Game Changer - New, Easier Loan Requirements From Fannie Mae!!
Updated: Jun 27
In the time I've spent in real estate, I've learned more alphabet soup acronyms than any one person should ever have use for in their entire life! IABS, NAR, NTREIS, PITI, FSBO, LMNOP.....
One that has recently lost it's intimidation factor and become way more useful when having conversations with folks about loans is "DTI" or "Debt To Income Ratio". Sounds ominous, right? Don't let it scare you - it's a simple concept that compares how much you owe (for your car loan, credit cards, rent, etc) to how much you make and helps the loan and mortgage industry, and YOU, determine how much you can safely borrow for your next investment.
Why should you care? Because our good friends at Fannie Mae are changing the rules of the game and lowering the DTI requirement for you to be approved for a mortgage, that's why! This article from realtor.org talks in more detail about it.
Government-sponsored financing giant Fannie Mae will ease its requirements next month, raising its debt-to-income ceiling from 45 percent to 50 percent on July 29. The move could pave the way for a larger number of new buyers to qualify for a mortgage, particularly millennials who may be saddled with student loan debt. Read more....