Friday, April 14, 2017

Kentucky First Time Home Buyers Do's and Dont's In Getting A Mortgage Loan Approval Letter in 2017

Kentucky First Time Home Buyers Do's and Dont's In Getting A Mortgage Loan Approval Letter in 2017

1- Do NOT buy a car or take a large loan with a new payment before you plan to buy a house if you can avoid it. At least get pre-approved to buy a house BEFORE you buy the car so that you are fully educated on what your max car payment should be to still be in position to buy a house and get approved. Yes, even if you don't think you are buying a house for another year it is still important to educate yourself that far in advance if you feel that you will be taking on new debt (car loan, credit card, etc) I continue to see younger home buyer prospects with $500 car payments and then want to buy a house for the first time but can't get approved because of debt to income ratio.
2- Know your credit and manage it. Don't wait until 2 months before you want to buy to get pre-approved if you have NEVER been pre-approved before. Too many times do I get the call that my lease ends in 2 months and I'd like to buy but have no clue about my credit, my budget and what i can afford, etc. Be prepared and be proactive. Call your loan advisor well in advance so you can understand where you stand, what programs you qualify for, OR what you need to do to get yourself in position to qualify.
3- Credit card management - This is a rehash from 2016 but I could/should post this every week because this is something that can really help/hurt people and you don't even know it. This applies to ANYONE reading this long winded message!!
*** Keep your credit card balances at 35% OR below of the total credit limit ***
- So for example, if you have a credit card that has a $1,000 limit, your goal is to NEVER let the balance exceed $350.00 if possible. This shows the credit bureaus that you are utilizing your credit, managing your credit, and not maxing out your debt because you can't manage your finances. This is a HUGE boost to credit scores.
- For you folks that are younger or don't have much credit history - If you are that person that pays your FULL balance each month, I'd encourage you to pay about 90-95% of the balance and let a tiny balance to roll over. That way you are carrying over credit and still managing it. Interest on $25 is nothing and the long standing effect of building your credit far outweighs paying a couple of bucks towards interest.
- Say you owe $750 on a $1,000 limit card....and you don't have the funds to pay it down to $350, then try calling your credit provider and asking them if they will increase your limit. Increasing the limit will give you more capacity on the card and get you closer to that 35% ratio and it will help you. So in this case, say you called the credit company and asked them to approve your limit up to $2,000. If they agree, your ratios are close to the 35% and you will start to reap immediate benefits from that.
********* Now with that being said, if you can't manage your budget, you are a compulsive buyer, and you don't trust yourself, do NOT do this. This is only for people that know they can resist, not use the card, and help increase their credit score. **********
Well that's more information than 1 post can handle but these are all VERY relevant issues/topics here!!! If you have questions about this or anything else, I HIGHLY encourage you to reach out and ask. If you want to buy a house and have it go smooth, fun, stress free, then do some homework upfront if you don't know. I promise that you won't be sorry.
Feel free to email me or call me if you have questions about these issues or any other issue (collections, bankruptcy, short sale, foreclosures, credit items in dispute, change in income from Base to commission, Self-employment timeframes on how long you need to be self employed to buy a house, etc)


Joel Lobb
Senior  Loan Officer

text or call my phone: (502) 905-3708
email me at
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