on the premises is acceptable, provided the rental income is shown on the borrower’s tax returns.
    • Cash Saved at Home: Borrowers who meet the “cash borrower” profile (no traditional credit, no bank accounts, etc.), who have saved cash at home and are able to adequately demonstrate the ability to do so, are permitted to have this money included, with satisfactory explanation, as an acceptable source of funds to close a mortgage loan.
    • Child care expenses are NO LONGER included as debt.
    • Non Occupant Co-Borrowers: When there are two or more borrowers, but one or more will not occupy the property as a primary residence, the maximum mortgage is usually limited to 75% loan to value. However, maximum financing is available for borrowers related by blood or for unrelated individuals that can document evidence of family type or long-standing and substantial relationship not arising out of the loan transaction. Qualifying is determined by the underwriter.
    • Assumable: All Kentucky FHA FHA loans are assumable.
    • Electronic/Online Payroll: The industry as a whole recognizes that some employers use online payroll for pay stubs and W-2s. These types of documentation are acceptable.
    • Rate Adjustments: There are no interest rate adjustment “penalties” for higher loan to values with Kentucky FHA FHA fixed rate loans. The rate, is the rate, is the rate.
    • Secondary Financing: Secondary financing is not allowed with an Kentucky FHA FHA loan. The only acceptable second mortgage is with an approved HUD gifting agent, such as down payment assistance provided by a gov’t agency in the form of a “silent” second mortgage. Piggie Back seconds/HELOCS are simply not allowed.
    • Home Inspection: A home inspection may or may not be required on a property, depending on various factors. Typically, you will find it is not required, but is recommended on any existing residence.
    • Pest Inspection: A termite inspection is required for all existing properties.
    • Closing Costs: Closing costs charged to the borrower are restricted and may, in fact, be less than conventional closing costs (dependent upon your lender or broker).
    • Free Application and Credit call today 502=905=3708 or email kentuckyloan@gmail.com

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  • Good Neighbor Next Door Program

    Posted Under: Home Buying in Lexington, Financing in Lexington, Credit Score in Lexington  |  May 8, 2013 6:10 AM  |  444 views  |  No comments

    The Good Neighbor Next Door Program offers HUD owned single family (one-unit) homes to eligible participants at a 50% discount. Law enforcement officers, teachers, firefighters and other emergency medical technicians who meet all other requirements of the program are all eligible to participate in this program.

    Borrower is a full-time law enforcement officer, teacher or firefighter/emergencymedical technician

    A 50 percent discount from the list price is provided in the form of a forgivable second lien

    The second mortgage is a mortgage and note payable to and provided by HUD in the amount of the difference between the list price of the home and discounted selling price
     -The term of the note is 36 months from the date of owner-occupancy 
     -Refinance restrictions may apply

    One-unit residential properties

    Borrower cannot own any other residential property within 12 months of the offer date

    None of the borrowers could have ever utilized this program in the past

    The following must be detailed on the purchase contract with HUD 

     -50% discount

     -$100.00 downpayment required
     -Borrower may finance closing costs
    Joel Lobb (NMLS#57916)
    Senior  Loan Officer
    502-905-3708 cell

  • Kentucky Mortgage Guidelines updated 2011

    Posted Under: Home Buying in Lexington, Financing in Lexington, Credit Score in Lexington  |  January 5, 2011 6:23 PM  |  883 views  |  1 comment

    Kentucky Mortgage Guidelines updated 2011

    Pressured by federal regulators to write quality loans, lenders have little choice but to follow underwriting marching orders issued in rapid succession this year by federal mortgage insurers.

    Here’s a rundown.

    Fannie Mae

    • Effective Dec. 13, among other underwriting updates, Fannie Mae is reducing debt-to-income ratios, the amount of a borrower’s gross monthly income that goes toward paying all debts. Fannie is dropping the ratio from 55 to 45 percent and the debt must include once exempt revolving debt with a balance of 10 or fewer payments.
    • Also, if the lender can’t verify the amount of a minimum monthly payment on any revolving credit, it must assume the payment is 5 percent of the balance and include that amount in the debt-to-income ratio.
    • Once excluded, but now also included in debt-to-income ratio, are payments on decades-old mortgages with only 10 payments (or more) remaining. That will make it tougher for older home owners to buy a second home.
    • Borrowers who have gone through foreclosure can forget buying a home with a Fannie-backed loan for seven years. That reduces the pool of mortgages available to consumers who’ve suffered a foreclosure.

    Freddie Mac

    Freddie Mac is considering guidelines similar to big sister Fannie’s.

    • Also, effective Dec. 1, Freddie Mac lenders now will be required to consider a borrower’s credit report inquiries made in the previous 120 days, rather than the prior 90 days as was required before the new rule.

