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What Are Fannie Mae and Freddie Mac's Guidelines On Student Loans! For First Time Home Buyers 2020 馃彙 - YouTube
Channel: Jennifer Beeston
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It's student loan week you get a loan you get a loan you get a loan and you get a loan. Yeah
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Oh wait, that's not as fun. Uh, you know how oprah gives away stuff. That was cool
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That's like the stuff worked. Right? Do you remember that with the cars? Oh my god. That was such a moment in the 90s
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That's my jazzer size for the day by the way now, I don't have to work out
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Anyways, um student loans. Wow. Yeah. Everyone has them
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So as a lender, I see them on every credit report when I don't see them
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I'm, actually like hey, how'd you pay for school? Like can I can I talk to your parents?
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Like do they want to be my parents? Like that's awesome. Um
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But they're on every credit report. So it's definitely something that we need to talk about
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Especially since because of covid student loans, like the federal ones have been put into a forbearance
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So as a lender when I pull your credit
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The normal payments don't show up
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It just shows up as a zero
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But as a lender I have to calculate for what your payments actually are going to be
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And that's what we're going to talk about. Today. We're going to talk about fannie mae freddie mac
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What are their guidelines on student loans and what to be prepared for?
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So the first thing guys and look you may be working with me. You may be working with another lender
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I'm kidding. Um, regardless you need to ask your lender. Hey, did you calculate my student loan payments?
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Seriously, because what happens is everything's tech right now, so people fill out online applications
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The computers are issuing issuing pre-approvals and I always tell everyone like yeah, that means nothing
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It means nothing if you fill out my online application and you get an immediate approval
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It's a computer pre-approval. It means nothing because the biggest place the computer misses is student loans
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So if your credit report pulls and it says the payment right now is zero
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That's what's going to get imported into the system when the system's running desktop underwriting which many of these online
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applications do for the bigger mortgage players
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It's not calculating the way an underwriter is going to look at your student loans
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And if you have a hundred two hundred even fifty thousand dollars in student loans
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It could be the difference between qualifying and not qualifying
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So today i'm going to go over fannie mae and freddie mac's current guidelines. So this video is filmed in october of 2020
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I state that because these are the guidelines as of now in lending guidelines change guys
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They can change on a dime
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So it's very important that you speak with your lender
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If you are concerned about this verify that the guidelines are still accurate. Okay, and if your lender is like student loan guidelines
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You should dump them and call me. Um, okay
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so
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Fannie mae and freddie mac. So how do you know if your loan's going to be fannie mae or freddie mac?
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conventional mortgages meaning 510 400 or below
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are
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99 of time gonna be fannie mae or freddie mac. That's where conventional mortgages gets sold
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I just say like that one percent because maybe you're doing some bank statement program or a portfolio loan
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But if you're doing a 30-year fixed under that price range
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The lenders are going to be selling your loan to fannie mae or freddie mac. So that's whose guidelines
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We're going to be following now
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There are specific parts of the country where those fannie mae and freddie mac loans are higher than 510 400
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California, there's quite a few counties
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Where it goes up to?
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7.65 so that's not something for you guys to be super worried about but if you're looking at a million dollar loan
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This does you're not going to be fannie mae or freddie mac. Okay
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Unless it's a multi-unit. So
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Fannie mae freddie mac conforming loans. Let's talk about it
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So here's the deal with fannie mae
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and freddie mac if your
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loan
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Says a specific payment on the credit report. We will go with that specific payment
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Okay
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Now if it says zero because it's in forbearance, which is what i'm seeing right now
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Fannie mae the way we have to calculate it is one percent
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So if you have a hundred thousand dollar student loan, I am going to put a thousand dollar monthly debt
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into
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your uh liabilities
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Okay freddie mac is only half a percent. So with freddie mac i'm going to be doing 500
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As your monthly payment. Okay. Let me check my notes real quick
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Yeah, that's right and I check my notes because guys this is like tricky
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It's like okay one is hitting you with one percent. The other one's hitting you with half a percent
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Okay, so so far I would say if you are worried about your debt to income
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Freddie mac is winning, right they're winning so far now if you're in a income-based repayment plan
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Okay
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If you're in an income-based repayment plan
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They will both take whatever that amount is
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however
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If it is zero fannie mae will go with zero, but if it is zero freddie mac will go with half a percent
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Okay, so now fannie mae is winning. So if you're looking at it from okay, i'm not an income based repayment
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I'm worried about my debt to income freddie with the half a percent is going to be the least brutal to you
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If you're in an income based repayment plan
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Fannie is going to be the least brutal to you. Okay. Now you're a borrower. Why do you even need to know this?
