How Homeowners have the Most to Benefit from their Mortgages in 2017
Mortgages In 2017 Are Different, And Mostly Better
Homeowners New Mortgage Benefits in 2017. NSH Mortgage has the knowledge and tools to help you get the most out of your mortgage benefits in 2017. There has been many kinds of news about Fannie Mae and Freddie Mac guidelines for mortgages in 2017.
FHA made changes, too but, you probably care less about what they are than how they affect your purchase or refinance. It is important to know which programs and changes those are and how to get the most from them. Starting in, January 2017, some of these changes are already in effect. You may have to restart your application to benefit from them, however.
Buyers Pay Less on FHA Mortgage Insurance Premiums (MIP)
For mortgages closing on or after January 27, 2017, FHA will reduce mortgage insurance premiums up to 25 basis points or .25 percent. The agency says this could save most new FHA borrowers up to $500 annually. The change is only for new borrowers but, if you are a current FHA borrower, see if you can get your mortgage insurance premiums canceled.
Borrow More Money For Bigger Mortgages
Because of rising home costs, FHA, Freddie Mac, and Fannie Mae increased maximum loan limits both for standard conforming loans and for those living in or moving to high cost areas. This is the first increase in ten years for Freddie Mac. These changes can benefit all buyers and current owners looking to refinance.
FHA raised its national loan limit floor for single unit apartments, from $271,050 to $275,665. For high cost areas, FHA’s ceiling increased meaning you now can borrow a maximum of $636,150 from $625,500.
Conforming And Government Limits All Changed
Freddie Mac and Fannie Mae also changed their limits for a single unit apartment or one family property. For all three agencies, there are different limits for multi unit residential properties, and borrowing limits depend on local housing prices. That was especially good news if you live in areas the highest cost housing like DC, California, Hawaii, Guam or Alaska.
Other limitations may apply, so you should learn more by asking your mortgage lender to get the best deal on your mortgage in 2017. If prices are anything above the standard conforming limit with both conforming and nonconforming programs, and find that the conventional loans usually are costlier to borrowers.
Borrowing Requirements Change For Business Owners
Freddie Mac added new income stability determination rules that apply to business owners. They consider business revenue sources and the health of the applicant’s industry. Freddie Mac acknowledges that self earned income can fluctuate. They also recognize differences in available paperwork to prove income eligibility for mortgages.
The new rules do not alter Freddie Mac’s changes of last summer. But they make income verification easier for some. They also allow for industry differences that make one business owner’s income more stable than another’s.
The update only clarifies borrowers’ necessary proof of income documentation, but does not reduce the analysis required by lenders. For example, now business owners can provide a signed IRS form showing you e-filed genuine certified paper copies of signed forms.
You also can submit business documents that prove your business is in an industry or location that means it will generate the revenue that helps you maintain a reliable income. Because lenders need to do a deeper analysis of your business income, they may request more documentation, too.
New Income Verification Rules For Job Holders
Fannie and Freddie also considered employment characteristics in different industries for underwriting mortgages in 2017. This year, lenders will consider your employment status and industry when determining your income stability, great if you are in environmental technology. Not so great if you are a photographer or banker.
Similarly, if you generate commission income, the amount counted against business deductions changes this year. Borrowers receiving less than 25 percent of income from commissions no longer will have their income reduced by the amount of the business expenses reported on the tax returns. That allows you to qualify for a bigger mortgages, if you want one.
Again, because there are new base wages and requirements for commissions, lenders must do a closer income analysis. That may require job holders to submit additional paperwork.
Get That Condotel You Have Always Wanted
If you have been considering buying a condotel, a unit in a hotel that has converted into condos, now might be the time. Some experts suggest caution investing in these. But, under the right conditions, this could be the best change to mortgages in 2017.
Freddie Mac revised their rules make more condos in buildings that were previously considered hotels eligible for financing warrantable, but they need to meet certain requirements. One important prerequisite is condotels must be part of gut rehabs and no longer function as hotel rooms. The unit owners must fully own and control both their condos and all the common elements of the building.
That includes all buildings, roads, parking facilities, and amenities. Neither the developer nor the HOA can own or control those aspects of the property. Your condo cannot be a timeshare, either.
As significant for single unit investors, Freddie Mac will treat condotels like other condos if:
- No single entity owns more than ten percent of the units in a project, including the developer
- At least 51 percent of the units will be owner occupied
- Fewer than 15 percent of the units can be behind with their association dues
- Commercial space cannot exceed 25 percent of the total building square footage.
Keep in mind not all mortgage lenders are experts in condotel purchases. Ask when you shop for a loan.
Go Greener With Solar Panels
You may already know there are some real benefits for owners or lessees of home with solar panels. But what makes this one of the best home mortgage buying programs of 2017? One reason is increased appraisal values for those homes under specific conditions, which also is valuable for resale.
Another is tax credits for these homeowners. However, it provides a few caveats for getting this buying decision right. Location matters so you cannot buy just any home with solar panels.
If the home is not in a neighborhood where they are somewhat common, they may not count at resale. The value of solar panels on a home is based on comps. An appraiser must be able to find other homes near a property to apply a solar panel adjustment to their appraisal. But, homeowners have to own those solar panels since leased panels cannot be used to increase a home’s value, but are allowed if sellers meet certain transfer restrictions. Understand how solar panels get valued, know about the rules in your state and check with your mortgage lender before buying a home that uses solar energy.