How Your Rental History Might Finally Help You Qualify For a Mortgage
Even if you previously had a mortgage application rejected, you may want to try again. Fannie Mae recently announced changes to their underwriting process. The new calculations will include your history of rental payments. That’s great news for anyone that’s been a reliable tenant for years while saving for a house. This new process should make it somewhat easier for renters to qualify for a mortgage. Indeed, Fannie Mae calculates that roughly 17% of previously rejected borrowers would now be approved. That’s based solely on adding their rental history to the equation.
Why Rent History Matters
If you’re a Millennial, there’s a good chance you’re stuck renting a place to live while you watch house prices continue to soar. It can certainly be discouraging. You, like millions of others your age, are probably wondering if you’ll ever be able to buy a house. You probably also end up frustrated by the math of everything. Perhaps you’ve seen this viral Twitter meme:
The bank says I can’t afford a $950 mortgage so I pay $1400 a month in rent instead.
— Kat ???? (@KatMeanJean) February 15, 2021