Changes To Mortgages Happening Now But What Can Home Buyers Expect?
There’s no denying that the mortgage market has changed over the years following the collapse of the Real Estate market as the Federal Government has worked harder at protecting consumers and as of January 10th 2014 new mortgage rules are expected to be enacted that will change what the Federal Government calls a qualified mortgage.
What to Expect
For a mortgage to be considered a “Qualified Mortgage” it must have the following features:
- Low costs that are paid up-front, especially for mortgage loans that are over $100,000, the fees for these mortgages cannot be greater than three percent of the total mortgage loan.
- Qualified mortgages must offer safer mortgage features and not offer features that can hurt the home buyer like: negative amortization or interest only payments.
- Mortgages that can be considered to be qualified must not exceed 30 years in length and they must offer set payments instead of “balloon payments” that sometimes can occur in mortgages.
With new mortgage rules and regulations there are also tougher guidelines for consumers to meet when applying for mortgage loans compared to pre 2007 when most lenders didn’t verify a consumer’s income or ability to pay.
These days’ consumers must be able to prove that they have the ability to pay their mortgage loan and lenders will specifically want to verify that a consumer’s debt isn’t greater than 43 percent of their monthly pre-tax income.
Difficult but Not Impossible
Although many lenders will be following the new mortgage rules there will still be some smaller credit unions and banks who will approve mortgage loans but the top qualifying factor will continue to be the borrower’s ability to pay back their mortgage and insuring that they have a debt-to-income ratio that doesn’t exceed 43 percent.
To learn more about the latest mortgage rules, or to view Bend Oregon homes for sale, contact me today by calling (541) 383-1426.