What qualifies as income?Â Basically, itâ€™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.Â Whatâ€™s not acceptable??????Â Cash income, short term income and income thatâ€™s not likely to continue.
For the most part this is fairly simple.Â Do you have enough assets to put the money forth to qualify for the downpayment that the particular program asks for.Â USDA says that there can be no money down.Â FHA, for now, has a 3.5% downpayment.Â Some loans require 20% down.Â These assets need to be validated through bank accounts and sometimes gifts.Â Can you borrower theÂ down payment?Â Sometimes.Â Generally if youâ€™re borrowing aÂ secured loanagainst a secured asset you can use that.Â But rarely can cash be used as an asset.Â TALK TO YOUR LOAN OFFICER FIRST when discussing whatâ€™s acceptable?
Whewwwwwwwwwwwwwwwwwwwwwwwwwwww.Â This can be the bane to every borrower, every loan officer and every lenderâ€¦â€¦and yes, to every realtor.Â How many times has a borrower said my creditâ€™s good, only to find out that itâ€™s not nearly as good as a borrower thinks or nearly as good as the borrower needs.Â Big stuff for sure.Â 620 is the bottom score (again with few exceptions) that lenders will permit.Â Below a 620, then youâ€™re in a world of hurt.Â 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.Â 700 is when you really start to get in the â€œas a lender we love youâ€Â credit score.Â 720 is even better.Â Watch your credit!!!!!Â Check out my post:
In many ways this is the easiest box.Â Why?????Â Generally, thereâ€™s nothing you can do to affect this.Â Bottom line here isâ€¦..â€is the value of the house at least the value of what youâ€™re paying for it?â€Â If not, then not good things start to happen.Â Generally youâ€™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.Â The big issue comes inÂ refinancing.Â 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.Â 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.Â Big issuesâ€¦.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.Â Sooooooooooooâ€¦..talk to a great loan officer.Â There are so many loan officers that donâ€™t know what theyâ€™re doing.Â But, conversely, thereâ€™s a lot of great ones as well.Â Your loan is so important!Â Get a great lender so that you know, for sure, that the loan you want, can be closed on!
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