When you’re buying a home, there are multiple ways that you can go about paying for it. You can secure a mortgage by contacting George Waldkirch, he offers Fannie Mae home loans. Chances are, this isn’t the first time you’ve come across the name Fannie Mae. When the recession hit in 2008, Fannie Mae was bailed out by the government along with its counterpart, Freddie Mac. Technically called the Federal National Mortgage Association, Fannie Mae exists to help make homeownership a reality for families across the country, including those that may be struggling to stay afloat financially.
The fact is, Fannie Mae has been a major player in the housing market since it was established way back in 1938 in the midst of the Great Depression. By the end of the first quarter of 2015, Fannie Mae had backed the financing of about 190,000 homes and backed more mortgages for single-family homes than anyone else in the secondary mortgage market.
How Fannie Mae Functions
Because it’s not part of the primary mortgage market, Fannie Mae does not lend directly, those loans come from local banks and brokers. Fannie Mae routinely buys mortgages from banks and other private lenders, puts them together and turns them into mortgage-backed securities. Then, it sells those securities to various investors worldwide.
In doing so, Fannie Mae ensures that there’s liquidity in the market, meaning that mortgages can easily be bought and sold. And it leaves private lenders with enough security to work with more borrowers.
Fannie Mae Lenders
In order to partner with Fannie Mae, lenders must go through an application process and meet certain guidelines. For instance, they are not allowed to do anything shady when processing subprime loans for people with poor credit and others who fall short of income requirements.
In exchange, Fannie Mae assumes the risk attached to borrowing and protects these mortgage lenders when homeowners don’t comply with their loan terms. It does business with so many different lenders that sometimes homebuyers aren’t even aware that their loans are guaranteed by Fannie Mae.
Is your loan backed by Fannie Mae? To find out, simply go to their website and use their loan lookup tool. You might be pleasantly surprised to discover that Fannie Mae secured your mortgage and that you might have a shot at some perks like the Home Affordable Refinance Program (HARP).
Fannie Mae Loan Requirements
Fannie Mae only deals with conforming loans for residential properties, backing mortgages up to 417,000 (or $625,500 if you’re buying a single-family home in a high-cost area). If you’re interested in getting a jumbo loan, you’ll just have to look elsewhere.
To qualify for a Fannie Mae home loan, you’ll need to contact George Waldkirch and he will help you complete a uniform residential loan application. It’s a good idea to set aside some time to get all of your financial documents in order, including your bank statements and tax forms. I will look at multiple factors to determine whether you’re eligible for a loan, how much money you’ll be able to borrow and what your loan rate will look like.
Securing a loan may be a little difficult if you don’t meet the criteria. Although there are exceptions, your debt-to-income ratio (how your income stacks up against the amount of debt you have) typically can’t exceed 36% of your gross monthly income, unless you have a good FICO credit score and financial reserves. To get a mortgage with a fixed interest rate, you’ll need a credit score of at least 620. A minimum score of 640 is needed to qualify for an adjustable-rate loan.
Having a higher score can give you access to lower interest rates. You could also make a down payment as low as 3% if you’re buying a house for the first time. But if you’re trying to get a Fannie Mae loan with bad credit, you may have to go the extra mile to prove that you can handle a mortgage.
If that’s your dilemma, you could apply for a mortgage backed by the FHA, since it tends to be less stringent with borrowers whose scores are in the 500 to 580 range. You could also highlight the fact that you’ve kept up with the last 12 months rental payments, or agree to make a larger down payment to entice a lender to give you a mortgage.
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