KENTUCKY VA HOME LOANS

Kentucky VA loans require little to no money down. Also, you will not pay a monthly mortgage insurance premium (MIP) or an upfront fee like you would with a conventional, low-down-payment home loan.

The VA does not have a private mortgage insurance (PMI) requirement.

Kentucky VA Loan Eligibility Requirements

Only certain veterans and their spouses qualify for VA-backed mortgages. The good news is the qualifications are not as strict as you think. Here are the VA’s eligibility requirements:

• Active-duty service for 181 days during peacetime
• Active-duty service for 90 consecutive days during wartime
• Member of the Reserves or National Guard for six consecutive years
• Married to a veteran who died as a result of a service-connected disability or in the line of duty

Remember that it is ultimately up to the lender to decide to give you a loan. You will still need to meet certain requirements outlined by the bank or mortgage company.

Basic and Bonus Entitlement

The VA refers to your eligibility to borrow money using a VA-backed mortgage as your basic and bonus entitlement. The word “entitlement” is another word for insurance. However, your basic and bonus entitlement are not the same, but you can use them at the same time. Here is how they work:

When you receive your certificate of eligibility (COE) from the VA, it will show you are eligible for $36,000 in basic entitlement. Fortunately, the $36,000 on your COE is not the maximum amount you can borrow. The figure is how much the VA will pay if you default on your loan.

Most banks and mortgage lenders will lend you up to four times your basic entitlement, which is $144,000 ($36,000 x 4 = $144,000). So, using your basic entitlement, you can borrow up to $144,000 to buy a home. You might be thinking $144,000 is not enough to buy a home in most places, and you are right. This is where your bonus entitlement kicks in.

Kentucky VA Home Loan Refinance Information

You can use your VA home loan entitlement for more than just buying a house. You can use it to reduce the interest rate on an existing loan (known as an IRRRL), or you can take out some equity in your home with a 90% to 100 percent cash-out refinance.

Additionally, you can use a VA home loan more than once as long as you have not used all of your basic and bonus entitlement. Now that you know the facts behind VA mortgages, you should comfortably find the loan program that fits your needs.

 

Veterans Administration (VA) loans are a popular benefit of military service, thanks to competitive interest rates and little-to-no down payment needed. Though these loans are backed by the VA, they aren’t government loans. In other words, they are still offered through private lenders.

Eligibility

It’s important to understand that the requirements do vary. Factors weighed are whether you’re a veteran or currently on active duty, the era in which you served and whether you served or are serving in the National Guard or Reserve.

General markers:

• Current active-duty members are eligible after 90 continuous days of service.
• Veterans serving after Aug. 2, 1990 are eligible if they served for 24 continuous months.
• Guard members and reservists are eligible after 90 days of active service or six years of Guard and Reserve service.

Also eligible are spouses (in a few special circumstances), military academy cadets and individuals who served in certain government organizations. For full eligibility details, go to the VA website.

Certificate of Eligibility

When applying for a VA loan, you’ll need a Certificate of Eligibility (COE). This is usually easy to obtain as most lenders have access to a website to rapidly establish your eligibility and produce a COE. It is possible to contact the VA directly for a Certificate of Eligibility, though this process can take weeks.

You’ll need the Certificate of Eligibility any time you apply for a VA loan.

Financial Consideration

Even with a Certificate of Eligibility, your approval for a VA loan is not guaranteed. There are financial markers set by the VA that you will need to meet, and your lender will likely also have a minimum credit score requirement. However, it is still possible to get a VA home loan with low credit scores.

One of the guidelines is your debt-to-income ratio.  This is your monthly debt payments in relationship to your monthly income. The ratio is determined by dividing your total monthly debts (including the mortgage, car loans, student loans and minimum payments on credit cards) by your monthly income before taxes. This is also known as your “gross income.”

Your residual income should also be considered. Residual income is the minimum amount of money the VA thinks you should have after taxes are withheld, and your debt payments have been made.

The residual income requirement varies. Depending on where you live, lenders adjust for certain factors such as proximity to a military base with access to tax-free shopping.

 

Funding Fee

One perk with VA loans is that they don’t require monthly private mortgage insurance (PMI), even with down payments under 20%. However, VA loans do involve a “funding fee.” Exemptions are possible if you get VA compensation for a service-connected disability.

The size of the funding fee varies from 1.25% to 3.6% of the amount you’re borrowing. Things that influence the fee include:

• The size of your down payment.
• Whether you served in active-duty military, or the Guard and Reserves.
• Whether you’ve used your VA loan eligibility before.

Regular Military

Down Payment	Fee for First Time Use of VA Loan	Fee for Additional Use
Down payment:None	Fee for first time use of V A Loan:2.15%	Fee for additional use:3.61%
Down payment:5% to 9.9%	Fee for first time use of V A Loan:1.50%	1.50%
Down payment:10% or More	Fee for first time use of V A Loan:1.25%	Fee for additional use:1.25%

Reserve or National Guard

Down Payment	Fee for First Time Use of VA Loan	Fee for Additional Use
Down payment:None	Fee for first time use of V A Loan:2.40%	Fee for additional use:3.60%
Down payment:5% to 9.9%	Fee for first time use of V A Loan:1.75%	Fee for additional use:1.75%
Down payment:10% or More	Fee for first time use of V A Loan:1.50%	Fee for additional use:1.50%

 

The funding fee is paid at closing or by adding it to the amount you’re borrowing. If you roll the fee into the loan, remember it becomes more expensive over time because of interest. If you decide not to make a down payment, you’ll also owe more than your home is worth initially. This can be a challenge if you need to sell the property before enough equity is built.

KENTUCKY  VA LOAN FEATURES

✓ Up to 100% financing available**

✓ No monthly private mortgage insurance

✓ Seller concessions up to 4% of the reasonable value of the property

✓ Credit scores as low as 580 FICO in Kentucky

✓ Must be a veteran, active duty or reserve member to be eligible

✓ Manufactured homes allowed

✓ 90% cash out refinance available

✓ Non traditional credit

✓ Consistently one of the top 5 Kentucky loan officers 0

✓ Has helped hundreds of VA families find their home in Kentucky

✓ Personal ties to veterans and active duty members and former Army Tanker that has a VA loan and done over 200 Kentucky VA loans.