For any FHA loans assigned on or after September 14, 2015 there will be significant changes, especially those that are applying with student loans. Here's what you need to know if you are considering applying for an FHA backed home loan.
Changes for those with student loans.
As of September 14, underwriters will no longer be able to exclude student loan payments for FHA loans. In the past, student loan payments in deferral for at least the next 12 months could be excluded from the debt to income ratio. This means that those that had student loans deferred for over one year were not taken into account when applying for the home loan. For FHA loans assigned prior to this date borrowers that have student loan payments which are deferred for more than one year after the closing date do not have to count these payments as part of their debt. But on September 14, 2015, this will change making applying for a home loan mortgage more difficult.
If you have deferred a student loans for more than one year, is extremely important to get qualified before the September 14 deadline. This means that you'll need to submit a signed application, have your credit pulled and have an accepted purchase contract or refinance ready to go.
Other FHA changes coming down the pike will be if a down payment has been gifted to the buyer. Lenders will be requiring a bank statement from the donors account as well as the source of any large deposits to that account. This is required in order to document where the donors funds came from.
For all 30 day accounts such as American Express, mortgage companies and lenders will be required to verify that the borrower pay the outstanding balance in full on all 30 day accounts each month for the last year. 30 day accounts that are paid monthly will not be included in the borrower's debt to income ratio.
If a borrower has changed jobs more than three times in the last 12 months or change their line of work, the mortgage lender must verify and document the stability of the borrower's employment income. Any gaps longer than six months in employment will require six months on a new job before approval.
With these new changes it is imperative that potential buyers apply for the loan before September 14. But this also means they will need a signed contract on a new home. For more information or to get started on a home loan and find a home to purchase, contact me today.
As a certified Realtor® for the top-rated Columbus Realty Firm - Vision Realty, with 32 years of dedicated real estate experience, I can help buyers, sellers, investors, short sale sellers and more find, sell or invest in the right property, at the right price, at the right time. Contact me anytime for updates and information on the Columbus OH Real Estate market.