Starting in January, 2011 the next part of the journey in underwriting loans that are "smart" and will "survive" the uncertain real estate market begins. It's being called the Loan Quality Initiative, or LQI.
Fannie Mae's system will "Fail" loans that might otherwise be approved, if they do not meet mandatory Debt To Income Ratios... NO EXCEPTIONS. 45 is the hard and fast maximum number.
This is significant - because verified High Liquid Assets have ALWAYS been considered an "off setting" factor.
Let me give you an example... Let's say you are moving from California to be closer to all of your children here in North Carolina. If you own a home in California, and you've decided to rent it, instead of trying to sell it right now... we have to count that payment in your ratio.
Let's say with both your new house payment, and your "old" house payment, your ratio is 49 percent. Now your ratio is not REALLY that high, because you are going to get rent to offset your payment in California - but for the computer underwriting the loan, we won't be giving you credit for that rental income until you've received it for 12 months.
Fine, you have a 48 percent Debt to Income Ratio... if you have 401Ks, stock accounts, CDs, Money Market Accounts that total a couple hundred thousand - we could get that loan approved. (we actually closed this exact scenario last month).
Starting in January of 2011 - we would be suggesting that you buy a smaller home here, or put more money down, or do SOMETHING to get your ratio to 45%... makes FHA Mortgage Loans in NC look more attractive #justsayin'. Wish our maximum FHA loan was higher than the $295,000 cap!
If you have questions about qualifying for a home in North Carolina - call Steve and Eleanor Thorne, 919-649-5058 Certified Mortgage Professionals. We have the Best Rates and the Lowest Fees available.!