Ann Arbor MI Real Estate: Mortgage News – Times are changing!
The Mortgage industry and market has been relatively steady during this recent increase in home sales and last few weeks. Interest rates have remained in the mid to low five’s and been showing no real indication of moving up in the short term.
However! There have been some changes which are coming this way in a couple of months - Fannie Mae is getting tougher on Mortgage Insurance, Credit Scores and Income levels! In an internet document the mortgage backer discussed changes to its level of risk. Fannie Mae set December 11, 2009 as its “effective date” for the changes to to its guidelines.
Guideline changes are summarized, below:
- Minimum credit score requirement raised to 620
- Total debt-to-income levels may not exceed 45 percent, except by exception
- Loan-level pricing adjustments for loans with “minimum” PMI coverage.
Loan-level pricing adjustments are specific fees assessed for specific risks. Based on the current lender guidelines, if your credit score is low, or if you’re doing a cash-out refinance or if you live in a condo and have little equity, you’ll pay an extra fee to Fannie Mae for your mortgage. This adjustment has been around since April 2008 and has been modified 9 times since then!
These guideline changes are naturally expected to cause some teething problems, particularly to buyers who are able to just qualify for a conforming loan. Therefore it is advisable to take advantage of current conditions and get pre-qualified for a loan now and grab that deal on your dream home today under current guidelines!
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January 25th, 2010 at 10:15 AM
enjoying the inside Ann Arbor Real Estate and community posts