Fannie Mae Guidelines
Being in the mortgage industry, there are many guidelines I have to follow. These guidelines are always changing, sometimes for the worse and sometimes for the better. Fannie Mae recently made some big changes to their guidelines, which will have a big impact on many people looking to get a home loan. Read on to find out how these changes affect you.
Student Loans
In the past, lenders had to use either 1% of the loan balance or the actual monthly payment, whichever was higher, when qualifying a person. It’s often that people with student loan debt will have an income based repayment plan and in the past they may not have qualified for a home loan. Now, the guidelines allow us to use the monthly payment that shows up on the credit report. Therefore, if you are in a income based repayment you may now qualify for a home loan!
Student Loan Cash Out Refinance
The new guidelines allow you to refinance your home to pay off your student loan debt without taking an interest rate hit. This only works for student loans that you are obligated, and they must be paid off in full.
Debts Paid by Others
If you’ve ever cosigned for someone on a loan you know how difficult it can be to qualify for your own. Now, if we can prove that loan is paid by someone else we don’t have to count it against you. All we need is to prove that the other person has been paying the loan for the last 12 months. This even works for loans that only you are on, but someone else pays.
Property Eligibility Review Waiver
If you currently have a Fannie Mae loan and want to do a rate/term refinance you won’t need a review of the property. So, if you own a condo and it will no longer meet Fannie’s guidelines you can still refinance. If you are in a condo this could be a big deal.
Properties Listed for Sale in Previous Six Months
Previously, you could not refinance a home that had been for sale in the last 6 months. However, as long as the property is off the market by the time the loan funds, you are good to go.
Truncated Asset Account Numbers
It’s a big word, but in most asset statements the account numbers are truncated or shortened. Before, we had to get the entire account number to use the asset. But now we can use the shortened number, this makes it easier on everyone, and your information stays private!
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