This is a YouTube video titled "Fees for Higher DTI Ratios? #homeloans #firsttimehomebuyer #mortgage #mortgagerates" containing a discussion about Fannie Mae's policy on debt-to-income ratio fees and how changes were made to remove additional charges for borrowers whose income fluctuates during the loan process. The content is an explanatory talk focused on mortgage loan fees and consumer impact, created in May 2023.
Fannie Mae was going to charge a 0.375% fee if your debt to income ratio exceeded 40%. So Fannie Mae conventional loans, they could go up to 50%. If you get above that 40% tier, they were going to tax you 0.375% in pricing. So for every $100,000 of the loan amount, that'd be $375 added on or about 0.125% on the interest rate. It was an added risk level. But the problem is, let's say we calculate the income up front and it's 38%, let's call it so kind of close to that 40% limit. And let's say as you continue working and you have variable income, overtime bonus, commission type income, and it gets updated through the loan process because you're still working, days are going by and let's say you, you miss a little time because you're planning on moving, well, that hurts your income. That could bump up your ratio. You could go over 40% mid loan process and that would add a tax on midway through. The brokers in the world pushed back on Fannie Mae and they finally listened and they removed this. So big win for consumers.
