I have successfully originated over 200 VA Home loans in Kentucky. Put my experience to work for you. Call or text me today at 502-905-3708 or email me at Kentuckyloan@gmail.com-This website is not affiliated with the VA or any other government agency. NMLS #57916 Equal Housing Lender. Same Day Approvals, Fast Closings, and a Local Veteran offering VA Home Loans in Kentucky. Free Credit Report and Pre-Approvals NMLS# 57916 Joel Lobb Loan Originator, Company NMLS ID 1738461 . Equal Housing Lender
Why VA Loans? First and foremost, VA loans put homeownership within reach of a wider population. That’s because, while they’re issued and administered through a wide range of lending institutions, all VA mortgages are federally guaranteed. Lenders consider them lower risk than other loans. That means that people with average or even below-average credit scores are more likely to be approved for a VA loan than a traditional loan. If you have a high debt-to-income ratio or you’ve fallen behind on your credit card payments in the past, you may be eligible for a VA loan, even if you’ve been turned down for a private mortgage in the past. What’s more, vets and active-duty soldiers can often purchase a loan with no down payment. Military wages aren’t the most generous. In 2020, new service members earned as little as $19,000 per year, while the median salary in the US is nearly $50,000 per year. Particularly for people who are just starting out in their military careers, it can be tough to amass enough savings to match the down payment requirements associated with traditional loans. If you take out a private loan and put down less than 20% of your home purchase price, you’ll be required to pay for Private Mortgage Insurance (PMI) until you’ve established 20% equity in your home. That can add $100 or more to your monthly homeownership expenses. The government stipulates that VA loan borrowers don’t have to take out PMI. Finally, VA loan interest rates typically track below market averages. Again, that’s because lenders consider them less risky. What can that mean in savings for you? Here’s just one example. A 0.5% interest rate reduction on a $200,000 30-year mortgage can save you more than $19,000 in lifetime loan costs. And that’s before you factor in PMI payments. The more you borrow, the more you benefit from a low interest rate. The median purchase price of a US home in 2021 is over $400,000. So chances are, you could wind up saving more with a VA loan.
We recognize that our veterans provide an invaluable service. As such, we fully support home loan programs guaranteed by the U.S. Department of Veterans Affairs that are specifically designed to support veterans and their families. Although there are many perks that come with a VA versus conventional loan, a conventional loan offers some benefits that are not available through a VA loan. Let’s compare both of these loans to determine which type is best for you.
What Is a VA Loan?
A VA loan is a great benefit for those who have contributed to their country by serving in a military capacity. It is intended to give veterans access to home loans with advantageous terms. The federal government guarantees a portion of the loan, enabling veterans to qualify for more favorable terms when working with private lenders. The VA loan program was designed to offer long-term financing to eligible American veterans or their surviving spouses (provided they do not remarry). In addition to helping veterans buy, build, repair, retain or adapt a home for their own personal occupancy, it was also created to help veterans purchase properties with no down payment.
What Are the Pros and Cons of a VA Loan?
There are a myriad of reasons why a veteran would want to choose a VA Loan. A VA loan is federally backed. It also offers lower interest rates and fees than are usually associated with home lending costs. The only cost required by VA loans is a funding fee of one-half of one percent of the total loan amount. And that may be paid in cash or rolled into the loan amount. However, there are some factors you will want to take into consideration when deciding if a VA Loan fits your home buying needs.
No Private Mortgage Insurance (PMI) or Down Payment Necessary. Eliminating these costs can significantly reduce total housing expenses. Typically, a lender requires a 20% down payment. Borrowers who are unable to put down 20% are considered riskier and as a result must pay a PMI, which is typically 0.58% to 1.86% of the original loan amount per year on a conventional home loan. Because VA loans are federally backed, lenders do not have to worry about the house going into foreclosure and are able to offer a mortgage plan that does not require a PMI without a down payment.
Interest Rate Reduction Refinance Loan (IRRRL): IRRRL loans are typically used to reduce the borrower’s interest rate or to convert an adjustable rate mortgage (ARM) to a fixed rate mortgage. Veterans may seek an IRRRL only if they have already used their eligibility for a VA loan on the same property they intend to refinance. However, your lender can use the VA’s email confirmation procedure for interest rate reduction refinance in lieu of a certificate of eligibility. Additionally, an IRRRL can reduce the term of your loan from 30 years to 15 years. An IRRRL offers great potential refinancing benefits for vets, but be sure to check the facts to fully understand IRRRL stipulations and avoid an increase in other expenses.
Native American Direct Loan (NADL) Program: This program was designed to help Native American veterans or spouses of Native American veterans buy, build, or improve a home on federal trust land. This loan also qualifies veteran home buyers for the benefits listed above, in addition to limited closing costs and a low-interest, 30-year, fixed mortgage. Plus, this is a reusable benefit, which means you can get more than one NADL to buy, build or improve another residence in the future.
