Important Changes to Mortgage Underwriting Are Around The Corner!

Fannie Mae recently announced changes which will impact anyone who is looking to buy or refinance a home. The most significant change will reduce the borrowing power for many people who have debt other than their home—which is most people!

Part of the underwriting process for every mortgage is evaluating the debt to income ratio for the borrower. This is a fancy way of saying that the underwriter is required to look at how much of a borrowers income is being spent on fixed monthly expenses such as paying the mortgage, car loans, student loans, and credit cards. In the past, so long as a borrower had excellent credit, underwriters were allowed to approve mortgage applications for borrowers who were spending more than half of their income every month. On December 12, 2009, the allowable debt to income ratio will be reduced significantly and no exceptions will be allowed regardless of how good a borrower’s credit is.

This change in how Fannie Mae views a borrower’s ability to pay will impact many people who have not had any issues obtaining a mortgage in the past. As a mortgage expert I am following these changes closely as consumer lending on the whole continues to evolve in response to the economic fallout we have been going through recently. If you are considering buying or refinancing a home, there is no better time than now to talk to a true mortgage professional about your options. Peter Kazaks is a Mortgage Consultant at USA Funding Corp. He can be reached at 414.807.7277 or peterkazaks@gmail.com.

Still Time to Get $8,000 FREE!

I keep seeing signs in the yard of homes that are for sale saying something to the effect of "This home qualifies for the $8,000 first time homebuyer tax credit!" Well, every home could qualify for the credit... What matters is that you, the home buyer, qualify.

And right now, what really matters, is that you take action!

Here's what you need to know, right from the IRS!

“For first-time homebuyers this year, this special feature can put money in their pockets right now rather than waiting another year to claim the tax credit," said IRS Commissioner Doug Shulman. “This important change gives qualifying homebuyers cash they do not have to pay back.”

If you buy your home BEFORE DECEMBER 1, 2009, you may qualify for this credit. With just over six weeks left in this IRS program, you still have time to find and buy your new home before the credit expires! But, you don't have much time to wait around.

Call me today to explore your options for buying your first home and claiming your $8,000. Learn more about me at: www.MortgageMKE.com