Fannie Mae Lending Guidelines Change; More Strict On Borrowers
March 8, 2008 by Danilo Bogdanovic
Filed under Buyer Resources, Mortgage/Lending
In conjuction with the temporary raise in loan limits, Fanne Mae has announced new lending guidelines for these new "jumbo-conforming" loans, which are more strict on borrwers than before. The possibility of this happening is why we wrote a post questioning whether the economic stimulus bill and higher loan limits would have a positive or negative effect on the housing and lending market.
In a nutshell, the new guidelines state that you:
- must have more money for a down payment
- need higher credit scores than before (in some cases)
- must have more money in reserves
- need to have less debt
- have to use at least 5% of your own money for a down payment rather than using all of the gift money from family towards the down payment
- are not allowed to receive more than 3% seller concessions
Here’s the above "in a nutshell" summary in more detail (directly from Fannie Mae):
Buyers – Using A Mortgage Broker May Leave You Dead In The Water
February 29, 2008 by Danilo Bogdanovic
Filed under Buyer Resources, Mortgage/Lending
If you are thinking about using a mortgage broker for financing or have already been approved through a mortgage broker, you may dead in the water and without a new home come settlement day. And to add insult to injury, you will most likely be in default and may lose your earnest money deposit.
First of all…what is a mortgage broker? A mortgage broker is a company that does not lend their own money. Instead, they outsource the loan to direct lenders who actually have the money and fund the loan. Examples of direct lenders are Wells Fargo, First Horizon, National City, SunTrust and CitiMortgage.
The part of the direct lender that deals with mortgage brokers, gives final loan approval and funds the loan is called the wholesale division.
So why may using a mortgage broker leave you dead in the water come settlement day? Because more and more direct lenders are closing their wholesale divisions and not going through with funding broker's loans even if the loans have already been approved and are supposed to close in the near future.
