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Kentucky VA Loans

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Kentucky VA Loans.

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Louisville Kentucky VA Mortgage

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Louisville Kentucky VA home mortgage loans offer many benefits to qualified veterans.  Did you know that since 1944, when home loan guarantees were part of the original GI Bill, the Veterans Administration has guaranteed over 18 million home loans totaling more than $911 Billion?  Loans are available for purchasing or refinancing a home.  Here are a few of the Louisville Kentucky VA mortgages being offered to qualified veterans today.

Benefits of Louisville Kentucky VA Home Mortgage Loans

VA Home Purchase Loans – Zero Down Payment

This Louisville Kentucky VA Home Loan program allows veterans with qualifying income and credit to purchase a primary residence with zero money down towards the sale price of the home, providing the sale price does not exceed the appraised value of the home. Closing costs can be negotiated and paid by the seller. Other benefits to the Louisville Kentucky VA home purchase loan are: Loans are assumable; closing costs are limited by the Veterans Administration, making sure the costs are fair; the VA is behind you with additional assistance if you ever have a problem making your loan payments; veterans can prepay their home loan without a penalty; the VA benefit is not limited to first time veteran homebuyers, veterans may reuse his or her benefit again; and private mortgage insurance is not required on the loan.

Louisville Kentucky VA Refinance Loans Available

Louisville Kentucky Conventional loan to Louisville Kentucky VA refinance – If you qualify for a Louisville Kentucky VA loan but do not currently have one, you can now refinance your current existing mortgage to a VA home mortgage loan. The fee for refinancing your conventional mortgage to a VA mortgage is currently 2.51% for veterans who are first-time users.  You can benefit by a possibly lower interest rate than what you currently have, and there is no monthly mortgage insurance or out of pocket closing costs on the new Louisville Kentucky VA loan. Many lenders offer Louisville Kentucky VA home mortgage loans and rates will vary, so shop the rate with several lenders to see if the current low rates being offered on these loans today can benefit you.

VA Streamline Refinance – This loan is for current veterans who have an existing VA loan and wish to lower their interest rate. These loans are sometimes referred to as “Interest Rate Reduction Refinancing”.  Being one of the most popular VA loans, veterans often choose this loan program because Louisville Kentucky  mortgage rates are low for those who want to streamline a Louisville Kentucky mortgage refinance.  It’s called a streamline refinance due to having no out of pocket costs, no required appraisal and no income or credit check is needed to qualify.  Reason being, veteran borrowers have already qualified when obtaining their current mortgage that they now wish to refinance, which make these loans close faster due to less documentation.

Louisville Kentucky VA Cash Out Refinance – Veterans in need of utilizing the equity in their homes to gain cash proceeds for any number of reasons can qualify for the VA cash out refinance loan.  This loan allows for an amount up to 90% of the home’s value.  No out of pocket closing costs and no monthly mortgage insurance is required.

VA Home Mortgage Loans: Help for Borrowers in Delinquency

VA home mortgage loans offer help and advice for borrowers that have become delinquent in their VA mortgages.  The Department of Veterans Affairs announced recently some general guidance for borrowers who may be encountering difficulties.

Advice from the US Department of Veterans Affairs

The DVA announced in February 2011 that “They are urging all veterans who may be encountering problems with making their mortgage payments to speak with their servicers as soon as possible to explore options to avoid foreclosure.  Contrary to popular belief, servicers really do not want to foreclose on the loans, due to foreclosure actions being highly costly.”

Possible Options from VA Loan Servicers

Depending on the veteran’s specific situation, servicers may offer any of the following options to avoid foreclosure for VA borrowers in default on their loans:

Repayment Plan – The borrower makes regular installment payments each month plus part of the missed installment payment(s).

Special Forbearance – When the servicer agrees not to initiate foreclosure actions allowing time for borrowers to repay the missed loan installments. For example: when a borrower is waiting for a tax refund that enables them to make up the missed payments, and commits to bringing the loan current upon receiving the tax refund.

Loan Modification – This provides the borrower a fresh start, adding the delinquency amount to the home mortgage loans balance and establishing a new payment schedule.

Additional time to arrange a private sale – The servicer agrees to delay foreclosure, to allow time for a sale on the home to close and paying the loan off with sale proceeds.

Short Sale – When the servicer agrees to allow a borrower to sell his/her home for a predetermined lesser amount than what is currently required to pay off the loan.

Deed-in-Lieu of Foreclosure – Borrower(s) voluntarily agrees to deed the property to the servicer instead of going through a lengthy and costly foreclosure process.

Service Members Civil Relief Act (SCRA)

Pursuant to the SCRA veteran borrowers may be able to request relief.  The intention of SCRA is to ease the economic and legal burdens on military personnel during their active service.  To qualify for certain protections available under the act, veteran borrowers must request protection under the Act; and the loan must have originated prior to the current period of active military service.  SCRA may provide borrowers lower interest mortgage rates; prevent foreclosure or eviction up to nine months from the period of military service.

