Let’s Explore the New Mortgage Underwriting Technology

Recently, Fannie Mae launched a brand-new feature in its automated mortgage underwriting system. The goal was to incorporate their customers’ rent payments in the mortgage credit review process. Let’s explore this new underwriting technology and what it means for mortgage loans in the future.

 

Single-Family Lenders

Beginning in September of this year, Fannie Mae’s Desktop Underwriter (DU) will automatically allow single-family lenders to recognize recurring rent payments in applications. With permission from the applicant, this can deliver a more inclusive credit review. Imagine how this could change the process for hopeful first-time home buyers!

Limited Credit History No Longer a Determining Factor

Qualified renters with limited credit history but a solid rent payment background could be approved for home loans they couldn’t have qualified for before this change. Not only does this promote safe and sound lending, but it also makes home buying accessible for those that have always made paying for housing a priority. What a positive change for eligibility nationwide!

The Details

Only consistent rent payments can improve eligibility. However, this doesn’t mean a missed or late rent payment will negatively affect an applicant’s chances at loan approval. It will simply not be included in the approval criteria. Rent payments will appear in the payment history of the borrower’s bank account data and will easily be found by the new underwriting technology. This could completely change the game for first-time homebuyers and buyers who have a lapse in their borrowing history.

Making Home Buying More Accessible

According to Fannie Mae, this new mortgage underwriting technology will make a big difference in who can qualify for home loans. Lenders factoring in consistent and reliable rent payment history are opening homeownership to those who may have otherwise been turned down. In a recent sample of first-time homebuyer mortgage applicants who did not receive a favorable recommendation through DU, 17% could have been approved if their rental history was considered. Wow!

Why You Should Never Skip the Title Process

The title process is arguably the most overlooked part of a real estate transaction. Read on to learn more about the title process and how each step allows title companies to ensure that the transaction can be completed.

 

What is a title?

A title is a piece of documentation that says who legally owns the property described in the deed. The title is a very important piece of the overall real estate transaction. While a deed is the official written document stating a person’s legal ownership of the property, the title refers to the concept of ownership rights.

The Search

A title company will begin a series of multiple searches, including but not limited to property searches, owner searches and tax searches.

Review

The title company will painstakingly review the results of the searches to provide the buyer with the most current and accurate information. Most buyers want to have all of the updated information regarding every aspect of the property they’d like to purchase.

Handling Issues

If issues preventing the transfer of a title are found with a property, it does not necessarily mean that the real estate transaction cannot be completed. First, all parties involved will be informed when impediments are found.  Then, the title company will provide options on how to proceed. Experienced title companies like Innovation Title, Inc., have previously come across nearly every possible scenario and can prescribe the next steps. This insight has proven to be an extremely valuable service to many people we have worked with.

 

For any questions on the title process, we can help!

The Difference Between a Deed and a Title

For anyone involved in a real estate transaction, it’s essential to understand the difference between a deed and a title. Both documents are incredibly important to the buying and selling process, but for very different reasons. Read on to learn more.

 

What is a deed?

Both deeds and titles are legal documents. However, there are some key differences. A deed is a legal document that changes hands when the property is transferred from one owner to the next. It will thoroughly detail the property lines and any other important details about the property. At the closing, the signing of the deed is witnessed before it gets to the buyer. Both signatures are necessary to make the document legally binding.

What is a title?

A title is a piece of documentation that says who legally owns the property described in the deed. The title is a critical piece of the overall real estate transaction. So how does a title vary from the deed? Well, the most significant difference is the physical component. While the deed is the official written document stating a person’s legal ownership of the property, the title refers to the concept of ownership rights. While a seller may possess the deed paperwork, that doesn’t necessarily mean they have the right to own the deed, and ultimately the property.

Verifying a Title

For a title to be “clear”, a title company is hired to do the vetting and perform a title search. This process searches the history of the title and makes sure there are no liens, outstanding mortgages, judgments, or other issues that may jeopardize the sale of the property. The goal is to ensure the buyer will own the property free and clear. The title company will also guarantee the verification through title insurance that the buyer can purchase. Title insurance protects both the lender and the owner in case a claim to the property surfaces.

 

Have further questions about the difference between a title and a deed? We can help! Contact us today.

A Title Company’s Role in a Real Estate Transaction

Buying a home or property involves a lot of players. One of the most important and often understated players in the process is the title company. The primary role of a title company in a real estate transaction is to verify that the title of the property is legitimately given to the buyer. In other words, the title company makes sure that the seller has full rights to sell the property. Read on to learn more.

The Difference Between a Title and a Deed

If you’re new to the home buying process, you may not realize that there is a difference between a title and a deed. There is indeed a difference, and it’s essential to understand what that is. A deed is a legal document that changes hands when a property is transferred from one owner to the next. When you close on a property, the deed is signed and witnessed before it gets to you. The deed will include a written description of the property. On the other hand, a title is a piece of documentation that says you own the property described in the deed. The title is a crucial piece of the overall real estate transaction.

The Verification Process

The main job of a title company is to verify the title. To do this, they perform a title search. This process searches the history of the title and makes sure there are no liens, outstanding mortgages, judgments, or other issues that may jeopardize the sale of the property. The goal is to make sure you will be able to own the property free and clear. Once the verification process is complete, the title company will insure the verification. Title insurance protects both the lender and the owner if someone eventually makes a claim to the property.

For all your title needs, contact Innovation Title Inc!