J. Scott Harris – MortgageXperts.com

Call us 1st to AVOID mortgage problems, Call us 2nd to SOLVE them! We close loans every day that Banks would not, or could not approve. NMLS # 375517 – Mobile 214-435-8825

J. Scott Harris – MortgageXperts.com - Call us 1st to AVOID mortgage problems, Call us 2nd to SOLVE them!  We close loans every day that Banks would not, or could not approve. NMLS # 375517  – Mobile 214-435-8825

JUMBO LOANS – TINY DOWN PAYMENTS

How do you buy More of a home with LESS of a down payment?
 
We offer :
 
95% CLTV loans to $625,000 Purchase Price
90% Jumbo loans to $944,000 Purchase Price
90% CLTV loans to $1,666,666 Purchase Price
91% VA Jumbo Loans to $650,000 Purchase Price
85% VA Jumbo Loans to $1000,000 Purchase Price
 
In some case, your current home does NOT have to close simultaneously if it is on the market or under contract.
 
Get Pre-Approved and negotiate with the confidence and the negotiating power as if you are “Cash Buyer” with our Letter of Commitment.
 

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J. SCOTT HARRIS | BRANCH MANAGER
NMLS ID# 375517 (www.nmlsconsumeraccess.org)
(M) 214.435.8825 | (F) 866.343.3688
jharris@goldfinancial.com  www.goldfinancial.com  | Pre-Qualify Now

LinkedIn  |  Facebook  |  Twitter  |  JSH BLOG – News & Articles www.MortgageXperts.com

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885 E Collins Blvd Ste 110
Richardson, TX 75081

My Branch Closes FHA / VA & USDA Loans at 580+ in Texas, Oklahoma & Louisiana

Gold Financial Services is a Division of Amcap Mortgage, Ltd. NMLS #129122. Equal Housing Lender

J. Scott Harris is a Nationally Recognized Mortgage & Social Media Authority.

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TOP 4 REASONS FOR BUYING VS. RENTING A HOME

Although interest rates have increased, they are still at historic lows. Homeowners that purchased years ago with 6% and even 9% interest rates are thrilled to refinance during this time. With rents continuing to increase, there’s no denying that now is a great time to purchase a home. Here are four reasons why it makes more financial sense to buy a home.

1) Homeownership Builds Wealth Over Time
Most of us were taught growing up that owning a home is financially savvy. Although that confidence was shaken during the economical turbulence of recent years, real estate is still proving to be a great long-term investment.

2) You Build Equity Every Month
Your equity in your home is the amount of money you can sell it for minus what you still owe on it. Every month when you make a mortgage payment, a portion of what you pay reduces the amount you owe. That reduction of your mortgage every month increases your equity.

3) A Mortgage is Like a Forced Savings Plan
Paying your mortgage every month and reducing the amount of your principal is like having a forced savings plan. Each month, you are building up more valuable equity in your home.

4) In the Long Term, Buying is Cheaper than Renting
It’s easy to just renew your lease and continue renting when you consider the costs of purchasing a home. You might think, “It’s not worth the stress and depleting my savings account… I’ll just keep renting.”  However, as the interest portion of your mortgage payment decreases each year, you’re building equity and paying off more and more of your principal balance. Why continue to pay your landlord when you can be building wealth for yourself?!

Click Here to start your quick Free Credit Analysis & Pre-Qualify Now!

YOU CAN BUY A HOME, CALL US AND TAKE THE RIGHT STEPS.

Even if another Bank or Lender has said “NO,” we will work with you until we can say “YES.” If you have already started in our Qualification Coaching Program, call us, so we can check your progress!

Call us 1st to AVOID mortgage problems,
Call us 2nd to SOLVE them!

scott-circle
J. SCOTT HARRIS | BRANCH MANAGER
NMLS ID# 375517 (www.nmlsconsumeraccess.org)
(M) 214.435.8825 | (F) 866.343.3688
jharris@goldfinancial.com  www.goldfinancial.com  | Pre-Qualify Now

LinkedIn  |  Facebook  |  Twitter  |  JSH BLOG – News & Articles www.MortgageXperts.com

GoldEmailLOGO

885 E Collins Blvd Ste 110
Richardson, TX 75081

My Branch Closes FHA / VA & USDA Loans at 580+ in Texas, Oklahoma & Louisiana

Gold Financial Services is a Division of Amcap Mortgage, Ltd. NMLS #129122. Equal Housing Lender

J. Scott Harris is a Nationally Recognized Mortgage & Social Media Authority.

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Home Buying Myths Slayed

Some Highlights:

  • Interest rates are still below historic numbers.
  • 88% of property managers raised their rent in the last 12 months!
  • The credit score requirements for mortgage approval continue to fall.

