New Mortgage Guidelines for 2016

New mortgage guidelines for 2016

Fannie Mae and Freddie Mac have several programs for first time home buyers with a low down payment.

• My Community program requires a minimum down payment of 5%. The borrower’s income cannot exceed 100% of the annual HUD Area Median Income for the subject property’s location.
  
• Home Possible® program requires a minimum down payment of 5%. First Time Home Buyers must participate in a home ownership education program. 40-year fixed rate Home Possible® mortgage.
• Community Solution loans provide additional flexibilities for teachers/educational institution employees, firefighters, police, healthcare workers and military personnel.
  
• HomeChoice loans offer borrowers with a disability or who have a family member with a disability who may need greater underwriting flexibilities, including non-occupying co-borrowers.
• HomePath® program is a fixed-rate, fully amortizing loan program that provides the financing for properties that are owned by Fannie Mae as a result of foreclosure or other similar action such as a deed-in-lieu.
  
• Conforming loans that promote home ownership for first time home buyers with programs that offer a low down payment.
• Conforming High Balance are mortgages originated using higher maximum loan limits that are permitted in designated high-cost areas.

and Freddie Mac require a minimum credit score of 620 to buy a home. Their mission is to help ensure that home buyers and home owners have access to mortgage financing.

Today’s historically low interest rates make now the perfect time to purchase a new home or refinance.

One of the most popular types of mortgages is the 30-year fixed-rate mortgage. This loan is usually the easiest to qualify for and provides the maximum interest deduction at tax time. The interest rate stays the same over the life of the loan which provides unchanging low monthly payments.

No matter what the economy looks like, mortgage rates change on a daily, even hourly, basis. Rate fluctuations can cost or save you thousands of dollars. With that in mind, the question when shopping for a loan is whether it's best to lock in a rate or float the loan. Either way, there's risk.

It's your choice the rate-lock option means a borrower fixes the price at the current mortgage rates, provided he or she finalizes the loan within a specified period. The upside is that you are protected against a potential mortgage rate increase. But if the rate goes down, you could end up paying more than necessary. The "float" option, by contrast, allows the borrower to adopt a wait-and-see approach. The risk remains, though: If rates do rise, you wind up losing money.

Not everyone can take advantage of the opportunity to refinance or qualify for a new home loan due to today’s tightened credit guidelines.

To be approved at the lowest mortgage rates, borrowers do not need to have the highest credit score. In addition, the consumers need a reasonable debt-to-income ratio. Most lenders will qualify borrowers at a maximum of 50 percent of overall debt to household gross monthly income. Some borrowers with significant assets or income will be able to qualify even with slightly lower credit scores or higher debt.

Low mortgage rates result in lower monthly payments which can save you thousands of dollars off the life of the loan.

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Mortgage World Home Loans is an online mortgage company specializing in FHA loans for first time home buyers. To buy a home with 3.5% down payment and a minimum credit score of 580 using an FHA loan, apply now.

We look forward to working with you.

We look forward to working with you.

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