Mortgage lenders using Fannie Mae guidelines will soon be able to bypass the collection of paycheck stubs, or direct deposit transmittals, for income verification. Instead, lenders may rely on employment and income information compiled by Equifax. You may be surprised to learn that your salary is part of a nationwide consumer database, but Equifax has been collecting this data from cooperative employers for several years.

Starting in 2016, Fannie Mae will also allow lenders to use alternative scoring models in their automated underwriting system. This will help home buyers who may lack a traditional credit profile, but have payment histories with landlords and utility companies. Meanwhile, borrowers who have typical credit profiles will still need to meet minimum score requirements.

There’s one more detail in the underwriting changes. In the near future, Fannie Mae will allow lenders to consider “trended” credit data. This means that not only will your credit score be evaluated, but your overall credit habits will be examined more closely. Namely, lenders could decipher your debt patterns, such as whether you allow your credit card balances to rise, or whether you pay your accounts in full each month.

The new underwriting guidelines should streamline the mortgage approval process for lenders and home buyers. It will also expand home ownership opportunities for underserved borrowers. However, credit evaluations are likely to become more detailed, due to the sophistication of automated reporting.

Ready to buy a Columbus home? As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.

Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!

Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!

Andrew Show
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
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