Fannie Mae updated its rules to make mortgages cheaper for first-time buyers. The changes affect interest rates, credit score requirements, and mortgage insurance costs. Realtors and buyers both benefit from wider loan options.
New update for first time home buyers. Fannie Mae is making home loans more affordable. It always used to be a first time home buyer was generally considered to be a little bit higher risk or they pay a little bit higher rate for that. But now Fannie Mae is coming in and saving the day. This helps. Two different classifications. So generally if you're a first time home buyer putting less than 10% down, you pay a higher rate. But Fannie Mae is updating that and now you get the same interest rate benefit as somebody putting 20% down. And the second classification is those in the 680 to 740 credit score range. You generally pay an even higher risk tolerance, but Fannie Mae is removing that. So generally people in that middle ground credit tier, they kind of have to decide between FHA or conventional. This makes conventional a little bit more enticing. And the reason why that's important is conventional removes your PMI. Once you get 20% equity with FHA, PMI is on for the life of the loan. You have to refinance to get the PMI off. So if you're a first time home buyer or realtors, if you have a lot of first time home buyers, this is a fantastic video to share with them because this makes things that much more, more affordable in today's housing market. Many lenders are going live at this on January 1, 2023. McGowan Mortgages is going live right this second today.
