How Getting a Mortgage Just Got a Lot Easier

fanniefreddieGetting a mortgage in the United States just got a little bit easier. Anyone who has ever shopped for a mortgage knows that one can be tough to acquire without a huge down payment and a spotless credit report, but now, thanks to new lending guidelines put out by Fannie Mae and Freddie Mac, getting a mortgage loan isn’t as hard as it used to be.

According to CNN, borrowers are expected to be able to get loans much more easily, after Fannie Mae and Freddie Mac — mammoth mortgage companies that are backed by the government — have lowered down payment requirements and eased the process of being approved for qualified loans (which are more stable and affordable for borrowers).

Previously, the two companies would force lenders to buy back loans soon after defaults if there was any fraudulent information or mistakes in the paperwork. Additionally, previous policies made it hard for lenders to understand exactly which cases Fannie and Freddie would force lenders to buy back loans in.

The new guidelines may help alleviate an emerging and troubling trend in mortgage applications, which is instances of fraud. According to The New York Times, almost three out of four mortgage applications filed last year contained fraudulent information.

People may be less likely to provide false information on their applications and have a better chance of getting a loan with better terms under the new guidelines. In fact, as of this month, mortgage rates for 30-year loans dropped for the fourth week in a row, which has reduced borrowing costs to their lowest levels in a year and a half.

Thirty-year mortgages are the most common (though 10, 15, or 20 years are also options) and the average rate for them has dropped from 3.97% to 3.89%.

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