New Rule from Fannie Mae Could End Up Ruining or Delaying Closing on Your Future Home

If you’re not very careful, a new rule just enacted June 1st by Fannie Mae, could put an end to your dreams of owning a home.

Fannie Mae has implemented what’s called “The Loan Quality Initiative (LQI). (Don’t you just love the names they come up with?)

The LQI is designed to make sure that the mortgage loans bought by Fannie Mae comply with its underwriting requirements.

What’s important to you is that this will require mortgage companies to double-check your financial information right before your closing. What they are going to do is “refresh” your credit report to look for any new debt or a lower credit score.

Some banks are checking this out just 2 days before closing!

Translation? Even though you may have been approved for the loan a month or two earlier, changes in your finances could cause the mortgage company to delay or deny your loan just as you are about to close on the home.

Read On for 4 Things You Want to Avoid Before Closing:

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Mortgage Rates Decline

Home Buyers Get Surprise Drop In Rates Below 5%

Here’s some news that is surprising a lot of people-mortgage rates have dropped below the 5% level.

The housing industry had been bracing for a season of rising interest rates brought on by the end of the Federal Reserve $1.25 trillion (yes, trillion) mortgage-securities purchase program.

Instead, many in our industry now say rates could drift as low as 4.5% this summer from 4.86% now, instead of climbing up to 6% as economists projected.

Translation? Lower payments for buying homes or refinancing.

Find out how the financial problems going on in Greece and all of Europe is actually helping you the buyer …

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You probably know your Social Security number, some of your passwords, usually your PIN number. But do you know the number that will cost — or save you thousands of dollars?  Look how your credit score number can impact your monthly payment:

Better Score = Cheaper House

If a family put a 3.5% down payment on a $172,900 four-bedroom house, they would take out a loan for $166,850. Here’s what their true bottom line would look like.

Credit Score of 760+ yields a rate of 4.981% with a monthly payment of $893.75

Credit Score of 680-699 yields a rate of 5.380% with a monthly payment of $934.83

Did you get that?  The guy with the credit score in the range of 680-699 ends up paying approximately $41.00 a month MORE than the guy with a 760+ credit score!  That’s every month!

Bottom Line: You will end up paying $15,000.00 MORE for the home over the life of the loan!

If your credit score is less than 620: It will be tough to get a loan at all.

Read more about your credit score and how to get an idea what it might be … Read the rest of this entry