We APPROVE FHA & VA Loans at 580+

 

 

The KEYS to your new home are within reach!
Click Here to start your quick Free Credit Analysis & Pre-Qualify Now!

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J. SCOTT HARRIS | BRANCH MANAGER
NMLS ID# 375517 (www.nmlsconsumeraccess.org)
(M) 214.435.8825 | (F) 866.343.3688
jharris@goldfinancial.com  www.goldfinancial.com  | Pre-Qualify Now

LinkedIn  |  Facebook  |  Twitter  |  JSH BLOG – News & Articles www.MortgageXperts.com

GoldEmailLOGO

885 E Collins Blvd Ste 110
Richardson, TX 75081

My Branch Closes FHA / VA & USDA Loans at 580+ in Texas, Oklahoma & Louisiana

Gold Financial Services is a Division of Amcap Mortgage, Ltd. NMLS #129122. Equal Housing Lender

J. Scott Harris is a Nationally Recognized Mortgage & Social Media Authority.

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If you are employed by a government or not-for-profit organization, you may be able to receive loan forgiveness under the Public Service Loan Forgiveness Program .

Learn more to see whether you might qualify.

The Public Service Loan Forgiveness (PSLF) Program forgives the remaining balance on your Direct Loans after you have made 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.

If you want to qualify for Public Service Loan Forgiveness now or in the future, complete and submit the Employment Certification form as soon as possible. Too many borrowers wait to submit this important form until they have been in repayment for several years, at which point they learn that they have not been making qualifying payments. In order to ensure you’re on track to receive forgiveness, you should continue to submit this form both annually and every time you switch employers.

What is qualifying employment?
What is considered full-time employment?
Which types of federal student loans qualify for PSLF?
What is a qualifying monthly payment?
What is a qualifying repayment plan?
How do I apply for PSLF?
Where do I send my Employment Certification form?
Where can I see how many qualifying payments I’ve made?
Who at my employer can certify my employment?
Will I automatically receive PSLF after I’ve made 120 qualifying monthly payments?

 

Student Debt load is becoming a HUGE impediment to new home ownership.

The Federal Student Aid website is the best place to learn about ways to consolidate or resolve your student loans.

https://studentaid.ed.gov/sa/

 

YOU CAN BUY A HOME, CALL US AND TAKE THE RIGHT STEPS.


Call us 1st to AVOID mortgage problems,
Call us 2nd to SOLVE them!

Click Here to start your quick Free Credit Analysis & Pre-Qualify Now!

scott-circle
J. SCOTT HARRIS | BRANCH MANAGER
NMLS ID# 375517 (www.nmlsconsumeraccess.org)
(M) 214.435.8825 | (F) 866.343.3688
jharris@goldfinancial.com  www.goldfinancial.com  | Pre-Qualify Now

LinkedIn  |  Facebook  |  Twitter  |  JSH BLOG – News & Articles www.MortgageXperts.com

GoldEmailLOGO

885 E Collins Blvd Ste 110
Richardson, TX 75081

My Branch Closes FHA / VA & USDA Loans at 580+ in Texas, Oklahoma & Louisiana

Gold Financial Services is a Division of Amcap Mortgage, Ltd. NMLS #129122. Equal Housing Lender

J. Scott Harris is a Nationally Recognized Mortgage & Social Media Authority.

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1 in 3 Make Offers on Homes Sight Unseen?

One in Three Recent Homebuyers Made an Offer Sight-Unseen—Up from Nearly One in Five a Year Ago.

 

Watch this short video from my friends Frank & Brian.

Written by Rachel Musiker on June 28, 2017

Click here for the full article.

