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Tag: kentucky va loan
How To Qualify For An Kentucky VA Loan
VA loans help active duty, reserves, and veterans buy a house with no down payment and no mortgage insurance monthly making it one of the best loans out there while getting a low 30 year fixed rate loan based on market trends.
VA loans help you buy a home with limited credit or no credit if you can provide alternative trade lines
The VA loan program makes it possible to purchase a home with as little as 0 percent down and with a lower credit score than required by traditional mortgages.
VA loans are not just for first-time home buyers, and they’re not restricted to low-income applicants. Here are the requirements you’ll need to meet to qualify for an VA loan
1. Consistent income and work history for last two years to support mortgage payment
In general, lenders want to see that you’ve worked for a year or two in the same field (if not the same employer). Consistent two year history needed, does not have to be same employer.
2. Debt to income ratio for VA loans.
The biggest factor in qualifying for an VA loan is whether you can afford the payment. As a rough guideline:
- your mortgage payment must not be more than 1/3 of your income (before taxes) and
- your mortgage payment PLUS other monthly debt payments (car loan, credit cards) must not be more than 43 percent of your income for a manual underwrite, or can go higher on the debt ratios if you get an automated approval through Desktop Underwriting AUS system.
- Car insurance, cell phone bills, utility bills are not included in the debt to income ratio just the monthly payments on the credit report and child support .
3. Zero Down Payment
There is no minimum credit score for VA loans, but in reality most lenders will wants a 620 score. However, we deal with some lenders that will go down to a 560 credit score but be prepared to get a lot of documentation to support your lower credit score.
When Can I Get a VA Loan After Foreclosure, Bankruptcy, or Short Sale?
Every once in a while, bad things happen to good people. Whether credit issues result from financial mismanagement or other circumstances, VA home loan guidelines are very forgiving. So, how long after a foreclosure, short sale, or bankruptcy can you get a VA loan?
- Foreclosure seasoning = 2 years, 1 year if proven out of borrower’s control
- Short sale seasoning = Same as foreclosure, but if not lates prior to short sale then no seasoning required
- Bankruptcy waiting period = Chapter 7 seasoning is 2 years from discharge date. Chapter 13 seasoning is at least 12 months from filing
A key VA home loan requirement after major credit events like these is re-established credit. Therefore, showing on-time rent and other credit references may show recovery from a foreclosure, short sale, or bankruptcy.
Rent Verification for VA Loans With Low Scores
For lower credit scores on VA or any other type of mortgage loan, rent or mortgage history is very important. A previous housing history is a good indicator of how someone will pay a new house payment. So lenders take rent very seriously. The most weight is given to a rent history proven by cancelled checks. Then a buyer proving on time payment history through checks shows the buyer is the one who actually made the payments. Plus it shows they were made on time and there is no disputing this. Next, rent payments verified through a rental company is good. The weakest would be rental payments made to an individual. In cases where payments are made to individuals, additional documentation may be required. For instance, cancelled checks or proof of withdrawal from a bank account for 12 months would help.
Keep in mind, using alternative credit is not a way to ignore a bad credit report or score. Alternative credit is a way of proving a more solid or in depth payment history than the credit report shows.
VA Mortgage Loan Checklist
- Signed and dated Statement of Service Letter (Ask us if we need it though)
- DD214 (if no longer in the military)
- Current LES
- Most recent W2 and Tax Return
- Most recent bank statement (all pages of actual monthly statement)
- Photo identification
- Military transfer orders – if transferring to a new base
We will request your COE, status report, complete your application, and discuss your mortgage options. Our goal is to have educated, confident, and approved buyers!
Kentucky VA Mortgage Lender Guidelines
Who is eligible for a VA Mortgage loan in Kentucky?
