Home Loan Types

	Conventional	FHA	USDA	VA
Max Loan Amount	$417,000.00	$271,050.00	based on income	$417,000.00
DTI Ratio	40%	41%	41%	41%
Down Payment	5%	3.5%	0%	0%

Loan Terms

FHA Loan:	An FHA Loan is a federal assistance mortgage loan in the United States insured by the Federal Housing Administration.  FHA loans have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise been able to afford.
VA Loan:	A VA Loan is a mortgage loan in the United States guaranteed by the U.S. Department of Veterans Affairs.  The VA loan allows veterans 100% financing without private mortgage insurance.
USDA Rural Housing Loan:	Single Family Housing Guaranteed Loan program or Section 502 loans are primarily used to help households purchase homes in rural areas.  The USDA loan allows for 100% financing without private mortgage insurance.
DTI Ratio:	Debt-to-Income Ratio indicates the percentage of income that goes toward paying all recurring debt payments, including mortgage, interest, mortgage insurance, and other debts such as credit card payments, car loan payments, student loan payments, child support payments, alimony payments, and legal judgments.
Down Payment:	The difference between the investment price and the loan amount.
Closing Costs:	All the cost that a lender requires to obtain a loan.
Fixed Rate:	A constant interest rate that does not change for the term of the loan.
Adjustable rate:	An interest that can change during the term of the loan on an annual basis.
Rate Buy Down:	Lowers your interest rate for a given duration on a fixed mortgage reducing your  monthly mortgage payment.
Credit Report:	A report that contains a person’s credit history.
Appraisal:	A report that gives the current market value of the home.
Term:	The number of years to pay off a loan.
Points:	1% of the loan amount a lender may charge.
Pre-Paids:	Expenses that the lender requires being paid upfront. (Homeowners Insurance, Escrow Accounts, Interest)
Short Interest:	Interest collected from the date of closing to the end of the month.
Mortgage Insurance:	Insurance required by the lender for loans with less than 20% down payment.
Home Owners Insurance:	Insurance required by the lender to replace the homes value in the case of disaster.

 

 

 

2012 KENTUCKY BAH Rates

Basic Allowance for Housing:
MHA: KY112 – OWENSBORO

Make your financial plans carefully when factoring in BAH as a contributing source of income for your house payment. Remember, BAH is calculated on local rents. Mortgage amounts are not used to compute Basic Allowance for Housing. You may be able to offset some or all of your monthly mortgage payments using BAH, but it’s not designed to do so.