 

YOU CAN BUY A HOME, CALL US AND TAKE THE RIGHT STEPS.

Even if another Bank or Lender has said “NO,” we will work with you until we can say “YES.” If you have already started in our Qualification Coaching Program, call us, so we can check your progress!


Call us 1st to AVOID mortgage problems,
Call us 2nd to SOLVE them!

Click Here to start your quick Free Credit Analysis & Pre-Qualify Now!

scott-circle
J. SCOTT HARRIS | BRANCH MANAGER
NMLS ID# 375517 (www.nmlsconsumeraccess.org)
(M) 214.435.8825 | (F) 866.343.3688
jharris@goldfinancial.com  www.goldfinancial.com  | Pre-Qualify Now

LinkedIn  |  Facebook  |  Twitter  |  JSH BLOG – News & Articles www.MortgageXperts.com

GoldEmailLOGO

885 E Collins Blvd Ste 110
Richardson, TX 75081

My Branch Closes FHA / VA & USDA Loans at 580+ in Texas, Oklahoma & Louisiana

Gold Financial Services is a Division of Amcap Mortgage, Ltd. NMLS #129122. Equal Housing Lender

J. Scott Harris is a Nationally Recognized Mortgage & Social Media Authority.

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New Cash-Out Refinance Loan for 580+ Credit Scores – Has the Bank Declined Your Equity Refi?

Rising Property Values are helping most everyone.

But, some homeowners have been caught in a Catch-22.  Low Credit Scores can be caused by having a lot of maxed out high interest rate revolving credit card accounts.

Most lenders require 680+ Credit Scores to Approve Cash-Out/Home Equity Loans.   But, Our Portfolio Cash-Out will allow for 580+ Credit Scores.

Here is a real life example:

Our client has almost $40,000 in revolving and installment debt that is depressing their credit score.  The combined monthly payment for all these accounts is over $1650 per month.

We can Approve their 80% LTV Cash Out loan and give them $50,000 to pay off all this debt as have some money in savings for emergencies.

Their mortgage payment only increases around $350 per month.

That is an immediate saving of $1,300 per month and will make a tremendous difference for their family.

If you are in a similar situation, or know someone who is, Please contact us for some debt relief!

 

 

Even if another Bank or Lender has said “NO,”
We will work with you until we can say “YES.”


Call us 1st to AVOID mortgage problems,
Call us 2nd to SOLVE them!

Click Here to start your quick Free Credit Analysis & Pre-Qualify Now!

scott-circle
J. SCOTT HARRIS | BRANCH MANAGER
NMLS ID# 375517 (www.nmlsconsumeraccess.org)
(M) 214.435.8825 | (F) 866.343.3688
jharris@goldfinancial.com  www.goldfinancial.com  | Pre-Qualify Now

LinkedIn  |  Facebook  |  Twitter  |  JSH BLOG – News & Articles www.MortgageXperts.com

GoldEmailLOGO

885 E Collins Blvd Ste 110
Richardson, TX 75081

My Branch Closes FHA / VA & USDA Loans at 580+ in Texas, Oklahoma & Louisiana

Gold Financial Services is a Division of Amcap Mortgage, Ltd. NMLS #129122. Equal Housing Lender

J. Scott Harris is a Nationally Recognized Mortgage & Social Media Authority.

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The Importance of Home Equity in Retirement Planning – REFI to a 15 year loan NOW

We often discuss the difference in family wealth between homeowner households and renter households. Much of that difference is the result of the equity buildup that homeowners experience over the time that they own their home. In a report recently released by the nonpartisan Employee Benefit Research Institute (EBRI), they reveal how valuable equity can be in retirement planning.

Craig Copeland, Senior Research Associate at EBRI, recently authored a report, Importance of Individual Account Retirement Plans and Home Equity in Family Total Wealth, in which he reveals:

“Individual account retirement plan assets, plus home equity, represent almost all of what families have to use for retirement expenses outside of Social Security and traditional pensions. Those families without individual account assets typically have very low overall assets, so they have almost nothing to draw from for retirement expenses.”