Assistance for Veterans with VA Guaranteed Home Loans

If a VA guaranteed home loan becomes delinquent, VA can help by providing supplemental servicing assistance to help resolve the default. Loan servicers have the primary responsibility of servicing the loan to cure the default. However, in cases where the loan servicer is unable to help the veteran borrower, Loan Guaranty has loan technicians in 8 Regional Loan Centers and 2 special servicing centers who will take an active role in interceding with the original loan servicer in exploring all options to avoid foreclosure.

The US Department of Veterans Affairs also offers assistance to those veterans with non-VA Guaranteed Home Loans, and for homeless veterans.   For veteran borrowers that VA is not able to help, the HOPE NOW Alliance may be of assistance; this is a joint alliance of servicers, counselors and investors who all have the same goal, to assist distressed borrowers in retaining their homes and avoid foreclosure.

For Borrowers who have delinquent Louisville Kentucky VA home mortgage loans and need assistance, the DVA can be good source for help.

There are considerable advantages to the VA loan programs available to qualified veterans today.  We’re mortgage.org and we help assist veterans every day in finding the right home mortgage loans that work for them, and we can help you too.  Contact us today!

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Kentucky VA Home Loans Approval Criteria

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What Criteria Does the VA Use to Approve a Kentucky  VA Mortgage Loans?

What does the VA use to approve Kentucky VA mortgage loans?

If you’re a first-time buyer, VA loans may strike you as confusing and may even be a little daunting. This is because there are a lot of misconceptions about VA mortgage loans, not least of which is the concern on who issues the loan.

It is important to keep in mind that VA guarantees the loan but it does not insure it. Once you are aware of it, you will be able to understand the role that VA plays in the lending process.

Who approves my loan?

According to the VA, many, if not all, VA home loans are approved by the lender using the lending guidelines and criteria which are drafted by the VA. While still in the process of servicing a VA loan, there are several people who usually discuss what the VA will likely approve or decline – in fact, numerous articles with topics revolving VA loans even state it in terms of a particular agency approving an individual loan.

In many situations, the discussions really refers to the rules that are under government regulations. When the VA is required to take care of an individual case, more often than not it means that the situation isn’t properly addressed by existing rules or that the lender still needs additional details.

What is required for my loan to be approved?

Simply put, there are two basic methods set in the VA mortgage guidelines that will determine if an applicant is qualified for a loan. The first thing that will be considered is your income. This is what is referred to as the residual income method.

You will have to ask yourself: can you actually afford to pay the daily costs of the VA home loan? Are your debts too big that you won’t be able to handle an additional monthly mortgage anymore?

You will also need to take into consideration things like your car payment and credit card payments. The second qualification to consider is a more definite examination of the said issues, based on a formula commonly referred to as debt-to-income ratio.

VA Income Requirement Guidelines are similar to other programs.  This is not an inclusive list of items needed.  Documentation may be more of less perLender requirements or through the use of automated underwriting engines such as DO/DU(FNMA) or LP(FHLMC)

Employment verification general requirement

  • Verify a minimum of 2 years employment.
  • If not employed by the present employer less than 2 years:
    Verify prior employment plus present employment covering a total of 2 years;
  • Gaps of employment great than 30 days may need explanation
  • Current paystubs for 1 months time period.  Paystub must contain YTD information.
  • W-2 forms for the past 2 years

or

  • Provide an explanation of why 2 years employment could not be verified.

Borrowers that are self employed will need to provide the following:

VA’s debt-to-income ratio is a ratio of total monthly debt payments (housing expense, installment debts, etc.) to gross monthly income is generally 41%:

Though Debt Ratios may exceed the 41%, if not approved through and automated underwriting engine such as DO/DU(FNMA) or LP(FHLMC) then and underwriter will be looking to make sure that there are some compensating factors. 

In addition, underwriter need to review and verify that there is sufficient residualincome for family support available for the Veteran after making the loan.

 COMPENSATING FACTORS 

 

Compensating factors may affect the loan decision. These factors are especially important when reviewing loans which are marginal with respect to residual income or debt-to-income ratio.They cannot be used to compensate for unsatisfactory credit.

Valid compensating factors should logically be able to compensate (to some extent) for the identified weakness in the loan. For example, significant liquid assets may compensate for a residual income shortfall whereas long-term employment would not.

Compensating factors include, but are not limited to the following:

• Excellent credit history
• Conservative use of consumer credit
• Minimal consumer debt
• Long-term employment
• Significant liquid assets
• Sizable downpayment
• The existence of equity in refinancing loans
• Little or no increase in shelter expense
• Military benefits
• Satisfactory homeownership experience
• High residual income
• Low debt-to-income ratio
• Tax credits for child care, and
• Tax benefits of homeownership.
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