Fannie Mae and Freddie Mac did make some changes that may affect you for 2017, some may make it easier to get a mortgage, some might not.
Fannie Mae has a property inspection waiver that may mean you do not need an appraisal on a refinance. This will show up on the DU underwriting findings for some refinancing their home. Freddie Mac has something similar called a Home Value Explorer. This won't help everyone, but for some, it may eliminate the need (and cost) of an appraisal.
Mortgage limits increased for conventional loans, in this area it is $424,100 – first increase in many years.
Homes in wetlands may not be approved – this is a new change as of December 2016 for Freddie Mac. For those affected by coastal tideline, wetlands or setback laws, you may find that Freddie Mac will not approve your mortgage. Fannie Mae doesn't have the same wetland requirement but does have environmental sensitive areas that will not be approved. If your home was damaged due to flooding or something similar, you may not be able to rebuild in the same area.
There are also some changes in underwriting – some people may have a harder time getting a Fannie Mae loan approved compared to last year. Desktop Underwriter made some changes in the last month that have affected credit, overall credit use and their risk assessment may mean that you won't get an approval through DU. However, they also changed some other areas that may help some people with an approval. Overall, they expect the number of approvals to stay steady.
Make sure you are saving bank statements, paystubs, w2's and tax forms. I have seen some clients that throw away those items and we do need them. Also if you have large cash deposits into your bank account, make sure you keep a record of where the money came from. It affects what we can use for underwriting. If you are depositing checks into your bank account, make a copy of the checks before you deposit them. If you are switching jobs, make sure you are staying in the same type of work. If you currently are hourly or salary and switch to commission income, we can't use the commission income without a two year history.
Mortgage lending is always making some changes – some small, some big – if you are thinking about buying a home, talk to your lender about any questions you have. It's better to ask and find out the best way to document changes ahead of time – that way you don't risk being denied at the last minute!
Leslie Vanderwerf, NMLS ID#335509, American Mortgage & Equity Consultants, Inc, AnEqual Housing Lender, NMLS#150953 - Email - Website