The report echoed the findings of a working paper, Home Equity Patterns among Older American Households, authored by Barbara Butrica and Stipica Mudrazija of Urban Institute. Fannie Mae highlighted these findings for their blog The Home Story this past winter, quoting Butrica and Mudrazija:

 “For most adults near traditional retirement age, a home is their most valuable asset — dwarfing retirement accounts, other financial assets, and other nonfinancial assets. Although relatively few retirees tap into their home equity, having it provides financial security… In fact, many retirement security experts argue that the conventional three-legged stool of retirement resources — Social Security, pensions, and savings — is incomplete because it ignores the home.”

USAToday interviewed two area experts to comment on the EBRI report. Randy Bruns, a private wealth adviser with HighPoint Planning Partners, agreed with the findings:

“Social Security and home equity are major pieces of the retirement puzzle.”

Wade Pfau, Professor of Retirement Income at The American College of Financial Services and author of Reverse Mortgages: How to use Reverse Mortgages to Secure Your Retirement, said having the equity without a plan to use it won’t help:

“Home equity is a very important asset for American retirees, and so it is important to think about how to make best use of home equity in retirement planning.”

Bottom Line

Whether you use the equity in your home through a reverse mortgage or by selling and downsizing to a less expensive home, it should be a crucial piece of your retirement planning.

 

YOU CAN BUY A HOME, CALL US AND TAKE THE RIGHT STEPS.

Even if another Bank or Lender has said “NO,” we will work with you until we can say “YES.” If you have already started in our Qualification Coaching Program, call us, so we can check your progress!

The KEYS to your new home are within reach!
Call us 1st to AVOID mortgage problems,
Call us 2nd to SOLVE them!

Click Here to start your quick Free Credit Analysis & Pre-Qualify Now!

scott-circle
J. SCOTT HARRIS | BRANCH MANAGER
NMLS ID# 375517 (www.nmlsconsumeraccess.org)
(M) 214.435.8825 | (F) 866.343.3688
jharris@goldfinancial.com  www.goldfinancial.com  | Pre-Qualify Now

LinkedIn  |  Facebook  |  Twitter  |  JSH BLOG – News & Articles www.MortgageXperts.com

GoldEmailLOGO

885 E Collins Blvd Ste 110
Richardson, TX 75081

My Branch Closes FHA / VA & USDA Loans at 580+ in Texas, Oklahoma & Louisiana

Gold Financial Services is a Division of Amcap Mortgage, Ltd. NMLS #129122. Equal Housing Lender

J. Scott Harris is a Nationally Recognized Mortgage & Social Media Authority.

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FHA condo rules will help millennials in housing market, Carson says

Relaxing FHA Condo rules & expanding FNMA Debt Ratios are 2 new enhancements to help 1st time buyers

 

SUGGESTED REMARKS FOR DR. BEN CARSON
SECRETARY OF HOUSING AND URBAN DEVELOPMENT
AT THE NATIONAL HOUSING SYMPOSIUM
WASHINGTON, D.C.
JUNE 9, 2017

As prepared for delivery. The speaker may add or subtract comments during his presentation.  (Original Article)

Thank you.  Last week, HUD hosted a housing policy forum where I spoke about the state of the housing market.  It is stable, secure, and sound.  The market is safe.  I want to emphasize that … we have a housing market that is in good shape.  Much of the credit goes to people in this room.

But, after the turbulence of 2008, we must remain vigilant and watchful –  and anticipate more than react.  We must be prudent and practical.  We must continue to maintain responsible lending practices.  Wishful thinking must not be our sole criterion for credit worthiness.   And as the economy improves, we must never ignore the central role of housing in the recovery from the 2008 recession.

Nationally, we must continue to smooth out the cycles that lead to burst bubbles and foreseeable foreclosures.  We want to avoid anyone going underwater on their mortgage or losing their home.

There is always room for improvement, more stability, more growth. We still see small fluctuations in the market, but the dramatic highs and lows of the past have evened out to become steady, almost predictable. The data now shows a reasonably straight and rising line forward and upward on the charts.  The cycles have become less dramatic.  And, we are seeing good news in startups and inventory, among the many sides of homeownership.

The homeownership rate today is at 63.6 percent.  In some states, homeownership is over 70 percent.  And first-time home buyers make up 35 percent of all homebuyers in the last twelve months.  This good news will continue.  The Harvard Joint Center for Housing Studies projects that the United States will add 13.6 million households over the next eight years and 11.5 million more between 2025 and 2035.

