Many people talk to a lender, get a preapproval and think it's valid for several months. In reality, until you have written a purchase agreement and locked in your interest rate, mortgage guidelines can change affecting your approval.
In the last couple of months we have seen FHA upfront mortgage insurance premiums increase from 1.75% to 2.25%. We have also seen lenders cap total debt ratios at 45% of your gross income. Some of your assets used in qualifying may not be eligible – we may only be able to use 60% of your account balances (retirement accounts for example) instead of the 70% allowed in the past. Interest rates are changing and that can easily affect how much you can qualify for.
We know that FHA will allow 6% seller paid closing costs right now, but this summer that will go to 3%. Rural development loans are out of money for those looking in outlying areas. We do not know if Congress is going to allocate more money to that program.
Many lenders are now required to pull your credit report more often or are only allowing it to be valid for a 45-60 day period instead of the 90 days it used to be. Lenders are doing this to protect themselves from new debt showing up on the credit report that can affect the borrowers ability to pay the mortgage.
If you have talked with a lender and haven't stayed in touch, you may want to follow up with your loan officer and make sure your approval is still valid! Remember you have until April 30th to write a purchase agreement and must close by June 30th to take advantage of the tax stimulus. You want to make sure your situation hasn't changed so you don't have a problem writing a purchase agreement this month!
