Here's the latest tip from the mortgage experts at Mortgage Support Services
Fannie Mae has recently made some changes to the way they consider risk factors when underwriting a loan. A risk factor is something that makes a loan more risky or less risky. Here are the changes:
-- The presence of a co-borrower no longer makes a loan "significantly" less risky. However, if the co-borrower has a strong credit history, then the risk is reduced somewhat.
-- If a borrower has less than 2 months of reserves (principal, interest, taxes, insurance, mortgage insurance, HOA fees), then the risk of a loan is increased. If they have more than 6 months reserves, then the risk decreases. This does NOT mean a borrower is required to have reserves. Reserves requirements are determined by the individual loan underwriting guidelines, or by the underwriting software.
-- Self-employed borrowers are no longer considered to be more risky than salaried or hourly employees.
Remember to check the Mortgage Support Services blog for access to all of our tips. We're adding one tip a day to the blog until the hundreds of tips we've sent out in the past are all posted. Check out this great resource at the following site:
http://themortgageexperts.blogspot.com/
In each email tip, we include the answer to a question that real estate agents have asked us at seminars we have taught. If you have a question for us, send it along and we'll include it in a future email (we'll also call you right away with the answer).
Today's agent question:
Q: How long before a closing must a mortgage broker give a borrower the final settlement statement (HUD-1)?
A: Under federal law, the borrower has a right to request the HUD-1 24 hours before the closing. Under Colorado law, the mortgage broker must provide the borrower with the HUD-1 one day before the closing, unless the borrower waives their right to receive it.