As 2018 begins there are a number of significant changes in the mortgage world that are noteworthy.
MAXIMUM MORTGAGE AMOUNTS
The maximum loan amount has been increased for Conventional mortgages, FHA mortgage, and VA mortgages. This is beneficial as prices have increased in the Metro Denver area. This will ensure that these mortgage programs continue to be widely available and not force borrowers into Jumbo mortgages, which are generally harder to qualify for.
The maximum mortgage amounts in Colorado for Conventional mortgages are as follows:
- $529,000 in Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park counties.
- $578,450 in Boulder County;
- $625,500 in Lake, Routt, San Miguel and Summit counties;
- $636,150 in Eagle County;
- $679,650 in Garfield and Pitkin County; and
- $453,100 in every other county in Colorado.
The maximum FHA mortgage amounts in 2018 are
- $529,000 in Adams, Arapahoe, Broomfield, Clear Creek, Denver, Douglas, Elbert, Gilpin, Jefferson, and Park counties
- $578,450 in Boulder County
- $634,800 in Routt County
- $679,650 in Eagle, Garfield, Pitkin, San Miguel and Summit
- In other counties the limits range from $294,515 to $425,000
The maximum VA mortgage amount in 2018 is that same as for conventional mortgages. However, with a sufficient down payment it is possible to exceed the VA maximum mortgage amount.
There have been several changes to the way student loans are treated. One of the biggest changes is to allow income based payments to be used in underwriting even if they are nominal. Formerly it was required that the payments used in underwriting had to equal 1% of the loan balance. This is a positive change for borrowers.
DEBTS PAID BY A THIRD PARTY
Previously if the monthly payment on a debt was paid by someone other than the borrower it was still required that the payment be counted against the borrower unless it was for a mortgage or a car loan. This rule has been changed so that beginning in 2018 if documentation is provided to show that a person other than the borrower has been making payments for the previous 12 months then the payment does not have to be counted against the borrower. This is a positive change as well.
AS 2017 progressed appraisal waivers became more common on certain types of transactions. When granted these waivers save the borrower the cost of the appraisal ($500 to $700) in Colorado and the save time. The processing time for a mortgage is shorter when an appraisal waiver has been granted.
The situations where appraisal waivers are more common are situations where the borrower has a down payment of 20% or more on a purchase or the borrower is doing a rate and term refinance (no cash back) and they have a current conventional mortgage. The other factor that is hard to quantify is how much date Freddie Mac and Fannie Mae have on the property being financed.
The determination of whether a property is eligible for an appraisal waiver is determined at the beginning of the underwriting process.