Brian Wickert and David Wickert rejoin forces to discuss housing trends both nationally and in the state of Wisconsin, and share their predictions for what the mortgage world will look like in the coming months.
This week on the Accunet Radio Show:
Brian and David Wickert share the importance of income stability when buying a home, discuss recent trends in interest rate, update you on Fannie Mae and Freddie Mac, and more on this week’s Accunet Mortgage and Realty Show.
This week’s highlights
- Be careful taking a new job during the loan approval process. If you forget to tell your lender, you could be subject to $1,000,000 in fees and up to 30 years in prison for signing documents that don’t reflect your current situation.
- Now is a great time to refinance your home; Moving a $250,000 balance from 4.5% to 3.75% could save you around $1,300 a month in free money.
- 99% of buyers aren’t involved in a lawsuit during the home-buying process. But what if one is? Read more to find out.
Questions during the show? Call or text us at (414) 799-1620!
Getting a mortgage with a new job
If you get a new job in the middle of the home-buying process, you need to tell your mortgage lender as soon as possible.
To get the new income verified before the purchase can proceed, your lender will require updated documents verifying your employment and pay. This could include:
- Verification of Employment (VOE)
- Recent pay stub
- A signed letter explaining the situation (depending on where in the loan approval process you are)
Why do I need to tell my mortgage lender I got a new job?
Well, when a lender is preparing your documents for closing, they need to list and verify certain information, including your income and place of work. If that information changes, and you sign documents listing false information, you’re liable for up to $1,000,000 in fees and 30 years in prison.
What the US Treasury recommended to the FHFA — and how it could affect you.
In previous shows, we’ve mentioned how Fannie Mae and Freddie Mac have reduced the maximum allowable income for their HomeReadyⓇ and Home PossibleⓇ programs to ~$65,800 (this depends on where you live, and the area median income – check your area here). Well, we think even bigger changes are coming. Here’s why:
On September 5, 2019, the U.S. Department of the Treasury put out a 53-page report proposing changes to the American home financing system. It called on Congress to make changes (fat chance), and if that doesn’t happen (it won’t), it called on the Federal Housing Finance Agency (Fannie Mae and Freddie Mac’s regulator) to consider the following:
- Stop giving their profits to the US Treasury (they’ve been doing this for the last four years), and instead, keep their ~$10B-$12B in annual profits
- Re-evaluate why Fannie and Freddie facilitate cash-out refinances
- Re-evaluate why Fannie and Freddie are helping people buy vacation homes
When this happens, and we’re betting it will, it’ll probably happen fast. As in, within a matter of weeks. Accunet had already seen a few clients who want to move up their vacation home purchase dates in response.
- Evaluate the overlap between Fannie, Freddie and the FHA on low down payment loans.
Right now, here’s how they work, respectively:
Loan Type FHA Fannie & Freddie Restrictions None Be a first-time home-buyer Minimum down 3.5% 3% Loan limit $327,750 $484,350 Highest home price
for minimum down)
Brian predicts that, sooner rather than later, Fannie and Freddie are going to restrict the current 3% down payment to only the HomeReadyⓇ and Home PossibleⓇ programs, which are for buyers with limited income.
Can you buy a home with a pending lawsuit?
While it’s not required, mortgage lenders are allowed to (and should) ask borrowers if they’re a party to a lawsuit. 99% of the time, they’re not. But, if they are, the lender is obligated to follow-up on it.
On the off-chance that the borrower is involved in pending litigation, it’s still possible for them to buy a home. However, they’ll need to prove to their lender that they have sufficient funds to make payments in the event they lose the lawsuit.
In Accunet’s case, we recently had a borrower involved in a lawsuit in which they were the defendant; they were being sued for $400,000. So, we called her attorney and got a copy of the lawsuit. We discussed what the lawsuit was about, and then, we made sure to document the borrower’s funds. Since the borrower had enough money to make payments even if she lost the full $400,000, and we were able to prove it, the deal could move forward without a hitch.