Hi Friends & Neighbors!
You may not have asked for it, but they gave you one anyway.
A credit score, that is!
If, like most people, you need a loan to buy a home, your credit score plays a big role in the process. Unfortunately, your score may not perfectly reflect how reliable you are as a debtor. If you save diligently and avoid going into debt for purchases, your credit history may be lacking — making loan approval that much harder.
But there’s good news for first-time buyers looking to break free of the rent cycle!
As of September 18th, mortgage giant Fannie Mae will incorporate rent payments into their automated underwriting system. With this update, consistent rent payments will improve an applicant’s chances of being approved, while missed payments will not hurt your ability to qualify.
The change could make a big positive impact for many prospective homebuyers. Fannie Mae estimates that 17% of renters who were rejected for a loan would have actually been approved if their rental history had been considered.
With Oahu home values up about 30% year-over-year, this doesn’t mean that buying will suddenly become a walk in the park. But since loan pre-approval is an important early step, this system update is a welcome change.
As always, please don’t hesitate to reach out if you have any questions. We’re happy to help you and anyone you send our way!
Warmly,
Mike & Lisa Styring
Hawaii Realty International
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