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You don't really however you do if the lender you're working with is not up to date on their guidelines
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Because what happens a lot is people go
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Oh, well, they said I don't qualify because of my student loans and we'll look at it and we'll be like it's fine
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And it's as simple as us going to freddy instead of fanny or fanny instead of freddy, depending on what the situation says
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That's all we're doing. So it's really important that you're working with a lender that knows their guidelines. Okay?
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I think that was the big i'm just looking if there's anything else critical
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Unconventional because we're going to do va tomorrow in fha on thursday. You know what we can just do fha today
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um
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So fha is a little bit weird. Fha is super brutal
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So basically the way that it works is even if you have a payment on your credit report
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So let's say your payment is 200. Let's say it's a 200 000 student loan
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Oh that hurts and your payment's 200
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Well, if you're doing an fha loan, they're going to say that's great that your payment's 200
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But we're actually going to hit you with 2 000
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2 000
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Yeah 2 000
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so
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Fha on student loans is actually the most
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Aggressive in terms of how much of a payment they hit you with between all three
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The reason why people end up doing fha loans is usually because of a higher debt to income
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Or lower credit scores or something like a short sale or a bankruptcy in the past or they're trying to push over a conforming
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Loan limit and do three and a half percent down. So the student loans can be a real
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Sticky point if you're like, well my debt ting comes higher i'll go with fha
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It actually may be even higher than if you had gone with conventional because of that one percent
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Especially if you have a low payment on your student loan already
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So the key thing about this is you need to make sure you're working with a lender that understands student loan guidelines
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And how to utilize them to your best benefit now
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If you're like well gosh, I it says zero payment right now. Why won't they just do that?
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It's not realistic guys. We all know it's not going to be zero forever
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I don't want to get you in a house and then you start getting student loan payments
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And you can't afford your house and you're calling me crying. That's horrible
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So I do think there's a good reason for all these guidelines
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It's just important that the lender you're working with knows about them and utilizes them accurately
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And the biggest thing I see right now and my team and I talk about it every single week
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Every single week because when the credit when the apps come over to us
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If you're not digging into that credit and calculating those payments, it is the difference
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It can be the difference between an approval and a denial and sometimes those student loans are buried in the liabilities
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So if you're working with another lender
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You know and you've done an online application you really do want to reach out and say hey
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You know i'm so looking forward to working with you
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I just wanted to make sure that you hit me with student loan payments and if they go
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What do you mean?
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just be like
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well
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I was just watching this video and it said that because of forbearance a lot of stuff's coming over to lenders as
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zeros
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and sometimes lenders miss it and then it could affect my debt to income and I might not qualify and if they say oh
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Yeah, yeah, we already did it. Great. Cool
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but if they're like oh, oh
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Oh
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Call it out guys
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Sometimes you have to be your own advocate and I would say with all the stuff that i'm seeing in lending right now
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Lenders are doing the best that they can but we're having stuff thrown at us every single day
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So it is possible that someone could slip and not calculate it and it could be the difference between you getting that house or not
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So you want to make sure that your lender's done it?
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And then if it's not working you want to make sure that they're exploring programs that are a little bit more
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Friendly friendly to your personal student loan situation. So I hope this has been helpful
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Um, if you are a veteran tomorrow guys tomorrow we're talking about va and student loans
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