So, what does it take to get approved for a loan to buy a house this summer, whether you’re a first-timer or planning to move up or downsize? Maybe not all that you think. For most people, the key requirement is that you’ve got the right package of stuff — credit score, down payment, financial reserves, debt-to-income ratio — to get an acceptable grade from the automated underwriting systems, or “black boxes,” installed at the dominant investors in the market, Fannie Mae and Freddie Mac. Debt-to-income (DTI) ratios are a major factor hard-wired into the black boxes that refer to the ratio between your monthly credit-related expenses — including housing payments, credit cards, student loans and the like — and your monthly gross income. In an important policy change taking effect this summer, Fannie eased its reserve and down payment requirements for DTI’s in excess of 45 percent up to a maximum of 50 percent. Note that FHA uses its own proprietary underwriting system, which often yields more-generous decisions on approvals than Fannie’s or Freddie’s. Regarding credit, in June of this year the average FICO score for home-purchase loans at Fannie and Freddie was 754. That’s a big reach for millions of would-be buyers. But that’s not the whole picture. According to data compiled by Ellie Mae, a software and analytics firm that tracks loan characteristics, substantial percentages of applications are receiving approvals from Fannie and Freddie with lower FICO scores than you might imagine. Nearly 13 percent of their approved loans in June had scores between 650 and 699. FHA’s average score for home-purchase loans was 683, but many were much lower than this average. Down-payment requirements also are super-low at the moment. Fannie and Freddie both have programs that permit just 3 percent down with many state and local housing agencies providing grants and/or loans designed to ease the cash required even more. The bottom line? Get rid of preconceived notions you may have about how tough it is to get approved. Standards are more flexible and not as tough as you probably thought. Sources: Ken Harney, The Nation’s Housing, Fannie Mae and additional industry publications
At the Sales Team Realtors, they understand that buying or selling a home is always about something bigger going on in life. Marriage, Babies, Graduation, Remarriage/Blended families, Retirement, Divorce, Job changes, Caring for aging parents, Illness or disability, Promotion, Death in the family are all examples of major life events that commonly motivate a real estate purchase or sale.
Regardless of economic swings or the price of oil, life goes on. The Sales Team Realtors understand that. While these kinds of life events are common to everyone, no two families are exactly the same. Whether you’re buying or selling—or both, as in upsizing or downsizing across town—your agent will take the time to listen to your needs and make a plan that will help you get there as smoothly as possible.
If you’re selling, yes there are buyers! Your Sales Team Realtor will collect recent sales and listing information to help you determine a strategic asking price, plan an effective marketing strategy and will give you great recommendation on how to best display your home. Often that can be something as simple as repairing a few “wear and tear” items, some new paint in a living area or updating a light fixture in the dining area.
If you’re buying, this is a great time for that! There’s more selection than Midland has had in several years, so you can relax and take the time you need to find the perfect home. It’s a great idea to make a list of your most important needs, whether it’s a nearby school, bedroom count, kitchen size, proximity to work and, of course, your price range.
Your list should include how you’ll use your home: Entertaining, home office, family time or others.
Want to preview some listings first? No problem! Go to www.salesteamrealtors.com and click on the Property Search tab, then follow the directions there to get some great ideas to jump start your search.
Once all the decisions are made and the day of the transaction approaches, your Sales Team Realtor will help you navigate any needed inspections, surveys and fine print, so you can move with confidence toward you goal of getting your family into the right home.
At The Sales Team Realtors, they understand that they’re in business to serve you through your major life events. Whether you’re buying or selling, your ultimate goal is to provide a warm, safe, affordable home for yourself and, if applicable, your family. Your Sales Team Realtor will do everything possible to make that happen smoothly.
Call The Sales Team Realtors today to set a time to discuss your real estate needs and rest assured you’ve made the right choice for your family.