October 7, 2011
- Changes are coming to USDA loans. Previously, first time buyers could obtain a zero down loan with no MI and great rates. As of October 1st they will be lowering the upfront fee and adding MI. USDA runs out of money around this time each year, and conditional commitments were given promising funding contingent upon funding from congress. Some lenders would fund the loans until congress refunded the program. Conditional commitments are no longer being given.
- And, on the horizon are increased fees by Freddie and Frannie that could exceed .5% in those states with a slow foreclosure process. Compare the length of time it takes to foreclosure of approximately 950 days in New York and New Jersey with 92 days in Texas.
- Did you know that a consumer with a starting FICO score of 720 will see a drop of 130-150 points after foreclosure and a drop of 95-115 points after a short sale?
- From an article in Inman News: Fannie and Freddie have set strict rules for rental income in real estate purchase. Rental income can only be included as documented in the individual’s tax return for at least one year. That means rental income can’t help you qualify for the mortgage to purchase the house that will generate the income. If you own a home and plan to rent it out to help you qualify for another home, this same one year rule would apply. Gone are the days when the banks would calculate 75% of the rental income toward qualification.