Kentucky VA Refinance Guidelines

Kentucky VA Refinance Guidelines
RATE/TERM REFINANCE		Anything being paid off other than a first mortgage lien is considered cash out. Buyout of spouse’s equity per divorce decree. Borrower may not receive more than $500.00 cash at closing. Total loan amount is limited to 90% LTV plus Funding Fee. No refinances are allowed within 6 months of the property being listed for sale. 0x30 payment history required over the previous 12 months. For limited cash out or rate/term refinances, any non‐mortgage debts, collections, judgments or liens that are to be paid off must be paid prior to closing in order for the transaction to be considered as a limited cash out or rate/term refinance. Platinum Mortgage will require evidence the debt was paid and proper documentation for the source of funds used to pay the debt. This is required regardless of the amount of funds that borrower may be bringing to close. Any transactions where any of the above items are to be paid at close will be considered as cash out refinances and the loan will have to meet cash out refinance guidelines.
INTEREST RATE REDUCTION REFINANCELOAN (IRRRL)		Primary Residence refinances only; Non-owner occupied and second homes are not eligible. Must be refinancing a current VA insured mortgage. All borrowers on previous Note must be on new Note. Maximum term is term of the original loan plus up to 10 years not to exceed 30 years. Subordinate financing may remain at max 125% CLTV.  Subordinate lender must agree to re-subordination. A credit report and 660 minimum credit score is required but sections V, VI and a-k of VIII of the application are not required to be completed. As of December 1, 2010, employment information for the borrower(s) is now required to be completed on the loan application (Section IV). No income amount or income information is required. Only a Verbal VOE will be completed. Minimum 2055 conventional appraisal is required. (DO NOT ORDER THROUGH VA) Appraisal be ordered through an acceptable  AMC and must meet HVCC requirements. (See Announcement 10-39). Appraisal report must meet generally accepted conventional guidelines, lender review and including but not limited to USPAP requirements. Any repairs that impact safety, livability, or habitability must be completed. The property condition must be rated “average” or better. Ratings of “fair” or less are not acceptable. The total loan amount (base loan amount + VA funding fee = Total loan amount) must be supported by the value of the property. Appraised value must be equal to or greater than the total loan amount. Max LTV/CLTV is 100%. ·         Employment and Income documentation is not required. ·         Borrower may not receive more than $500.00 cash at closing. ·         No refinances are allowed within 6 months of the property being listed for sale. ·         0x30 payment history required over the previous 12 months. ·         Borrower must have made a minimum of 6 payments on current mortgage with 0x30 pay history to be eligible for VA IRRRL. ·         Borrower must credit qualify if: o    New P&I increases more than 20% over previous Note P&I when the mortgage term is reduced or when refinancing from an ARM to a Fixed rate. o    New P&I increases more than 20% over previous Note P&I on a primary residence or when a borrower is removed from the Note.
CASH OUT REFINANCE		Total loan amount is limited to 90% LTV plus Funding. ·         No refinances are allowed within 6 months of the property being listed for sale. ·         LTV is based on the lesser of the appraised value or acquisition cost on properties with less than 6 months ownership seasoning. ·         0x30 payment history required over the previous 12 months. ·         Not eligible if property is owned free-and-clear.
NET TANGIBLE BENEFIT TEST (INDEX)
ELIGIBILITY		Every refinance loan submitted to Platinum Mortgage will be checked to ensure a valid Net Tangible Benefit to the borrower. The following are valid Net Tangible Benefits for the purpose of this policy: Reduction in monthly payment and/or cash out at closing must be sufficient to recoup the borrower’s closing cost and discount points within 84 months.  Cash out at closing would include any consumer debts paid from loan funds at closing.  Prepaids are not included as a cost of refinancing. Refinance transactions from an Adjustable Rate Mortgage or a Balloon Mortgage to a Fixed Rate. Reduction in loan term based on remaining term of current loan. Court-ordered refinances; i.e. divorce.
MORTGAGE INSURANCE COVERAGE (INDEX)
VA GUARANTEE / CERTIFICATE OF ELIGIBILITY		All loans must have a minimum of 25% guaranty (cash down payment plus veteran’s entitlement). The entitlement for loan amounts less than $144,000 is $36,000 less any prior usage shown on the Certificate of Eligibility (COE). The entitlement for loan amounts greater than $144,000 is $104,250 less any prior usage shown on the Certificate of Eligibility (COE). If the veteran does not have full entitlement due to prior claim paid by VA (foreclosure or short sale) then the loan is not eligible with Platinum Mortgage until the claim amount is repaid in full to VA and VA restores their entitlement.
VA FUNDING FEE		Funding Fee may be waived for disabled veterans.
VA JUMBO PROGRAM (INDEX)
PROGRAM CODE		Rate lock confirmation must be locked under these codes to receive correct pricing. ·         VF30J – 30 year fixed rate Jumbo Program only
VA JUMBO PROGRAM		·         The VA Jumbo Program is for total loan amounts that exceed $417,000. Total loan amount is the base loan amount + VA funding fee. To be eligible, borrowers must meet all VA and Platinum guidelines as well as the guidelines below.
MAX LOAN AMOUNT		Max total loan amount allowed is $650,000.
MAX LTV		·         Purchases up to 100%/100% LTV on loan amounts up to $650,000 (Including financed VA funding fee) are allowed as long as the VA Guaranty plus the veteran’s down payment and/or equity equal 25% of the lesser of the sales or notice of value (NOV). ·         Rate/Term and Cash-out refinance transactions are limited to 90%/90% LTV/CLTV of the property value shown on the CRV or NOV as long as equity plus VA Guaranty equals at least 25% of the NOV.
MINIMUM CREDIT SCORE		Minimum FICO score = 720
HOUSING HISTORY		No housing payments 30 days or more past due in the last 12 months.
DEBT RATIO		41% – May be exceeded up to 45% max with AUS approval
RESERVES		·         Minimum 6 months PITI reserves are required. ·         Cash out received from transaction cannot be used to meet the minimum reserve requirements.
VA GUARANTY		Regardless of loan amount, the VA Guaranty plus cash/equity must be equal to a minimum 25% of the purchase price or value, whichever is less on purchases and non-IRRRL refinances.
ELIGIBLE PROPERTY TYPES		·         Primary Residence only. ·         Single family residence, PUD or VA approved condominiums only.
APPRAISAL REQUIREMENTS		VA required appraisal only.
SECOND REVIEW		All VA Jumbo loans are subject to second level management review prior to loan being cleared to close.