Last week, Fannie Mae issued a lender letter containing additional requirements for self-employed people looking for a home mortgage loan. Income from a business affected by changing economic conditions is not necessarily ineligible for use in qualifying a borrower for a home mortgage loan, but additional information will be required to determine if the income is stable. As of June 11th, lenders will be required to follow these new standards when qualifying a borrower for a home mortgage loan. The documentation now required by Fannie Mae includes a year-to-date profit and loss statement reporting revenue, expenses, and net income as well as the two most recent depository account statements. If these two documents do not support each other, additional statements or other documentation to support the year-to-date profit loss statement must be collected.

Quite a few economic metrics in recent weeks can lead one to believe the housing market may be rebounding from the COVID-19 drop. The beginning of the flattening of the curve, the end of most stay-at-home orders, the 10-year yield approaching 1%, the decline of credit stress, and data from hardest-hit sectors starting to trend up are all positive signs things may be returning to normal. All of these metrics are reason for optimism considering the housing market and economy as a whole.

The Federal Housing Finance Agency has recently announced that Fannie Mae and Freddie Mac will now allow borrower’s who went into COVID-19 induced forbearance to refinance their loan or buy a new home as long as they have made three straight monthly payments after their forbearance ends. In addition, last month Fannie Mae and Freddie Mac announced that they would begin buying loans that went into “first-payment forbearance”. This would mean loans where the borrower went into forbearance within the first month of the loan closing could be purchased by Fannie Mae and Freddie Mac. This policy was set to expire at the end of May, but the FHFA decided to extend it through the end of August 2020.

For the sixth consecutive week, the amount of people applying for loans to purchase homes has risen. According to Freddie Mac, the 30-year fixed-rate mortgage has hit its lowest point since they’ve started recording rates, resulting in the higher number of loans. The previous record low for interest rates was at the end of April. This now marks the third time in 2020 that the mortgage market has recorded a historical low for interest rates. One factor leading to these low rates is the decreased financial volatility of the market in recent weeks. Consumers looking to buy homes in the coming months should try to take advantage of these low rates and judging by the uptick in purchase applications, they seem to be doing so. 

While most people may be expecting a stimulus check from the U.S. Treasury, some people should be expecting prepaid debit cards instead. These prepaid debit cards are coming in plain envelopes from “Money Network Cardholder Services” in Omaha, Nebraska which could further confuse some people. In order to ease this confusion, the IRS itself has tweeted recently confirming that millions of Americans will be receiving their stimulus through these prepaid cards. Consumers have been using their stimulus money to help with groceries, car payments, and rent payments among other things, but what you may not know is it can be used for a down payment on a home as well. When checking your mail moving forward, make sure to look extra carefully!

Mortgage applications to purchase a home rose 9% from last week. This marks the sixth consecutive week home mortgage loan applications have risen. Since the beginning of April, the total number of mortgage loan application numbers have risen 54% marking a strong recovery in the mortgage market. Along with the rise in mortgage applications, a housing location preference shift may also be in play. Some analysts believe the market may move from small downtown apartments to more suburban markets with room for backyards and home offices.

During this time of decreased travel, owners of Airbnb and other rental properties are looking to liquidate their assets. This may create the opportunity for good deals within an already low interest rate environment. With the rise of virtual open houses, you can see a higher variety of properties using less time, allowing you to get a greater feel for the market in your local area.

Buying your first home and getting a home mortgage loan is a big step in any new homeowner’s life. Here are some things to help you prepare and avoid unnecessary stress during the home buying process.

Have a budget in mind: Prepare a budget that includes home owners association fees, insurance, taxes, and of course the cost of your home mortgage loan payments. Having this budget will give you a starting point on what type of home you want to buy.

Find a trustworthy real estate agent: Having an agent you can trust will relieve stress in the home buying process. Your agent should have your best interests at heart and be an extension of you during this process.

Make time to do some research: Researching the location of where you want to live is very important. In addition to the information your agent supplies you, do some personal research. Figuring out what type of home, the fees that come with it, and other determining factors will make you more confident in your decision.

Establish loan parameters: In addition to figuring out your budget, you need to determine how much money you will take out via a home mortgage loan. Determining which type of home mortgage loan you prefer is also necessary during this step. Contacting a loan officer to help discuss your home loan options during this time could help provide clarity as well.

 

 

Working from home is causing workers nationwide to feel the pressure to be constantly available. The responsibilities of everyday life (paying your mortgage, cleaning the house, etc.) remaining constant and the addition of homeschooling and caring for the sick or elderly are weighing heavy on Americans during this trying time. Being able to balance working from home and the ever-growing home life responsibilities has many people feeling burnt-out.

In order to feel happier and more energetic with all these restrictions on us, its important to designate time during the day and space within your home for yourself. Not every room and every hour of the day should be associated with work, but instead time needs to be taken to relax and recharge. In addition it’s important to take care of yourself through hydrating, eating well, exercising, and engaging with other people unrelated to work. When the work day is over it’s important to unplug and not have your mind in a constant state of worrying about work. Staying happy and healthy during this pandemic will help us all get through!