Canton MA Events and Real Estate

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Fannie Mae Guidelines Change Monday. Apply Today To Lock In To “Old” Rules.

Below is an important reminder from Chik Quintans about upcoming changes to Fannie Mae guidelines.  On the up side, they are making the process for using "gift" funds easier.  On the down side, changes with respect to revolving debt may make it more difficult for some buyers to get approvals.  As suggested in the article, if these changes will affect a buyers ability to get approved, it may make sense to complete that application today.  If that is not practical, it may make sense to contact your mortgage lender today to discuss how these changes will affect you.

If you are buying in the Canton MA area and need a referral to a mortgage lender, I would be happy to assist you, so feel free to contact your Canton MA Buyer Broker at any time.

 

Fannie Mae rolls out new mortgage guidelines Monday. Therefore, if you’re in the process of applying for a conforming home loan, consider giving your complete application by the close of business Friday.

All Fannie Mae applications taken on, or after, December 13, 2010, are subject to the changes.
As compared to mortgage guidelines updates of the last 3 years, Monday’s roll-out is relatively small. There is no change to the maximum debt-to-income ratio, for example; nor is there an increase in the minimum FICO score requirement.

Most mortgage applicants in Washington State and nationwide will be unaffected.

Others, however, will find getting approved to be more difficult.

The most major change is with respect to revolving and installment debt. This category includes credit cards, charge cards, and student loans, among others. Going forward:

  1. 1.Debt with fewer than 10 payments remaining must now be included in an applicant’s monthly obligations.

  2. 2.Debt not reporting a monthly payment must be assigned a payment equal to 5% of the outstanding credit balance.

These edits will raise applicants’ debt-to-income ratios, and may push some of them beyond the maximum allowable limits, resulting in a denial. People with relatively large car payments are especially susceptible.

Another change relates to receiving gift funds for a purchase. Unlike debt calculations, though, the “gifting” process is getting easier.

Under the new Fannie Mae guidelines, buyers of owner-occupied, 1-unit properties (i.e. single-family homes, condos, townhomes) can forgo Fannie Mae’s customary, minimum 5% downpayment contribution from personal funds. Downpayments can be comprised 100 percent of gifted and/or granted monies.

Buyers of second or investment homes, or multi-unit properties must still make a 5% downpayment from their own funds.

And, lastly, Fannie Mae is easing some of its documentation requirements. Salaried applicants from whom commissions and/or bonuses paid account for less than 25% of annual income will have fewer paystubs to produce for underwriting.

Fannie Mae’s complete guideline changes are available online at http://efanniemae.com.

Image c/o ecomparison.co.uk

If you have any questions, you can call me at 425.771.2095, email at chik@teamcq.com. 

You are also welcome to follow me on at http://twitter.com/chikquintans and join the conversation anytime.

Please let me know your thoughts in the comment section below.

 

Certified Mortgage Planner | Asst. Sales Manager

mailto:chik@teamcq.com   Tel: 425.771.2095 | Toll Free: 866.428.1383 | Fax: 206.260.8000 | National Lic: MLO-86133

 
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The content provided on this blog is presented or compiled for your convenience and is provided for informational purposes only. The information provided on this website should not be construed as offering legal, financial or other advice to be relied on by the reader to make or refrain from making any decision or to take any action. 

 

Christine Smith is an Attorney and Exclusive Buyer Agent with over 25 years of experience in the real estate field. 

 

(c) Copyright 2010-2015 Christine M. Smith, Attorney and Buyer Agent. All rights reserved.

Comment balloon 0 commentsChristine Smith • December 10 2010 09:37AM

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