The Federal Housing Administration has a strong role to play.  FHA has already helped more than 46 million Americans purchase or refinance their homes.  An estimated 40 percent of all first-time homebuyers use FHA.  In fact, during our time here together … today … FHA will help another 4,000 homebuyers close on their homes.

However, this good news hides one story … the housing market is becoming a lost dream for some Millennials.    We must create a viable entryway for more credit-worthy Millennials.    Millennials who are first-time homebuyers feel frozen out.  There is some new data from Ellie Mae, showing in January that 35 percent of all FHA loans were closed by Millennials.  That is FHA.

But, I worry because there are reports from California, from the state legislature, that only about 13 percent of Millennials buy a home.  Thirteen percent!

Most agree it is low.  Historically low!

Why?  Well, the high prices of homes escalate out of reach, for some.  This is especially true in places with a high cost of living:  New York City, Los Angeles, and Washington, D.C.  Some of them confront stark choices.  Some see wages absorb 40, 50, 60 percent of housing costs.  The potential becomes a Catch-22.  You either become house poor through a potential mortgage, if you can get one, and sacrifice other aspects of life, or you forego a home to have the other necessities of life.  Even if you are credit-worthy, these are tough choices that effect future wealth creation through equity, future financial stability, and quality of life.

All of us have heard the stories about Millennials living at home, renting, or sharing rooms.  And many of these people are credit-worthy, but feel excluded from the possibility of homeownership.  You can understand the frustration. It cuts across an entire age group.

In the 1920s, Hemingway’s contemporaries were famously called “the lost generation.”  I worry that Millennials may become a lost generation for homeownership, excluded from the American Dream, punished as an unintended bi-product of the financial crisis of 2008.

We must be mindful of this situation.  We don’t want to exclude a generation of buyers, or even generations to come.  We must do more … work for more.  We must find a reasonable, prudent path to link Millennials with investors and lenders – and the housing market itself.

We know that a first step toward homeownership is often the purchase of a condominium.  The condo is often a step onto the homeownership ladder.  And a way of moving up that ladder.  And we know that FHA has a central role to play.  It is the lender of choice for many first-time home-buyers.  For many, FHA is the entryway to the housing market.

So, today, let’s find the ways and means for credit-worthy first-time home-buyers to enter the market.  Here is one way.  I want to direct your attention to “The Housing Opportunity through Modernization Act of 2016.”  That act allowed FHA, under certain circumstances to lower its required owner-occupancy standard for approved condominium developments. The owner-occupancy minimum has been reduced from 50 percent to 35 percent.   Ultimately, this action will allow for more people, including Millenials, to use FHA to buy a condo.

On Wednesday, Fannie Mae announced it would reduce its debt to income ratio to attract more Millennial homeownership.  Such an action would help some Millennials, although FHA loans would remain an attractive, powerful option.

I welcome this action which will happen next month.

In concert with our efforts, Millennials will now have game-changing circumstances that should encourage homeownership.

However, the Federal government cannot be the only solution.  We don’t want to turn back time.  Remember when, in response to the troubles of 2008, the Federal government was virtually the only lender for homeownership?  That was not a good role for FHA or Fannie Mae or Freddie Mac.  Lenders, bankers, and mortgage-providers need to do everything possible to help credit-worthy Millennials buy their first home.  The taxpayer cannot be the sole solution. This is a time for aggressive responses in cities and communities that open opportunities.

We need to do more.  We need to stop punishing an entire generation for the subprime crisis.  As we recover from that time, we must not overlook those trying to enter the market.  One publication argues that Millennials could become a “powerhouse” base of homeowners.  That could be true, if we set in place the right conditions, the correct responses.  In my view, we can shape the future prosperity of this country by retrieving a lost generation, and placing it on a firm foundation to wealth creation and future financial prosperity.

Thank you.

 

 

 

YOU CAN BUY A HOME, CALL US AND TAKE THE RIGHT STEPS.

Even if another Bank or Lender has said “NO,” we will work with you until we can say “YES.” If you have already started in our Qualification Coaching Program, call us, so we can check your progress!

