The long standing question of whether or not one can afford a home has not only perplexed people, but also hindered some from even trying to investigate whether or not they can afford home. Typically, it all comes down to how you use you money...but Fannie Mae has also made it a little bit easier to be eligible recently. Take a look at the recent changes Fannie Mae and FHA loans have undergone and see whether or not you are eligible!
More lenient qualifications
While FHA loans are primarily used for those with “less than perfect credit,” it is still a true assessment to your current financial standing.
The biggest change that has been made is how strict the debt-to-income (DTI) ratio is, increasing its max. So that means that even though you may have debt that has previously kept you from qualifying for an FHA loan, take another look.
What is a DTI?
Your debt-to-income basically refers to how much debt you currently have, compared to how much you make. Guidelines determine whether or not you are a qualified purchaser of a loan using your DTI as a way to claim whether or not you could handle your current debt, as well as the additional debt a mortgage could bring.
With so many case studies concluding that it is typically cheaper to own a home and pay a mortgage, as opposed to not own and pay a rent - it’s no wonder that Fannie Mae is making it easier to qualify for an FHA loan - as it is a more logical way to help purchasers get out of debt.
If you were on the cusp of qualification before the changes were made, be sure to reach out to Mortgage Advisor to reevaluate your eligibility and get you back on the road to homeownership.