New Fannie Mae rule for using social security income to get a mortgage

Are you or someone you know planning to purchase or refinance a home using Social Security income? If so, there’s some good news! Fannie Mae has recently announced new guidelines that will make it easier for families with Social Security income to qualify for a mortgage loan…

Under the new guidelines, mortgage lenders can now treat 15% of Social Security income as qualifying income grossed up, without having to document whether the income is non-taxable. This is particularly beneficial because it gives lenders the ability to gross up your income, thereby increasing your purchasing power and making it easier to qualify for a residential mortgage loan.

For example, if your Social Security income is $2,500 per month, grossing it up by an additional $375 a month (15% of $2,500) will lend itself to an extra $20,000 of purchasing power, depending on the purchase price, loan amount, and total monthly mortgage payment.

In today’s challenging mortgage rate environment, every little bit helps, particularly as it relates to having a rule on the income ratio. Most mortgage companies generally allow a debt-to-income ratio of up to 50% on conventional financing, up to 56.99% on FHA financing, and up to 64% debt-to-income ratio on VA financing. Some conventional mortgages even allow a debt ratio at a maximum of 51%. The higher the debt ratio requirement, the more flexibility you have, making it easier to qualify for a mortgage loan to purchase or refinance a home.

If you’re interested in seeing how this new change will affect your qualifying numbers, start today by getting a complimentary mortgage rate quote. Don’t miss out on this opportunity to increase your purchasing power and make your dream of owning a home a reality.

 

 

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