1. WHAT KIND OF CREDIT SCORE DO YOU NEED TO GET APPROVED FOR A VA MORTGAGE LOAN IN KENTUCKY?
Most VA mortgage lenders in Kentucky are looking for at least a 620 credit score for a VA loan approval. However, VA in their official published guidelines for credit scores says they don’t have a minimum credit. What happens with VA Lenders they will create credit overlays to push out lower credit score borrowers because if they do too many VA loans that default, then they run the risk of getting shut out from VA from them insuring their loans.
FICO credit scores range from 300 to 850. Most borrowers are in the 600 to 700 ranges with very few in the 300 to 400 range and few limited 800 scores.
It pays to shop around with different VA lenders in Kentucky to see what their minimum credit score requirements are.
2. Who is eligible for a VA Mortgage loan in Kentucky?
Kentucky Veterans, active duty servicemembers, reservists, National Guard members, surviving spouses, and other individuals can earn eligibility for home loan benefits. You may qualify if you are:
- Military veteran
- Active duty servicemember
- Reservist or National Guard member
- Surviving spouse who did not remarry
- Academy cadet or midshipman
- National Oceanic and Atmospheric Administration (NOAA) officer
- Public Health Service (PHS) Officer
In order to obtain a Kentucky VA loan, you’ll need a Certificate of Eligibility, which you can apply for online or we can get for you with your info. Usually comes back instantly, no waiting around like it use to be for it to come in the mail.
3. Can you get a Kentucky VA Mortgage loan more than once?
If you are deemed eligible for a Kentucky VA loan, the benefit is yours for life, and in some cases, it can be used multiple times at once. Many veterans use it repeatedly for their home financing needs. Use it for a starter home, then use it again when you’re ready for more space. THEN you can use it again to refinance your loan for a lower rate or get cash out of your home’s equity. It’s completely up to you.
When you use your VA COE again to buy another home, there is an increase in the funding fee from 2.15% to 3.6% for regular veteran and active duty if not on VA disability have a waiver of the VA funding fee.
You can have two active VA loans out at the same time. Call or email me and I can explain to you. Very detailed and complex but can be done if meets the test for VA guidelines for having two VA loans at once.
KENTUCKY VETERANS ARE GUARANTEED VA MORTGAGE LOAN
No one is guaranteed a loan. Even veterans with VA entitlement.
The word “guaranty” comes up a lot when talking about Kentucky VA loans. Well, I’m here to tell you that a “guaranty” and a “guarantee” are not the same thing. Many people assume when they see “VA loan guaranty” that they’re guaranteed a VA loan, and that’s simply not the case.
The VA loan guaranty refers to the amount of each VA loan that is backed by the government (usually 25%). If the loan defaults, the amount under guaranty is refunded to the lender by the government. So just because you see guaranty, doesn’t mean your loan is guaranteed to be approved.
HOW LONG DOES VA APPRAISAL PROCESS?
Fact: The VA appraisal process can be rough if you’re pursuing a home that’s in rough shape. Otherwise, the VA appraisal process isn’t much different from the average Conventional appraisal.
VA loan appraisers use the VA’s “Minimum Property Requirement” guidelines to determine if a home is safe, structurally sound, and sanitary. If the home doesn’t meet their standards, the process can take a while. That’s why it’s important to choose your home wisely. A few of the MPRs include:
- Plumbing and electrical systems must be safe and in good condition
- Heating must be adequate
- Roofing must be adequate
- No leaks, excessive dampness, defective construction, or decay
- No termites, destructive insects, fungus growth, or dry rot
Kentucky VA loans aren’t designed to fund fixer-uppers. The VA wants veterans and servicemembers to buy solid, move-in ready homes, not projects. Also, since most VA borrowers are putting no money down, they don’t want to take the risk of borrower walking away with no equity in the home.
Joel Lobb (NMLS#57916)
Senior Loan Officer
Senior Loan Officer
American Mortgage Solutions, Inc.
10602 Timberwood Circle Suite 3
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. Equal Opportunity Lender. NMLS#57916 http://www.nmlsconsumeraccess.org/
KENTUCKY VA MORTGAGE LENDER 
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