Earlier this month I did a Monday Market Update video discussing some of the changes that have come down from Fannie Mae. In case you didn't get a chance to see the video I thought I'd do a quick re-cap for everyone. These new policies are helping to help potential borrowers with student loan debt to qualify for a home loan. With the old policies, we found many of our potential buyers being rejected from obtaining home mortgage loans due to their debt-to-income ratios.
Here is the link to view additional information from the Fannie Mae site (Marie please link: http://www.fanniemae.com/portal/media/financial-news/2017/student-loan-debt-6546.html)
To summarize two of the biggest changes that will affect buyer's with student loans:
1. Student Debt Payment Calculations - With the changes in policy, lenders are now given the option to view and consider student loan payment information on credit reports. By allowing lenders this option, it gives the buyer with student loan debt a greater chance of qualifying for a loan because the lender can now analyze their situation with a better, fuller picture of their financial situation as a whole.
2. Debt Paid by Others - We are very commonly seeing debts that are being paid by others (i.e. credit cards, auto loan and/or student loans). For example, a parent whose student takes out a student loan with the intention and understanding that while the loan is in the student's name, the parent will be making the payments on the loan. With this policy change, the lender can now eliminate the non-mortgage debt that is being paid by someone other than the borrower, this increasing the borrower's eligibility to qualify for a mortgage loan.
If you are or know someone who currently has student loan debt and feels that you may be effected by these changes, please contact us and we will put you in touch with a great lender who can analyze your specific situation and help you down the road to home ownership. I can be reached directly at 480-415-1341. We look forward to helping you with all of your real estate needs.
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