Adapted Housing Grants. To qualify for an adapted housing grant, veterans must own or will own the home they are looking to buy, and have a qualifying service-connected disability. This loan is a great option for veterans who are seeking to make home modifications to accommodate a disability. Currently, if you qualify for a grant, you can get up to a maximum of $100,896.
Funding Fee and Closing Fees. A VA loan funding fee may vary depending on whether you put a down payment on a house. Depending on if you are a first-time VA loan borrower or making a subsequent loan purchase, a funding fee can range from roughly 1.5% on a down payment of 10% or more to 3.5% on downpayment of 5% or less. Closing fees on a house can range from 2–5%. These are definitely costs you will want to consider when determining how much home you can afford.
Property Eligibility. A VA loan may not be applied to purchasing a farm, property in a foreign country, land or an investment property/second home.
What Is a Conventional Loan and How Does It Compare to a VA Loan?
Conventional mortgage loans are some of the most commonly used housing loans. However, they are not guaranteed by the federal government, so borrowers who are not putting 20% on a down payment will likely incur the costs of a PMI. Unlike government-backed loans, conventional loans are not limited by geographic constraints. They can offer more flexibility than a government-insured loan but may be harder to qualify for and require a higher credit score (at least 620).
For veterans, the main advantage of this loan compared to a VA loan is that it provides options that may fit a wider range of home-buying needs. Here are some benefits of conventional loans:
Usable for purchases, rate and term refinances and cash-out refinances
Allow cash out up to 80% of your home’s value
Debt to income ratios allowable up to 50%
Usable for primary, secondary or investment properties
Applicable for condos, single family homes and up to 1–4 unit properties
First-time home buyer programs with as little as 3% down payments
Options both with and without escrows or impounds
Request a Customized VA Approved Condo Report for Kentucky VA Mortgage Loans. See link below
How Soon Can You Qualify for a VA Loan after a Chapter 7 or Chapter 13 Bankruptcy in Kentucky?
Kentucky VA mortgage guide for bankruptcy
As a reminder, these are the basic differences between bankruptcies which impact VA qualifying differently:
Chapter 7 Bankruptcy: you ask the bankruptcy court to discharge most of the debt you owe
Chapter 13 Bankruptcy: you file a repayment plan with the bankruptcy court to pay back all or a portion of your debts over time.
So, does the type of bankruptcy filed affect VA loan qualifying? The answer is YES, it most definitely does.
How soon can you qualify for a VA loan after a Chapter 7 Bankruptcy?
Chapter 7 Bankruptcies discharged more than two years ago from the date of closing for purchases and refinance, it may be disregarded.
If the bankruptcy was discharged within the last 1 to 2 years, it is probably not possible to determine that the applicant or spouse is a satisfactory credit risk unless both of the following requirements are met:
The applicant or spouse has obtained consumer items on credit subsequent to the bankruptcy and has satisfactorily made the payments over a continued period; and
The bankruptcy was caused by circumstances beyond the control of the applicant or spouse such as unemployment, prolonged strikes, medical bills not covered by insurance, and so on, and the circumstances are verified. Divorce is not generally viewed as beyond the control of the borrower and/or spouse.
Please note that additional factors can contribute towards granting an exception to the 2 year policy, but any and all factors considered would have to be reviewed on a case by case scenario prior to approval. Borrowers discharged for less than a year will not generally be accepted as a satisfactory credit risk.
How soon can you qualify for a VA loan after a Chapter 13 Bankruptcy?
A. For Chapter 13 Bankruptcies that are still in progress:
The applicant must document at least one year into the payout plan has elapsed along with satisfactory payment history
The applicant must obtain court permission to enter into the new mortgage
When the bankruptcy is still in repayment, the Chapter 13 payment will be counted in the debt ratios
B. Once the borrower has satisfactorily completed the repayment, the borrower is considered to have re-established credit
As you can see, the type of bankruptcy can drastically impact VA loan eligibility and the required waiting period.
If you have filed for chapter 7 or chapter 13 bankruptcy, then you can still qualify for a mortgage just one day out of bankruptcy. Today, there are thousands of people who are trying to find a mortgage after filing for bankruptcy. In the past, finding a mortgage after a bankruptcy was not the easiest thing to do. The good news is that today you can get a mortgage just one day out of bankruptcy.
How Long after a Bankruptcy Can I Qualify for a Mortgage?
There are bankruptcy lenders who can help with your mortgage even just one day out of chapter 7 or chapter 13 bankruptcy. You will likely need a larger down payment and show that you are taking steps to improve your credit.
Below, we will take you through some mortgage after bankruptcy options and then connect you with some of the best bankruptcy lenders. We understand that you area dealing with a lot and having a bankruptcy is not easy. Let us help guide you through this process.
Type of Loan
Chapter 7
Chapter 13
Conventional
4 years
2 years
FHA
2 years
1 year
VA
2 years
1 year
USDA
3 years
1 year
Subprime
1 day
1 day
How Long Must You Wait To Qualify for a Mortgage After Filing for Bankruptcy
Every type of loan has different waiting period requirements. Here are some of the basics:
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