Tag: VA Streamline Refinance

Kentucky VA Lending Guide


Kentucky VA loans are typically the best solution for our honored veterans and service members. Contrary to popular belief, VA loans are fairly easy to process and tend to not be any more complicated than any other loan program that we offer.

Here are some of our favorite features of Kentucky VA loans:

  1. No Down Payment – VA is a true 100% financing loan with no minimum investment required.
  2. No Monthly Mortgage Insurance – VA loans do not require monthly mortgage insurance, providing significant cost savings to our Veterans. They do require an upfront Funding Fee of 0 to 3.6% that is paid directly to the VA. This funding fee is financed into the loan and may be waived for some buyers based on their scenario.
  3. Credit scores – Interest rates and underwriting requirements are less credit score sensitive than other loan programs. In some scenarios, we are able to lend to buyers with scores in the mid-500s. Buyers without a credit score may be eligible with additional requirements.
  4. Renovation loans – We can do purchase and refinance loans that roll the cost of minor and cosmetic repairs into the loan amount.
  5. Property Types – VA Loans can be used on 1-4 unit properties, primary residence only. They can also be used on VA approved condominiums and qualifying manufactured homes.

VA Loans are issued by federally qualified lenders and are guaranteed by the United States Veterans Administration.  VA Loans are available to military personnel and veterans, including Reservists and members of the National Guard. Surviving spouses may be eligible in specific circumstances.

VA Loan eligibility is determined using the Certificate of Eligibility (COE) document. We work directly with the VA on the buyer’s behalf to obtain this document. A buyer can take advantage of the VA loan program more than once!

No photo description available.

Kentucky VA Mortgage Streamline Refinance Information


If you’re a veteran interested in refinancing your Kentucky VA home mortgage, you should look into a VA Streamline loan, also known as a VA to VA loan or Interest Rate Reduction Refinancing Loan (IRRRL). The key aspects of VA Streamline loans are:

 

• You must be a veteran to qualify.

• You must have already used your original VA benefit.

• No minimum credit score required, just a good pay history on the mortgage for last 12 months

• Refinancing should lower your interest rate or change an adjustable rate mortgage (ARM) to a VA Streamline.

• No appraisal is required, underwriting will want you to be current on your loan.

• An email from the VA can be used instead of your Certificate of Eligibility.You don’t need to use your current lender.

• Can be done with no money from you by wrapping fees into the loan.

• A VA funding fee of .5 percent must be paid in cash or included in the loan, unless you are exempt.

• You can’t receive cash back from the loan.

If you’re interested in and eligible for a Kentucky VA Streamline loan, be sure to shop around for the best rate. You’re under no obligation to stay with your current lender.

 

Kentucky VA Mortgage Lender and Broker

Can I do a VA refinance in Kentucky?

Three kinds of VA Refinance programs are available for veterans in Kentucky.


Rate/Term VA Refinance

The Rate/Term VA Refinance can be used to refinance a conventional, FHA or subprime mortgage into a stable, fixed rate VA Loan.

VA Cash-Out Refinance

A Cash-Out VA Refinance is very beneficial for the veteran who wants to access the equity that they have built up in their home. VA Loans can be used to refinance up to 90% of a homes current value and take cash out for any reason.


Streamline Refinance

The VA Streamline Refinance is designed to lower the interest rate on a current VA mortgage or convert a current VA adjustable rate mortgage into a fixed rate. A VA Streamline Refinance Loan can be performed quickly and easily. It requires much less hassle and paperwork than a normal refinance including no appraisal, no qualifying debt ratios and no income verification.


How much can I refinance in Kentucky?

The maximum amount for an KY VA loan is determined by:

Maximum VA Loan in Kentucky: The largest loan allowed for a VA Mortgage varies from county to county. The highest maximum VA Mortgage right now is $1,094,625. The lowest maximum VA Mortgage amount available in any county is $484,500. To see what the limit is in the county in which you’re interested, visit the following page

https://www.benefits.va.gov/HOMELOANS/purchaseco_loan_limits.asp. This site lists U.S. territories as well as states.

Maximum Finance: In Kentucky, The maximum VA refinance loan amount will be 100% of the appraised value of the home for a rate/term refinance or 100% of the appraised value for a VA cash out refinance.

What factors determine if I am eligible for a VA Refinance Loan?

VA refinance loans use two methods for income qualification purposes in Kentucky. The residual income method is the primary method, where it is determined that the borrower has sufficient income to cover daily living costs once housing, taxes, insurance and all other liabilities like credit card and auto payments have been made. Additionally, VA loans use a debt to income ratio (DTI). Using this ratio, the veteran’s total debt should not exceed 41% of the veteran’s total income. Most lenders will require at least a 620 credit score for a VA Loan approval.

Why choose a VA Home Loan?

Kentucky VA Mortgages require no down payment.

There are no prepayment penalties for VA Home Loans.

An Kentucky VA Loan is fully assumable, provided the person assuming is qualified.

VA Mortgage Loans have no PMI premiums.

A VA Mortgage Loan is eligible for non-credit qualifying, Streamline Refinance or “IRRRL”.

A VA Home Mortgage is available all areas of the country, provided a market exists for the property and the home meets VA’s property standards.

A VA Home Loan may be used to purchase or refinance a new or existing home.

Kentucky VA Loans are offered at terms of 15 or 30 years.

VA Refinance Questions Answers

 

1. What are the guidelines for a  Kentucky VA Refinance?

If the borrower wishes to take cash out of the property, then the maximum financing amount is 90% of the appraised value, depending on the borrowers qualifications. If the borrower does not take cash out then the maximum financing will be 100% of the appraised value of the home or the amount you are refinancing plus closing costs, whichever is lower.

2. Why should I consider refinancing into a Kentucky VA-insured mortgage?

Kentucky VA refinance mortgages do not come with prepayment penalties, have no teaser rates nor balloon payments. They are offered at market rate with terms up to 30 years and are fully amortized, meaning that you pay towards principal and interest every month.

3. What if I have a prepayment penalty and other refinancing costs and there isn’t enough equity in my home to refinance?

If you do not have sufficient equity in your home to add your prepayment penalty and/or other refinancing costs into your new VA mortgage, then you should ask your current lender to consider a second mortgage to pay the difference or a short payoff on your existing loan. Offering either of these options is at the discretion of the lender.

4. Does it matter that the value of my home is now less than what I still owe?

Not to Kentucky VA, but the current mortgage lender considering the refinance would have to be willing to accept a short payoff on the existing loan OR to hold a second mortgage to make up the difference needed to pay off the existing mortgage and the home’s value.

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

  1. Signed and dated Statement of Service Letter (Ask us if we need it though)
  2. DD214 (if no longer in the military)
  3. Current LES
  4. Most recent W2 and Tax Return
  5. Most recent bank statement (all pages of actual monthly statement)
  6. Photo identification
  7. 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!