Tuesday, August 20, 2013

What are the qualifications to getting a mortgage in Louisville Kentucky

What are the qualifications to getting a mortgage in Louisville Kentucky

Getting a mortgage now days has really been simplified due to the government controlling over 95% of all mortgages backed since the 2008 credit crisis. When looking to get pre-approved for a Louisville Mortgage loan in 2013, the lender is going to look at the following four sections to determine your mortgage loan approval application

Credit Score- Most Louisville Mortgages that are originated currently must have a middle credit score of 640. If you have below this score it is extremely difficult to get approved for a Kentucky Mortgage loan.

760-8502.926 percent
700-7593.148 percent
680-6993.325 percent
660-6793.539 percent
640-6593.969 percent
620-6394.515 percent

Employment- Mortgage underwriters will look at your last 2 years of work history and see if you were able to maintain a stable work history with no job gaps or income losses.

Debt to Income Ratio-Most lenders will try to hold your maximum mortgage payment pre-approval   amount approval to a third of your gross monthly income. For example, if you make $4000 gross monthly, the maximum house payment would be $1200 a month. There are some compensating factors that will allow for a higher loan approval if you have a large down payment or a lot reserves in savings after the loan is made. A credit score of 740+ will sometimes allow for a debt to income ratio to exceed 31% of your gross income monthly income too. 

Down payment-Most lenders will want to verify that you have the minimum down payment saved up, or have access to the down payment via a gift from parents or from your retirement account will proper documentation in the file. Kentucky FHA loans currently require 3.5% down payment and Conventional loans backed by Fannie Mae and Freddie Mac require a minimum down payment of 5%. There are some special programs thru VA and USDA that require no down payments for Kentucky Home buyers.