Fannie Mae helping Millennials become Home-owners
With Millennials increasing their market presence - representing 45% of the current real estate demand - government agencies like Fannie Mae are taking a second look of how to better support their home buying power, and in return our economy.
As most of you know one of the largest factors in getting pre-qualified for a home is your debt to income ratio; thus student loan debt prevents a lot of people from qualifying - as of yesterday Fannie Mae made some exciting announcements that could help future homeowners for generations to come.
Fannie Mae announced three key changes to their current qualification guidelines. The first is restructuring the way the debt is viewed. For example, a lot of college students today don't personally pay for their education - their parents or a close relative does. Yet when this same person goes to qualify for a mortgage - lenders still see the debt as a strain on the individual even though it's not since someone else is taking care of the bill. Well now Fannie will take that fact into true consideration which greatly increases not only qualification rates but also amount of purchasing power. Second thing Fannie decided to make a change on is the way they look at your student loan, typically to err on the safe side they used to have lenders base your monthly student loan payment based off the calculated full amount - instead of the income based payment structure being actively used. This change positively reflects what an individuals monthly bills actually are and not what they could possibly be - thus increasing their buying power. The last measurement Fannie took to help future home owners is that they will now allow borrowers to refinance their higher interest-rate school loans into a new, lower-rate mortgage.. Although it seems that these simple changes should of been implemented years ago - it's great to see Fannie Mae taking notice and making appropriate changes to help home owners and our economy nation wide!