    If the borrower was granted additional credit, the debt adds to the debt-to-income ratio.

    Federal Housing Administration (FHA)

    Borrowers underwritten out of the running for Fannie Mae and Freddie Mac guidelines on conforming loans may have to consider low-down payment Federal Housing Administration loans. However, those loans are already tougher to land than ever and they come with mortgage insurance that recently rose in price.

    FHA loans have become the go-to mortgage for less financially fit borrowers who likely would have shopped the now defunct subprime market.

    • In October, the FHA began to require credit scores of at least 500, creating a minimum where none previously existed. Borrowers with scores ranging from 500 to 579, must come up with 10 percent down. Borrowers who want an FHA loan with only 3.5 percent down must have a score of more than 580.

    FICO scores, ranging from 300 to 850, are a numerical rendition of a borrowers’ creditworthiness.

    Individual lenders can set their own credit score requirements and several lenders recently pushed the minimums to 640 on FHA loans.

    • Earlier this year, the FHA also boosted the upfront mortgage premium to 2.25 percent of the loan amount, up from the previous 1.75 percent, the second increase in the past two years.
    • Also earlier this year, a seller’s contribution to FHA loan closing costs was slashed from 6 percent to 3 percent, after critics said the higher maximum encouraged sellers to mark up the price to compensate for their concession.

    If you have questions about a mortgage, give us a call at 502-905-3708 or email us at kentuckyloan@gmail.com ----Visit my website for daily updates and info on Kentucky Mortgage
    NMLS 57916

  • 4 Things Every Borrower Needs to Get Approved for a Mortgage Loan In Kentucky–FHA VA KHC Conventional Mortgage

    Posted Under: Home Buying in Lexington, Financing in Lexington, Credit Score in Lexington  |  September 18, 2010 2:10 PM  |  2,793 views  |  1 comment

    4 Things Every Borrower Needs to Get Approved for a Mortgage Loan In Kentucky–FHA VA KHC USDA Mortgage Loans in the state of Kentucky

    1 comment

    I wish it were that easy.  There are 4 basic things that a borrower needs to show a lender in order to get approved for a mortgage.  Each category has so many what ifs and sub plots that each box can read as it’s own novel.  In other words, each category has so many variables that can affect what it takes to get approved, but without further adieu here are the four categories in no particular order as each without any of these items, you’re pretty much dead in the water:


    You need income.  You need to be able to afford the home.  Without it, forget it!  But what is acceptable income?  Basically, it all depends on the type of loan that a borrower applies for.  Jumbo, V.A., USDA, FHA, Conventional, Super Jumbo?  Let’s just say that there are two ratios:

    1. First Ratio – The first ratio, top ratio or housing ratio.  Basically that means out of all the gross monthly income you make, that no more that X percent of it can go to your housing payment.  The housing payment consists of Principle, Interest, Taxes and Insurance.  Whether you escrow or not every one of these items are factored into your ratio.  There are a lot of exceptions to how high you can go, but let’s just say that if your ratio is 33% or less, generally, across the board, you’re safe.
    2. Second Ratio- The second ratio, bottom ratio or debt ratio includes the housing payment, but also adds all of the monthly debts that the borrower has.  So, it includes housing payment as well as every other debt that a borrower may have.  This would include, Auto loans, credit cards, student loans, personal loans, child support, alimony….basically any consistent outgoing debt that you’re paying on.  Again, if you’re paying less than 43% of your gross monthly income to all of the debts, plus your proposed housing payment, then……generally, you’re safe.  You can go a lot higher in this area, but there are a lot of caveats when increasing your back ratio.

    What qualifies as income?  Basically, it’s income that has at least a proven, two year history of being received and pretty high assurances that the income is likely to continue for at least three years.  What’s not acceptable??????  Cash income, short term income and income that’s not likely to continue.


    For the most part this is fairly simple.  Do you have enough assets to put the money forth to qualify for the downpayment that the particular program asks for.  USDA says that there can be no money down.  FHA, for now, has a 3.5% downpayment.  Some loans require 20% down.  These assets need to be validated through bank accounts and sometimes gifts.  Can you borrower the down payment?  Sometimes.  Generally if you’re borrowing a secured loanagainst a secured asset you can use that.  But rarely can cash be used as an asset.  TALK TO YOUR LOAN OFFICER FIRST when discussing what’s acceptable?


