Student Loans and Qualifying for a Mortgage

mortgageporter_student_loansEDITORS NOTE 4/13/2016: FHA has revised their calculation requirements for student loans! It is now the greater of the actual payment or 1% of the balance or what is reported on the credit report. 

My son graduated from Seattle University a few months ago and has recently landed his first “real job” in the tech world. I couldn’t be more proud of him!  Many first time home buyers, who have gone to college may be surprised to learn how student loans may impact how much mortgage they qualify for. Different types of mortgages have different guidelines with how they treat student loans and other debts with deferred payments. The guidelines below apply to both home purchases and refinances…and, of course, are subject to change.

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Want to stop your rent from increasing? Buy a home.

It’s no secret that rents, along with home prices, in the greater Seattle area have been trending higher. Rent Jungle reports that as of March 2015, the average rent for a 2 bedroom apartment within a 10 mile radius of Seattle is $1907. This is up 4% in the last six months.

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Fannie Mae offering Home Buyer Incentives

mortgageporterraiseFannie Mae is offering first time home buyers up to 3% towards closing cost when they purchase a Fannie Mae HomePath property. On a $300,000 home, 3% would be up to $9,000 towards allowable closing cost!  A Fannie Mae HomePath property is a home that Fannie Mae has foreclosed on and now owns.

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Tips on how to save up for a down payment

iStock_000009450603SmallGet Rich Slowly recently posted How to Save Up for a Down Payment Fast.  I’d like to respond to some of the ideas offered in GRS’s post from a Mortgage Professional’s viewpoint and offer my advice.

Here are some of the suggestions on How to Save Up for Down Payment Fast along with my 2 cents (in italics).

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The FHA HAWK Program for Homebuyers

Osprey_muralA few weeks ago, HUD announced a new program created for first time home buyers which rewards them with reduced mortgage insurance premiums after they participate in home buyer education and one-on-one housing counseling. HAWK or Homeowners Armed with Knowledge is a pilot program set be released in two phases on a limited basis.

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First Time Home Buyers Guide Book

Check out the latest edition of Your First Home Mortgage Guide.

Although I wrote this book with first time home buyers in mind, a majority of the content is relevant to all home buyers.

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What is a Mortgage Credit Certificate or MCC?

Mortgage Credit Certificate (or also referred to as MCC) is a federal tax credit available to first time home buyers who meet certain requirements. With the tax credit, eligible home buyers can adjust their their withholding to take advantage of the savings monthly instead of waiting until they file their taxes.  The MCC remains available as long as the borrower owns and occupies the property.

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WSHFC now offers reduced mortgage rates with no DPA

2013-03-07_0746The Washington State Housing Finance Commission offers several mortgage programs with various types of down payment assistance for home buyers. In order to qualify for the program, home buyers need to have household income of $97,000 or lower and attend a WSHFC sponsored home buyers class.

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