Common Questions from First-Time Homebuyers in Kentucky
By Joel Lobb, Kentucky Mortgage Broker (NMLS 57916)
Why should I buy instead of rent?
Buying a home creates long-term financial stability. When you rent, all of your payment is gone each month. When you own:
- Your payment helps build equity over time
- You may be able to deduct mortgage interest and property taxes
- Your home may appreciate in value
- You control the property, updates, and improvements
For many families in Kentucky, owning a home is one of the strongest wealth-building moves they can make.
What are HUD homes, and are they a good deal?
HUD homes are properties that were previously FHA-insured and went into foreclosure. After foreclosure, HUD sells them at market value.
They can be a good deal, especially for first-time buyers, but:
- They are usually sold as-is
- They may require repairs or updates
- You must use a HUD-registered real estate agent to submit your bid
If you are comfortable with repairs and want potential value, HUD homes can be an opportunity.
Can I buy a home if my credit is not perfect and I do not have a big down payment?
Yes. Many Kentucky buyers qualify even with past credit issues or limited savings. Helpful programs include:
- FHA loans with down payments as low as 3.5 percent
- VA loans with zero down for eligible veterans and service members
- USDA Rural Housing loans with zero down in eligible areas
- Kentucky Housing Corporation (KHC) down payment assistance
If your credit needs improvement, I can create a step-by-step plan to help you qualify.
Are there special programs for single parents?
Yes. Single parents in Kentucky often qualify for:
- FHA loans with flexible guidelines
- USDA zero-down options in eligible rural areas
- KHC down payment assistance or grants when available
- Local city or county housing programs, depending on location
Getting prequalified early helps you understand your true price range and strengthens your offers.
Should I use a real estate agent?
Yes. A strong buyer’s agent is a major advantage and does not cost you anything as a buyer. The seller usually pays the commission.
A good agent can help with:
- Researching neighborhoods and schools
- Evaluating property values
- Writing and negotiating offers
- Coordinating inspections and repairs
- Managing deadlines from contract to closing
If you need a trusted agent in Louisville, Lexington, Northern Kentucky, or rural areas, I can refer you to experienced professionals.
How much money do I need to buy a home in Kentucky?
The amount varies by loan type and purchase price, but you will usually need funds for three items: earnest money, down payment, and closing costs.
Typical ranges:
- Earnest money: 500 to 1,500 dollars in most markets (500 to 2,000 dollars for HUD homes)
- Down payment:
- Zero percent for VA or USDA loans
- About 3 percent for many conventional loans
- 3.5 percent for FHA loans
- Closing costs: usually 3 to 4 percent of the purchase price
Seller credits and KHC assistance can often cover part or all of your closing costs and even some of the down payment.
How do I know if I can get a loan?
The best first step is a prequalification. I will review your income, employment history, credit, current debts, and available funds for closing. If you are not ready yet, I can outline exactly what to work on and how long it may take to qualify.
How do I find a lender?
As a Kentucky mortgage broker, I work with multiple lenders and programs to help you compare rates, fees, and guidelines. I handle FHA, VA, USDA, KHC, and conventional loans and guide you from application through closing, so you do not have to shop lenders on your own.
What other costs besides the mortgage payment should I consider?
In addition to principal and interest, you should budget for:
- Property taxes
- Homeowners insurance
- HOA or condo association dues, if applicable
- Utilities such as electric, gas, water, sewer, and trash
Most of my clients have taxes and insurance included in their monthly mortgage payment, which helps with budgeting.
What does my mortgage payment include?
Most Kentucky homebuyers have a monthly payment that includes:
- Principal: reduction of the loan balance
- Interest: cost of borrowing the money
- Property taxes: often escrowed and paid by the lender
- Homeowners insurance: usually escrowed
- Mortgage insurance when required by the loan program
I will show you how each part of the payment is calculated and how it changes over time.
What documents do I need when applying for a mortgage?
Having your paperwork ready can speed up approval. Most borrowers will need:
- Social Security numbers for all applicants
- Last 30 days of pay stubs
- Last 2 months of bank statements
- Last 2 years of W-2s and federal tax returns
- A list of debts, including credit cards, auto loans, and student loans
- Employer names, addresses, and contact information
Self-employed buyers may also need business tax returns and a year-to-date profit and loss statement.
How do I choose the best loan type for me?
The right loan depends on your credit score, down payment, location, and long-term plans. We will compare:
- FHA loans
- VA loans
- USDA Rural Housing loans
- Kentucky Housing Corporation programs
- Conventional loans from Fannie Mae and Freddie Mac
Each option has different down payment requirements, mortgage insurance rules, and credit guidelines. I will walk you through the pros and cons of each program so you can choose confidently.
How much should I offer on a home?
Your real estate agent will help you evaluate:
- Recent sales of similar homes
- Condition and updates needed
- How long the home has been on the market
- Current competition from other buyers
- Your approved price range and loan type
In a competitive Kentucky market, you may need to offer full price or more, ask for fewer concessions, or shorten timelines to make your offer stand out.
What happens if my offer is rejected?
This is common, especially in a tight market. You and your agent can:
- Adjust the price
- Change closing dates
- Negotiate closing cost credits
- Ask for or remove certain repairs or contingencies
Offers often go back and forth several times before both sides agree. Stay focused on what you can truly afford and what works for your long-term goals.
What happens at closing?
At closing, you meet with the title company and sign all final documents:
- Closing Disclosure
- Mortgage note
- Deed and title documents
- Final loan paperwork
Your funds for down payment and closing costs are collected, and once everything is signed and funded, you receive the keys to your new home. I review the numbers with you ahead of time so there are no surprises.
Ready to buy your first home in Kentucky?
I specialize in helping Kentucky first-time buyers navigate FHA, VA, USDA, KHC, and conventional loans from start to finish.
Call or text: 502-905-3708
Website: www.mylouisvillekentuckymortgage.com
This is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines, and property requirements. Programs, rates, and guidelines are subject to change without notice. Equal Housing Lender. NMLS 57916.
