The biggest barrier to buying a house is without question the down payment.
This is why CENTURY 21 Gavish Real Estate holds seminars to help people understand why kind of assistance is available to them.
Fears linger from the crash in 2009 about the amount needed for a down payment. People are afraid to pay too little and wind up with a steep mortgage, or they’re nervous about being duped. A justifiable form of trepidation if there ever was one, even though it’s no longer possible.
Things may be changing for home buyers, however, as Fannie Mae, the nation’s largest backer of home loans, is announcing that they’ll alter the debt-to-income ratios that play a major factor in a person’s ability to secure a mortgage for a house in Las Vegas.
Things may be changing for the better for home buyers
According to an article on Realtor.com, written by Clare Trapasso, the official home search site of the National Association of Realtors, “Fannie Mae plans to increase its allowable debt-to-income ratio from 45% to 50% on July 29. This means that more borrowers on the cusp of getting a loan (e.g., millennial, first-time, and lower- to moderate-income borrowers carrying more debt) could potentially qualify for a mortgage backed by Fannie.”
This statistic is used to determine a home buyer’s ability to make her or his monthly mortgage payments. It currently stands at 45%, meaning that a person can’t pay in monthly debt more than 45% of their take-home income.
Now, that number will be adjusted to 50%.
Renters in Las Vegas have long been comfortable in stand-alone single family homes, living very much like a homeowner.
However, renting only gets them a roof over their head. That’s important, but it can be so much more. Especially now.
Fannie Mae is clearly trying to stimulate home buying, which has been plagued the last couple of years by ever-tightening inventory and tough mortgage qualification standards.
The debt-to-income reduction measure could help millions of aspiring home buyers be better situated to own.
As Ms. Trapasso noted in her article, individual banks might have their own lending standards. Fannie Mae’s role is to secure the loan provided by lenders, they’re a safety net, so to speak.
Think of it this way: you’d be much more comfortable heading out to Red Rock to rock climb for the first time if you had a trusted, experienced guide leading you. Banks use Fannie Mae as their barometer for lending.
Overall, this is a positive adjustment in what’s been a long-standing requirement for a mortgage.
It doesn’t mean everyone is suddenly now able to qualify, but it will help plenty of people who were already close.