Borrowers seeking home loans should know that many mortgage lenders will now be scrutinizing more detailed credit data. This is because Fannie Mae has revised its risk-assessment software to include an expanded version of a borrower’s credit report which will include more information about how a borrower has paid his or her credit card bills over the past two years. This change took effect on September 24, 2016. According to a product manager in Fannie Mae’s single-family homes division, this revision will help lenders predict whether borrowers are likely to repay their mortgage. In these new reports, lenders will be able to see the actual amount a potential borrower paid each month, over a 24-month period. Additionally, the lender can see if the borrower paid off a card balance in full each month, if they made just a minimum required payment and if they paid more than the minimum. Borrowers who pay in full or pay more than the minimum payment will be deemed as less risky. In addition to this new data, lenders will also be evaluating borrowers with other criteria, such as the borrower’s income/overall debt burden and the size of the loan relative to the property’s value.
