There’s some good news for buyers using Conventional Loans. As of September 18, 2021, Fannie Mae will be averaging the middle credit score of joint borrowers for determining eligibility. Right now, all borrowers must individually have a minimum of 620 to qualify for their program. As of this change, they will take the middle credit score of each borrower and average them. For instance, if one borrower is at 600 and the other borrower is at 700, the average score will be 650 which is above their 620 minimum and that loan will qualify for their program. However, interest rates and Private Mortgage Insurance premiums will still be calculated on the lower middle score of the borrowers. In the example above, the interest rate and Private Mortgage Insurance Premium will still be determined by the borrower with the 600-credit score. This may still pose a problem for borrowers with below 620 credit scores when it comes to Private Mortgage Insurance. Some PMI Companies still have minimum scores so final approval will depend on which PMI Companies a specific lender uses.
As of today, Private Mortgage Insurance companies have not published their new rate quotes and we are unable to prequalify borrowers for this new enhancement until September 18th. If you have a customer that you would like to see if they are eligible based on these changes, please let me know and as soon as this is available, we will re-evaluate the borrower’s eligibility.
Dawn Michelle Schweiker,
Dawn Schweiker is a mortgage loan broker with over 25 years of experience in the mortgage industry. She has the knowledge and experience to help guide borrowers and real estate agents to the programs that best suit their needs. As a loan broker with Premier Mortgage Partners of Florida, she has the ability to not only shop interest rates between lenders, but she also has access to over 300 mortgage programs to help borrowers with a wide array of products.