Important Differences Between Fannie and Freddie...

Good Morning!

 

When it comes to conventional loans there's Fannie Mae and Freddie Mac, and basically, that's it.

 

Here are some differences between the two that few know about...

 

1)  Lower credit score and some credit dings?  Try Fannie Mae. Fannie may now go up to 50% back-end dti on a case by case basis BUT it is still more aggressive with the DU

credit analysis than Freddie.

 

2)  More aggressive additional income calculation?  Go Freddie Mac. Freddie DOES NOT require a 2-year average and a YTD calculation for income such as bonus, overtime, tips, etc., Fannie Mae does.  Merely most recent year and YTD.

 

3)  Unpaid collections and non-mortgage charge-offs?  Go Fannie. Fannie, on a primary SFR ONLY, does not require ANY of them paid off. Freddie Mac might.

 

4)  Non-occupying co-borrowers?  Both now allow it. BUT, Freddie REQUIRES a housing history, Fannie Mae does not.

 

That's it for today!

 

Thanks for reading!  Have a good day.

 

Brett

 

Get Pre Approved For A Loan Here

 

My Previous Blog Posts

You Have To Know This Before Applying For A Loan...

Good Morning!

I touch on this from time to time, but it’s important so I want to revisit it…

One of the most important things you will have to do when you apply for a loan is to show that you have the money for the down payment.

This is called sourcing in the mortgage industry.

For instance, the down payment on an FHA loan is 3.5%.

If the seller is paying your closing costs – you will still have to pay your 3.5% down payment.

You can have this money in your checking account or savings account now. You can borrow it from your retirement account.

…You can even get the down payment as a gift.
…but, it’s crucial that we are able to show where it’s coming from.

I can tell you that cash is a problem when it comes to sourcing your down payment. You will need to put it in the bank and leave it for 60 days before we can use it.

If you aren’t sure where your down payment is coming from – find out now.
..before you apply for a loan.

That’s it for today.

Thanks for reading!

Get Pre Approved For A Loan Here

My Previous Blog Posts

Two Ways To Avoid Paying Mortgage Insurance...

Good Morning!

If you have a conventional loan, and your loan to value ratio is over 80% – you will be paying monthly mortgage insurance to the lender.

No one likes paying monthly mortgage insurance.  It’s extra money added to your payment every month, and it’s doesn’t help pay down the balance of the loan.

If you want a conventional loan and your LTV is over 80%, but don’t want to pay monthly mortgage insurance there are two ways to avoid this…

1)   One would be Lender Paid Mortgage Insurance.  We pay the MI for you.  The rate generally is .25 to .375 higher, but there is no monthly mortgage insurance.

2)  Get a piggy pack loan.  This is where we make two loans for you.  … A first mortgage at 80%, and a second mortgage at 15%.  This way you just put down 5%, and there is no monthly mortgage insurance payment.

Thanks for reading!

Have a good day

Get Pre Approved For A Loan Here

My Previous Blog Posts