Mortgage Guidelines Getting Tougher

Because you can expect mortgage guidelines to get tighter in the coming months and it will be more difficult to get a loan in the future than it is today.

Recently both Fannie Mae and Freddie Mac have announced guideline changes for mortgages that they will buy and the result of these changes is that it will be more difficult than it is now for many people to get financing.

Two of the highlights of the changes:

Freddie Mac will no longer buy “stated loans” at all

Fannie Mae is reducing the amount of cash-out allowed when refinancing first or second homes

While it is true that Fannie Mae and Freddie Mac are not the only sources for people to get money to finance mortgages, together own or guarantee approximately half of all mortgages in the US.  Which means that when they start tightening guidelines, you can reasonably expect FHA, VA and most of the portfolio lenders to follow suit.

So if you are thinking about home financing…

And if you are waiting for interest rates to fall “just a little more”…

Act now or risk being disappointed that you can’t qualify for that potentially-super-low rate because of a guideline change!