These days, to get a mortgage here in Las Vegas, you have to:
- Have great credit
- Have amassed a down payment of at least 20 percent
- Take your prayer rug to the bank and face Mecca
But things are fixin’ to change, soon. Last week Timothy Mayopoulos, the chief executive of Fannie Mae, announced plans to make it easier on the first two fronts. (You still have to have your own prayer rug.) The goal: to extend mortgage credit to real people!
The good news: The government-backed agency will accept down payments as low as three percent. Yeah! since down payments can be a big hurdle for prospective home buyers.
The kinda good news: Fannie Mae loans will require private mortgage insurance for the life of the loan. In the past, homeowners could cancel the insurance premiums when their equity grew to 20 percent.
In the days before the real estate crash, Fannie Mae accepted loans with three percent down payments. During the crash it raised the rate to five percent. But realistically, lenders wanted 20 percent or more.
For the record, Fannie Mae makes no loans. It buys loans from lenders, packages them into securities and then sells the securities to investors. They guarantee the mortgages for a fee and then pay investors if the loan defaults.
Will lenders be more likely to make three percent down payment loans knowing Fannie will buy them? That’s what those prayer rugs are for! I certainly hope so.
This change will really help Las Vegas home buyers. When you want to go house shopping, call, text or email!
Beth Ellyn Rosenthal
The Las Vegas Real Estate Concierge
Managing Broker, Nevada
702.324.6911 Talk. Text. Viber (SMS)
firstname.lastname@example.org (Google Hangouts)
MBA: L’ecole du Hard Knocks
Licensed in Nevada since 1996: I have previous