Are you interested in becoming an Atlanta homeowner? If so, now is one of the best times to get an Atlanta home loan.
There have been two big changes in the loan industry which have made buying a home easier than ever. While not everyone will qualify for a mortgage, these provisions allow more people to have access to the dream of homeownership.
Getting A Mortgage – 2 Changes Make It Easier Than Ever
Back in May of this year, some incredibly exciting announcements were made from the home loan industry. These announcements took many by surprise.
We’re really excited about the news because it means we have two more ways to help those in our community become first-time homeowners.
1. News from Equifax, TransUnion, and Experian
Equifax, Experian, and TransUnion are the three major credit rating agencies in the U.S. They determine a person’s credit score, thereby controlling who gets the most affordable home loan rates. These agencies have recently announced they will be dropping tax liens as well as civil judgments if the information they have is incomplete.
This means a person’s profile information – their name, address, and their date of birth or Social Security number – needs to be complete. According to CNBC, a large number of judgments and liens these agencies have taken against people do not include this important information.
Without this information, mistakes are easier to make. So, too, is misrepresentation.
If judgments and liens are removed from a person’s FICO score, they can expect their credit score will improve by as much as 20 points.
What does this mean for those looking for an Atlanta home loan?
For one thing, a better credit rating means more people will be able to qualify for a mortgage.
Second, the better credit score a person has, the lower interest they’ll likely have to pay on their loan.
This change will not only allow more people to become homeowners, it will allow them to save money on their loan at the same time.
2. Fannie Mae and Freddie Mac Have Changed Their Rules
One reason some people are denied home loans is because they have a high level of debt. Having debt makes lenders nervous.
It can, at times, be an indicator a borrower isn’t responsible with money. Lenders are nervous about providing loans to such borrowers because it could mean they end up defaulting on their loan or filing for bankruptcy.
However, some people with high levels of debt don’t have the debt because they have been irresponsible. They have this debt because they’re trying to make a better life for themselves by going to college.
Student loan debt is generally a significant amount of debt.
And with this high level of debt, most of those who are still paying student loans have had to hold off on their dream of homeownership.
Fannie Mae and Freddie Mac have decided to relax their “existing debt rules” by looking at where the debt comes from.
According to the Washington Post, these changes will benefit graduates in the following ways:
- Monthly debt payments are reported to the credit bureaus. Students who have had to opt for reduced monthly payments will only have their current monthly payment amounts count toward their debt-to-income ratio.
- Non-student debt loans (like credit card payments) made by someone else (mom and dad, for example) will also not count toward a person’s monthly debt-to-income ratio.