    Whewwwwwwwwwwwwwwwwwwwwwwwwwwww.  This can be the bane to every borrower, every loan officer and every lender……and yes, to every realtor.  How many times has a borrower said my credit’s good, only to find out that it’s not nearly as good as a borrower thinks or nearly as good as the borrower needs.  Big stuff for sure.  620 is the bottom score (again with few exceptions) that lenders will permit.  Below a 620, then you’re in a world of hurt.  Even at 620, people consider you a higher risk that other folks and are going to penalize you or your borrower with a more expensive loan.  700 is when you really start to get in the “as a lender we love you” credit score.  720 is even better.  Watch your credit!!!!!  Check out my post:


    In many ways this is the easiest box.  Why?????  Generally, there’s nothing you can do to affect this.  Bottom line here is…..”is the value of the house at least the value of what you’re paying for it?”  If not, then not good things start to happen.  Generally you’ll find less issues with values on purchase transactions, because, in theory, the realtor has done an accurate job of valuing the house prior to taking the listing.  The big issue comes in refinancing.  In purchase transactions, the value is determined as the

    Lower of the value or the contract price!!!

    That means that if you buy a $1,000,000 home for $100,000, the value is established at $100,000.  Conversely, if you buy a $200,000 home and the value comes in at $180,000 during the appraisal, then the value is established at $180,000.  Big issues….Talk to your loan officer.

    For each one of these boxes, there are over 1,000 things that can effect if a borrower has reached the threshold to complete that box.  Soooooooooooo…..talk to a great loan officer.  There are so many loan officers that don’t know what they’re doing.  But, conversely, there’s a lot of great ones as well.  Your loan is so important!  Get a great lender so that you know, for sure, that the loan you want, can be closed on!

    Call us today for a free preappoval and compare our rates and service to any one in Kentucky

  • For a Quick Easy Loan Approval:Have These Items Ready When You Apply For a Loan

    Posted Under: Home Buying in Lexington, Financing in Lexington, Credit Score in Lexington  |  September 9, 2010 9:08 AM  |  971 views  |  No comments

    For A quick Approval:Have These Items Ready When You Apply For a Loan

    For a Quick Easy Loan Approval:

    Have These Items Ready When You Apply For a Loan

    •Income Items 

    â—¦W2 forms for the last two years

    â—¦Most recent pay stubs covering a 30 day period

    ◦Federal tax returns (1040's) for the last two years, if: 

    â– you are self-employed

    â– earn regular income from capital gains

    â– earn sizable interest income, etc.

    â– earn more than 25% of your income from commissions or bonuses

    â– own rental property

    â– or are in a career where you are likely to take non-reimbursed business expenses).

    â—¦Year-to-Date Profit and Loss Statement (for self employed)

    â—¦Corporate or Partnership tax returns (if you own more than 25% of the business)

    â—¦Pension Award letter (for retired individuals)

    â—¦Social Security Award letters (for those on Social Security)

    •Asset Items 

    â—¦Bank statements for previous two months (sometimes three) on all accounts. All pages, even if you don't think them important.

    â—¦Statements for two months on all stocks, mutual funds, bonds, etc

    â—¦Copy of latest 401K statement (or other retirement assets because they can count as reserves)

    â—¦Explanations for any large deposits and source of those funds

    â—¦Copy of HUD1 Settlement Statement on recent sales of homes

    â—¦Copy of Estimated HUD1 Settlement Statement if a previous home is for sale, but not yet closed

    â—¦Gift letter (if some of the funds come as a gift from a family member - the lender will supply a blank form)

    ◦Gifts can also require: 

    â– Verification of donor's ability to make the gift (bank statement)

    â– Copy of the check used to make the gift

    â– Copy of the deposit receipt showing the funds deposited into bank account or escrow

    ◦Note: many get their statements of various kinds over the internet and these are not always acceptable to lenders, especially when the printed version does not contain the borrower's name, account number, and the name of the institution. 

    •Credit Items 

    â—¦Landlord's name, address, and phone number (if you rent - for verification of rental)

    ◦Explanations for any of the following items which may appear on your credit report: 

    â– Late payments

    â– Credit inquiries in the last 90 days

    â– Charge-offs

    â– Collections

    â– Judgments

    â– Liens

    â—¦Copy of bankruptcy papers if you have filed bankruptcy within the last seven years


    â—¦Copy of purchase agreement (if you have already made an offer)

    ◦To document receipt of child support (if you desire to show it as income) 

    â– Copy of Divorce Settlement (to show the amount)

    â– Copies of twelve months canceled checks to document actualreceipt of funds

    •FHA Loans 

    â—¦Copy of Social Security Card (or other documentation of social security number)

    â—¦Copy of Driver's license

    •VA Loans 

    â—¦Copy of DD214


    â—¦Copy of your most recent monthly mortgage bill

    ◦The following cannot hurt to have ready, but are not as necessary as they once were: 

    Copy of Note on existing loan

    Copy of HUD1 Settlement Statement on existing loan
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