Trying to find accurate news and information these days seems like a wild goose chase. You never know who to believe anymore and if you hear something you have to check the source and then crosscheck it with other reputable sources. It really becomes a frustrating battle to find out what’s real and what you can count on.
As a professional in the mortgage and finance industry, it is my job, duty, and passion to give you the correct information 100% of the time. I want to give you the news as it’s happening, changes that you might be expected to see over the next year and any updates to existing laws, rules and regulations.
If you’re planning on getting a mortgage 2017, and this means a refinance as well, there are some things you need to know in order to get the best deal in the best rate.
One of the biggest changes was due to Fannie Mae and Freddy Mac making some changes to conforming mortgages. They made some changes late 2016 and early 2017. Here are some of the basics that you should know about.
Appraisals may not be needed.
For some refinancing options, and I do stress that this is not everyone, you may not need a full-on appraisal. Your lender may offer you Property Inspection Waiver. However, in order to qualify, the loan must be underwritten electronically through Fannie Mae’s desktop underwriter system. This is a trickier system and it doesn’t work for everyone. The software that Fannie Mae will use may already have your appraisal in the system from a past appraisal. This means that you know right away whether you qualify for the refinance or not. Freddie Mac has a similar program call Home Value Explorer. And the refinance loans are underwritten by its Loan Prospector program, a similar program to Fannie Mae.
[Read More: Can I buy a home after a foreclosure?]
Limits are now higher.
FHA mortgage loan limits are higher than they were in 2016. These rates have not changed since 2006. The standard conforming loan limit for a new home purchase or even a refinance went from $417,000-$424,199. In high-income areas where the median home price is higher than most areas, that limit is now 636,150. Although this is not a huge job, it could push your loan limit up just a little bit higher giving you a better deal on a home.
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Interest rates are going to increase.
You’ve probably already seen this if you’re out there looking at refinance fees and rates. We experienced historically low rates for such a long time that it’s only natural that the housing prices will continue to rise. It’s projected that housing prices will rise by about 5% over 2017 and this means that interest rates will creep up as well. Refinancing for qualified individuals can still be less than 4% but for new homes with a 30 year mortgage you’re looking at at least a 4% if not a 4.5% or higher.
Other changes include discounts for energy efficiency.
If your home features solar panels, Fannie Mae may consider giving you special treatment. This allows underwriters to exclude any solar panel lease payments from the calculation of debt income ratio. This is still a fairly new system but if you’re buying a home was solar panels or you are planning on putting solar panels into your home, you may get deductions on those lease payments.
[Read More: How to Qualify as a First Time Buyer]
I’m going to step out on a limb here. Whether you like our new president or you completely disagree with him, most economists predict that having President Trump in office will not negatively affect the real estate market for those wanting to sell their home and will minimally affect those that want to buy.
Yes, there have been cuts here and there to certain discounts that Pres. Obama signed into office his last week, but they will not greatly affect your chances of buying a home. If you’re well-qualified with a decent credit score and credit history, as long as your debt to income ratio is well-balanced and you have the income to support a mortgage, there should be no outstanding reasons why you do not qualify for a home loan or refinance.
But, let me say this, every person’s situation is unique. No two people have the same financial background and this is why there are so many different programs and options out there. The only way to know the type of rate you’re going to get, the terms you are eligible for and the best program for your needs is to contact a lender in your area. I would be happy to be that lender anywhere around the Lake Forest area or Southern California. I love mortgage and finances and can explain the sometimes confusing legal jargon that surrounds this industry. Give me a call today and let’s see if we can make your financial dreams come true 2017.