The KEYS to your new home are within reach!
Call us 1st to AVOID mortgage problems,
Call us 2nd to SOLVE them!

Click Here to start your quick Free Credit Analysis & Pre-Qualify Now!

scott-circle
J. SCOTT HARRIS | BRANCH MANAGER
NMLS ID# 375517 (www.nmlsconsumeraccess.org)
(M) 214.435.8825 | (F) 866.343.3688
jharris@goldfinancial.com  www.goldfinancial.com  | Pre-Qualify Now

LinkedIn  |  Facebook  |  Twitter  |  JSH BLOG – News & Articles www.MortgageXperts.com

GoldEmailLOGO

885 E Collins Blvd Ste 110
Richardson, TX 75081

My Branch Closes FHA / VA & USDA Loans at 580+ in Texas, Oklahoma & Louisiana

Gold Financial Services is a Division of Amcap Mortgage, Ltd. NMLS #129122. Equal Housing Lender

J. Scott Harris is a Nationally Recognized Mortgage & Social Media Authority.

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95% Doctor Loan Program – Less than 2 yrs S/E or too much student debt to qualify? We can CLOSE these!!

Problem # 1 – Most new Doctors work as Professional contractors at Hospitals or Medical Facilities rather than regular employees.  Operating as a Professional Corporation helps in many ways, but almost always makes it more difficult to qualify for a traditional mortgage and buy a home.

Qualifying buyers with 1120 or 1120S tax returns & K-1’s has gotten more difficult in the recent years.  Providing 2 full years of tax returns and enough income to qualify for that new home can force new Doctors into waiting 3 or more years to get established and buy a home.

Problem #2 – The average Medical School Graduate enters the professional world with over $150,000 in student debt.  Unfortunately, underwriting guidelines have tightened and say a lender can no longer accept an income based or graduated payment plan or ignore deferred student loans.

Now lenders must follow a mandated 1% rule. Whatever is the greater between 1% of the cumulative balance or the actual amortized payment MUST be used for qualification. (1% of $150,000 = $1500/mo.)

Our Doctor Loan Program allows exceptions to the 2 year self employment rule and counting deferred student loan indebtedness in ratios.

In addition, we allow up to 95% LTV loans to the Conforming Loan Limit $424,100.

 


Call us 1st to AVOID mortgage problems,
Call us 2nd to SOLVE them!

Click Here to start your quick Free Credit Analysis & Pre-Qualify Now!

scott-circle
J. SCOTT HARRIS | BRANCH MANAGER
NMLS ID# 375517 (www.nmlsconsumeraccess.org)
(M) 214.435.8825 | (F) 866.343.3688
jharris@goldfinancial.com  www.goldfinancial.com  | Pre-Qualify Now

LinkedIn  |  Facebook  |  Twitter  |  JSH BLOG – News & Articles www.MortgageXperts.com

GoldEmailLOGO

885 E Collins Blvd Ste 110
Richardson, TX 75081

My Branch Closes FHA / VA & USDA Loans at 580+ in Texas, Oklahoma & Louisiana

Gold Financial Services is a Division of Amcap Mortgage, Ltd. NMLS #129122. Equal Housing Lender

J. Scott Harris is a Nationally Recognized Mortgage & Social Media Authority.

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Fannie Mae will ease financial standards for mortgage applicants next month

June 6 Washington Post – Link to Original Article

It’s the No. 1 reason that mortgage applicants nationwide get rejected: They’re carrying too much debt relative to their monthly incomes. It’s especially a deal-killer for millennials early in their careers who have to stretch every month to pay the rent and other bills.

But here’s some good news: The country’s largest source of mortgage money, Fannie Mae, soon plans to ease its debt-to-income (DTI) requirements, potentially opening the door to home-purchase mortgages for large numbers of new buyers. Fannie will be raising its DTI ceiling from the current 45 percent to 50 percent as of July 29.

DTI is essentially a ratio that compares your gross monthly income with your monthly payment on all debt accounts — credit cards, auto loans, student loans, etc., plus the projected payments on the new mortgage you are seeking. If you’ve got $7,000 in household monthly income and $3,000 in monthly debt payments, your DTI is 43 percent. If you’ve got the same income but $4,000 in debt payments, your DTI is 57 percent.

