What are the updated guidelines for qualifying for a Kentucky VA Mortgage in 2020
What is a Kentucky VA Mortgage loan?
A Kentucky VA loan is issued by a private lender in Kentucky and insured by the Department of Veterans Affairs or VA . for qualified U.S. veterans, active-duty military personnel and certain surviving spouses.
Who is eligible for a Kentucky Mortgage VA loan?
You are likely to be entitled to apply for a Kentucky VA mortgage if:
You are active-duty military.
You were separated from military service in a situation “other than dishonorable discharge.”
As a veteran or active military, you meet specific length-of-service requirements.
You are a reservist or a member of the National Guard.
You are a qualified surviving spouse of a deceased veteran.
In addition, there are these requirements:
The home must be your primary residence.
You must have a valid certificate of eligibility from the VA.
Although the VA has no minimum credit score requirement, most lenders do.
Kentucky VA Mortgage Loan Benefits.
A Kentucky VA loan begins with one important distinction: relaxed credit-qualifying standards in regards to credit scores, past bankruptcies and foreclosures
VA has no minimum credit score requirement, lenders often require scores of at least 580 A few lenders will approve loans with credit scores as low as 500 in some cases .2 year removed from bankruptcy and foreclosure is required too with a clear Cavirs number.
THE MAJOR BENEFITS of a Kentucky VA mortgage are as follows:
$0 down payment unless the purchase price is more than the appraised value of the property or it’s higher than the local VA loan limit.
Mortgage rates are typically lower than rates on conventional loans.
No mortgage insurance is required monthly, just upfront funding fees.
You can reuse your VA loan benefit.
You don’t have to be a first-time home buyer.
VA-backed loans can be assumable — this means they can be taken over by someone you sell the house to, even if that person isn’t a service member.
A bankruptcy discharged more than two years ago — and in some cases, within one to two years — will not preclude you from getting a VA loan.
Types of Kentucky Mortgage VA loans
Home purchase in Kentucky: A Kentucky VA loan can be used to buy an existing home or a condominium in a VA-approved development, or to build a home.
Cash-out refinance in Kentucky: A VA cash-out refi replaces your mortgage with a new loan, while tapping some of your home’s value for things like paying off debt or making home improvements. It also can be used to replace a non-VA loan with a VA loan.
Interest rate reduction refinance loan or rate and term: A VA IRRRL (which is pronounced “Earl”) is also called a streamline refinance loan. You can replace an existing VA loan with a mortgage offering a lower interest rate, or move from an adjustable-rate loan to one with a fixed interest rate. Usually no appraisal or income documentation is needed for most IRRRL Refinances saving you a lot of money and qualifying headaches on a refinance
Kentucky VA loan fees for Funding Fees.
Although mortgage insurance isn’t charged on Kentucky VA loans, a “funding fee” serves the same purpose: to help lenders defray the expenses of foreclosing on borrowers who default. The fee ranges from 1.25% to 3.3% of the loan balance, depending on your down payment, branch of the military and whether or not it’s your first time getting a VA loan.
The VA funding fee can be rolled into your total loan package, but that will likely raise your interest rate and will absolutely raise your monthly payment.
Though a down payment is not generally required, putting 5% or more down will reduce your VA funding fee. And a down payment will lower your monthly payment, too.
Did you know that VA considers childcare expenses a debt?
VA has given guidance that Borrowers with children age 12 and under must complete and sign a “Child Care Letter”. The lender must obtain the letter from the veteran documenting the childcare expense or detailing why no expense is incurred. Ensure that the current daycare provisions will remain logical based on the location of the new home. If applicable, the name and address of the childcare provider, should be obtained. This expense should be listed under section D, line 29, “Job Related Expense (e.g., child care)” on the VA Loan Analysis.
A “VA Child Care Expense Certification” form can be found on the Fairway website under “Forms & Documents” or by clicking here: VA Child Care Expense Certification
Kentucky VA Guidelines After Bankruptcy And Foreclosure On Waiting Period After Foreclosure
Kentucky VA Loans only have a two year mandatory waiting period after foreclosure, deed in lieu of foreclosure, or short sale for a Veteran to qualify for a Kentucky VA Loan.
Kentucky VA Guidelines After Bankruptcy And Foreclosure On Waiting Period After Chapter 7 and 13
- There is a two year mandatory waiting period to qualify for a VA Loan after a Chapter 7 Bankruptcy discharged date and 1 year for A Chapter 13 Bankruptcy
Kentucky VA Loan Process
A list of items needed for underwriting is provided to the buyer based on the buyer’s scenario. Based on the borrower’s scenario, the process is explained which includes the items discussed below such as the VA certificate of eligibility (COE), DD-214, income verification, and more.
How to Get a VA Loan Certificate of Eligibility
How to Apply for a VA Home Loan Certificate of Eligibility (COE)
The first step in getting a VA direct or VA-backed home loan is to apply for a Certificate of Eligibility (COE). This confirms for your lender that you qualify for the VA home loan benefit. Find out how to apply for a COE. Then, choose your loan type and learn about the rest of the loan application process.
How do I prepare before starting my application?
Gather the information you’ll need to apply for your COE. Click on the description below that matches you best to find out what you’ll need:
- Current or former activated National Guard or Reserve member
- Current member of the National Guard or Reserves who has never been activated
- Discharged member of the National Guard who was never activated
- Discharged member of the Reserves who was never activated
- Surviving spouse of a Veteran who died on active duty or who had a service-connected disability
How do I apply for my COE?
You can apply online right now.
You can also apply:
Through our Web LGY system
In some cases, you can get your COE through your lender using our Web LGY system. Ask your lender about this option.
To apply by mail, fill out a Request for a Certificate of Eligibility (VA Form 26-1880) and mail it to the address listed on the form. Please keep in mind that this may take longer than applying online or through our Web LGY system.
Download VA Form 26-1880.
Next steps for getting a VA direct or VA-backed home loan
Applying for your COE is only one part of the process for getting a VA direct or VA-backed home loan. Your next steps will depend on the type of loan you’re looking to get—and on your lender (for most loans, the lender will be a private bank or mortgage company; for the Native American Direct Loan, we’ll be your lender).
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. Refinancing an existing loan may result in total finance charges being higher over the life of a loan. Reduction in payments may reflect a longer loan term. Terms of any loan may be subject to payment of points and fees by the applicant Equal Opportunity Lender. NMLS#57916http://www.nmlsconsumeraccess.org/
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