Florida Mortgage : Learning Center

We have been utilizing Fannie Mae’s Desktop automated underwriting system since it’s arrival in the mid 90’s.  Prior to this automated system of evaluating risk for Florida home mortgage loans, debt ratios (your monthly debts including your mortgage payments, divided by your gross monthly income) were capped at 36%. 

Boy, did things change in the automated world of mortgage risk analysis.

With great credit scores and verifiable liquid reserves, Desktop underwriting approval recommendations allowed Florida homeowners or home buyers to have debt ratios as high as 60%!  This was based on Gross income; not the Net income you get to deposit in your bank account on Friday’s. 

Recently, we have seen a shift in the amount of debt Fannie Mae will allow using their Desktop system.  In fact, a debt ratio of 45% seems to be the new reasonable cap on allowable mortgage and consumer debt.  Keep in mind, this ratio can increase slightly as long as the amount of mortgage borrowed or your loan-to-value is reduced.  The less you owe on your Florida home, the greater the allowance on mortgage debt, from Fannie Mae’s point of view.

Florida mortgages with respect to Fannie Mae underwriting has tightened a bit and we expect more tightening before things begin to settle down.  Of course if you have any questions regarding the availability of mortgage credit in this ever changing financing arena; call your Florida Mortgage Professional for advice.

Stephen Thaggard

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