In the mortgage arena, the lower your DTI ratio, the better. The federal “qualified mortgage” rule sets the safe maximum at 43 percent, though Fannie Mae, Freddie Mac and the Federal Housing Administration all have exemptions allowing them to buy or insure loans with higher ratios.

Studies by the Federal Reserve and FICO, the credit-scoring company, have documented that high DTIs doom more mortgage applications — and are viewed more critically by lenders — than any other factor. And for good reason: If you are loaded down with monthly debts, you’re at a higher statistical risk of falling behind on your mortgage payments.

Using data spanning nearly a decade and a half, Fannie’s researchers analyzed borrowers with DTIs in the 45 percent to 50 percent range and found that a significant number of them actually have good credit and are not prone to default.

“We feel very comfortable” with the increased DTI ceiling, Steve Holden, Fannie’s vice president of single family analytics, told me in an interview. “What we’re seeing is that a lot of borrowers have other factors” in their credit profiles that reduce the risks associated with slightly higher DTIs. They make significant down payments, for example, or they’ve got reserves of 12 months or more set aside to handle a financial emergency without missing a mortgage payment. As a result, analysts concluded that there’s some room to treat these applicants differently than before.

 

Lenders are welcoming the change. “It’s a big deal,” says Joe Petrowsky, owner of Right Trac Financial Group in the Hartford, Conn., area. “There are so many clients that end up above the 45 percent debt ratio threshold” who get rejected, he said. Now they’ve got a shot.

That doesn’t mean everybody with a DTI higher than 45 percent is going to get approved under the new policy. As an applicant, you’ll still need to be vetted by Fannie’s automated underwriting system, which examines the totality of your application, including the down payment, your income, credit scores, loan-to-value ratio and a slew of other indexes. The system weighs the good and the not-so-good in your application, and then decides whether you meet the company’s standards.

Fannie’s change may be most important to home buyers whose DTIs now limit them to just one option in the marketplace: an FHA loan. FHA traditionally has been generous when it comes to debt burdens: It allows DTIs well in excess of 50 percent for some borrowers.

 

But FHA has a major drawback, in Petrowsky’s view. It requires most borrowers to keep paying mortgage insurance premiums for the life of the loan — long after any real risk of financial loss to FHA has disappeared. Fannie Mae, on the other hand, uses private mortgage insurance on its low-down-payment loans, the premiums on which are canceled automatically when the principal balance drops to 78 percent of the original property value. Freddie Mac, another major player in the market, also uses private mortgage insurance and sometimes will accept loan applications with DTIs above 45 percent.

The big downside with both Fannie and Freddie: Their credit-score requirements tend to be more restrictive than FHA’s. So if you have a FICO score in the mid-600s and high debt burdens, FHA may still be your main mortgage option, even with Fannie’s new, friendlier approach on DTI.

 
YOU CAN BUY A HOME, CALL US AND TAKE THE RIGHT STEPS.

Even if another Bank or Lender has said “NO,” we will work with you until we can say “YES.” If you have already started in our Qualification Coaching Program, call us, so we can check your progress!

The KEYS to your new home are within reach!
Call us 1st to AVOID mortgage problems,
Call us 2nd to SOLVE them!

Click Here to start your quick Free Credit Analysis & Pre-Qualify Now!

scott-circle
J. SCOTT HARRIS | BRANCH MANAGER
NMLS ID# 375517 (www.nmlsconsumeraccess.org)
(M) 214.435.8825 | (F) 866.343.3688
jharris@goldfinancial.com  www.goldfinancial.com  | Pre-Qualify Now

LinkedIn  |  Facebook  |  Twitter  |  JSH BLOG – News & Articles www.MortgageXperts.com

GoldEmailLOGO

885 E Collins Blvd Ste 110
Richardson, TX 75081

My Branch Closes FHA / VA & USDA Loans at 580+ in Texas, Oklahoma & Louisiana

Gold Financial Services is a Division of Amcap Mortgage, Ltd. NMLS #129122. Equal Housing Lender

J. Scott Harris is a Nationally Recognized Mortgage & Social Media Authority.

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