In December 2015, a new bill was introduced in congress that might significantly impact home buyer’s ability to get a mortgage. The goal of this new bill is to adjust the way credit scores are viewed by lenders, which might make it easier for first time home buyers to get the financing they need to buy a home. This article discusses Credit Score Competition Act: How Could This Bill Help You Get a Mortgage?
This proposed bill is called the Credit Score Competition Act, also known as H.R. 4211. At this point, it is still in the early stages of the legislative process, which means that it may or may not be passed. Even though it isn’t law (yet), it is interesting for potential home buyers to learn about because of the potential impact it could have on the mortgage and real estate industry.
New Credit Score System
The goal of the Credit Score Competition Act is to make it easier for more first-time home buyers to get funding through a mortgage. As a result, it is possible for new home buyers to be competitive in the Atlanta real estate market and other areas around the United States.
The details of this potential bill will require mortgage institutions that are backed by the government to not only use credit scores under certain conditions during the underwriting process. This process would be made available to the public, so that home buyers will understand more about how their credit score will impact the possibility of securing financing for their home purchase. As a result, other systems could be used instead of only relying on the credit score for qualification.
Low FICO Credit Score? No Problem!
One limiting factor for a new home buyer is if they have a low FICO credit score, which often makes it difficult to secure the mortgage financing that is needed. If someone is a good candidate to buy a home but they have a low credit score, then it is possible that the Credit Score Competition Act will help them get a mortgage when they previously weren’t able to qualify.
At this point, mortgage institutions that are backed by the government, such as Fannie Mae and Freddie Mac, can only consider FICO credit scores during the mortgage approval process. As a result, there are a number of potential home buyers that are missing out on financing because of a low credit score. By introducing this new legislation, it is creating the potential for more competition in the industry, allowing lenders to innovate to make mortgage financing available to more people.
Do you want to buy a home, but you aren’t sure if you will qualify for the financing that you need? The best thing that you can do is talk with a mortgage professional to learn more about your options. Contact us at Duffy Realty of Atlanta, and we can connect you with some of the lenders that we trust. We will help you find the home of your dreams, and make sure that it fits within your budget. Call us today: (678) 318-1700. We hope that you enjoyed our article on Credit Score Competition Act: How Could This Bill Help You Get a Mortgage?