For a long time, it has been possible for a husband and wife couple to buy property on the merits of only one spouse’s credit rating and employment history. This has helped a lot of couples get into homes when one of them is still recovering from a bad financial history.

That may soon no longer be possible. The Federal Housing Administration (FHA) has already begun to require that both spouses be scrutinized before it will underwrite a loan. It’s only a matter of time before Fannie Mae and Freddie Mac join the party.

But wait, there’s more. The new policy also affects estranged couple in the middle of a divorce. The proceedings may need to be done and final in order that both parties not get re-entangled in the purchase of property by one of them.

Gifting of downpayment assistance from parents, grandparents, rich uncles, whomever – a long time staple of home buying - is also going to be more difficult. It used to be that only a gift letter was required to satisfy loan underwriters. Lenders may not look to make sure the donor isn’t themself in default or having financial difficulties. I’ve personally seen this happen recently with one of my buyer clients.

With mortgage losses continuing to mount, banks are becoming ever more cautious about who they will bless with a funded loan.

For a more in-depth discussion of the issue, read this blog post.

Jeff
Good homes, good living!

http://www.SanJoseRealEstateSource.com
http://www.SanJoseShortSales.com

Jeff Spoelstra is a California residential real estate agent and REALTOR with years of experience making buying or selling property as easy and painless as possible. It’s my mission to provide the information you want and the help you need to get the home you’ll love.

Disclaimer: The above information is deemed reliable but is subject to change at any time and is not guaranteed to be accurate nor are there any warantees either express or implied. It is not intended to be construed as financial, legal or tax advice. California DRE license #01470808.