BREAKING: Conventional Loan Update | New Opportunity for Renters!

Conventional Loan guidelines have recently changed to help first-time homebuyers purchase a home! Watch this week’s video to find out the details.

Hi realtors and everyone else out there on social media it’s dawn connors and today we’re talking about a major change that happened within conventional loans that took place on september 18th i have to give credit to shikita hill real estate agent guru who unveiled this and reminded me of this change and so we’re going to talk about it today so on september

18th the underwriting engines for conventional loans have been updated and changed they now allow the uh reading of rental income for approval basis so what does that mean if you are currently a first time home buyer you don’t own a home and you haven’t for three years and you are renting a home and paying more than 300 a month in rent you can have that payment

Included in the analysis for in the analysis for your approval for conventional financing that is pretty awesome it’s not allowed it’s not done for any type of government loan like a veteran loan or an fha loan this is a new thing for only conventional loans and according to shaquita hill this is due to help about 17 of potential home buyers so let’s unpack it

A little bit more what do you have what are the qualifications in order to be eligible for something like this number one your you need to have at least a 620 credit score or no score and have 20 percent down number two as i said before you have to be a first time home homebuyer that means that you have not owned a home or been on title to a home within the last

Three years so you’re not on title you don’t own any other houses number three it this has to be your primary residence this purpose of this is not to buy an investment property or a second home a vacation home but your primary residence in which you’re going to live in the next thing you want to be conscious of is you have to have good debt to income ratios that

Simply means that you have to be living under your means and the new house that you buy you have to be able to afford it with your with your income that we can show and claim and otherwise i think those are the main requirements what happens is your your information is read through the underwriting engine so it ha your bank statements have to be able to be pulled

Electronically so rule number one is you have to pay by electronic means for your bank statements that means either by a check or buy electronic transfer directly to the landlord you can’t pay your mom who then pays the bill or you can’t pay your boyfriend who then pays the bill and you can’t write a money order or take out cash regularly each month and then pay

It because the underwriting engine will needs to be able to um get copies of your bank’s names for the last one year it has to happen for 12 months minimally and they will read those tac those bank statements through the underwriting system and be able to see those payments for the last 12 months and be able to give you an approval as if it’s a trade line much

Like a credit card or a car note that’s on your credit report oftentimes rent history doesn’t report on the correct to the credit bureaus if it does you’re very lucky and you have a great landlord system that that does that for you so otherwise if it doesn’t there’s been no resource in the past to be able to count that for a benefit to you to get your approval

So if you have been recently turned down and you are a renter and you have faithful rent history and it comes out of your bank accounts directly to the landlord either by check or electronic means then you should consider reapplying when you reapply you want to make sure that you have a lender that’s participating in this and has the ability to pull electronic

Bank statements and get approvals through fannie mae and freddie mac through conventional engines reading this information so that you can have this count towards your trade history it’s also so you know very good for those that are putting low down payments say three to five percent and also don’t have a lot of credit don’t have a lot of in-depth credit this is

Where it would be of value to you so if this is something that you think is valuable to you and your clients it’s shikita tells us that it is going to help about 17 of home buyers that wouldn’t otherwise qualify so having this trade line will definitely be of help and a benefit and it just started september 18th of 2021 so so if you’ve been recently denied for

Conventional financing go back and try again this is don connors at mortgage one providing fantastic mortgage solutions thanks for watching you

Transcribed from video
BREAKING: Conventional Loan Update | New Opportunity for Renters! By Dawn Connors