Financing Tips
How far will your money go in Kentucky?
- Calculator - Use this handy calculator to compare your salary and living expenses against those in Kentucky. We think you’ll be pleasantly surprised.
How much house can you afford?
- Calculator - To arrive at an "affordable" home price, this calculator followed the guidelines of most lenders. We've allowed a total debt-to-income ratio of no more than 36 percent. And we have assumed a housing payment-to-income ratio of 28% for our conservative estimate, and 33 percent for the aggressive one. Before buying, however, you should also factor in other savings needs, including retirement and college.
What will your mortgage payment be?
- Calculator - Assumes average annual homeowners insurance premiums of $900. The total cost also includes average private mortgage insurance (PMI)of $90 a month. National average mortgage rates provided by Bankrate.com
Check the housing market in your local area?
- Calculator - 384 markets were tracked. After 2013's big gains, home prices are expected to moderate this year. CoreLogic Case-Shiller expects prices to increase by the mid-single digit percentages for the 12 months through September. See how your market is expected to fare.
Home improvement
- You can find home improvement calculators on-line. Although these calculators can provide you with fun and information, remodeling estimates are very dependent upon the local markets and the individual job. One should use the figures from these calculators as a “starting point” only in setting a budget. Only with the knowledge and experience of a professional can you get an accurate estimate for remodeling projects. Call us to help you with that calculation.
Loans
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Construction and Permanent Loans - A construction loan is basically a short term line of credit loan that is “paid off” upon completion of the project when the loan is “taken out” in the form of permanent financing. The main thing construction loan lenders need to know is that you have a lender set to take out the construction loan in full upon completion of the project. Most banks will offer both construction and permanent home loans.
- Lot Loans - A Lot Loan is to finance the purchase of a residential lot for future construction of your primary residence or second home. When you are ready to build, you may have the lot paid for or may roll this loan over into the permanent home loan.
- Bridge Loans - Don’t wait to sell your old home before building your dream home. You can access equity in your current home to use as the down payment on a Construction-to-Permanent loan. However, you must be able to make the payments on both loans if your current home is not sold by the time you start payments on your new home.
- Remodeler Loans - Remodeler Loans are designed for the homeowner who is making a major improvement to their primary residence. This unique second mortgage calculates the value of the home by adding the value of the planned improvement to the home’s current value. You may be able to access construction funds at loan closing. That means more dollars are available to style your home.
What is prequalification?
- Prequalification is an estimate of what you may be able to borrow. It gives you an idea of what your loan program and the amount you can borrow look like in advance of your purchase. It prepares you for the home buying process and gives you a big advantage at different stages of your home-buying project. It allows you to set your expectations, strengthening your negotiating position and know when you can make an offer on a home or begin to plan a construction project.
Why get conditionally approved?
- A more serious step toward buying a home is getting a conditional approval for a loan. This means that the lender gives you in writing a commitment for a specific loan amount and loan program provided all the specified conditions are met. The lender is obligated to go through with the loan. However, you are free to walk away from this commitment before anything is signed if you change your mind. It will also give you a general idea of your interest rate and monthly payment information. It is important to note that while prequalification can give you an idea of what you could borrow, the amount you should borrow should never be more than what you can comfortably afford.
