The mortgage industry received some welcome good news last week that we want you to be aware of. The FHFA (Federal Housing Finance Authority) announced that they are eliminating upfront fees tied to the client’s DTI Ratio (Debt To Income) for conventional loans which are backed by Fannie Mae and Freddie Mac. Conventional loans have always had what are called LLPAs (loan level price adjustments), that affect the interest rate being offered based on specific parameters such as FICO score and down payment.
With the rise in home prices, many consumers have a higher DTI Ratio due to the increase in monthly mortgage payment. In an effort to hedge against risk, the agencies were also charging a higher premium on rates due to this. It is great news that they listened to our industry’s complaints about how unfair this is, and they have removed the ruling. It is our priority to always ensure you are up to date on industry changes. This will help many consumers with their “home purchasing power”.
Please reach out if you are considering a new home loan and we can help strategize your options.