new mortgage rules

Back in January 2014 the Qualified Mortgage Rule (QM) was put into place and it’s phase one of two rules from the Dodd-Frank Wall Street Reform and Consumer Protection Act that’s expected to strengthen the housing market and protect consumers.

How Will It Protect Consumers?

The Qualified Mortgage Rule will protect more consumers across the United States by making underwriting standards stronger although some economists, Realtor’s and mortgage brokers have argued that it will ultimately increase costs that consumers will have to pay and make it harder for them to get mortgage loans for homes

Insight into the New QM Rule

Thanks to a recent study by the National Association of Realtor’s (NAR) we know more about the impact that the Qualified Mortgage Rule will have on businesses and consumers across the United States.

Lenders across the United States were asked the question “would you impose a buffer in advance of the 43% debt to income requirement? If so, what would it be?” and the answers were interesting:

  • 68.4% of respondents said they would not support a buffer in advance of that restriction which would enable them to protect themselves.
  • 15.8% said they would support a “modest buffer” at 42.5%.
  • 10.6% of those surveyed said they would support buffers of at least 41% to 42%.

Looking Into the Future

Thanks to the new Qualified Income Rule all Consumers and even Realtor’s should expect more changes in the Real Estate industry because, consumers will have to more fully document their employment and income from all sources and so much more.

For those consumers who have high debt to income ratios it’s likely that Freddie Mac and Fannie Mae will work with them, but unless those consumers work hard to pay down their debts, they can expect to be offered mortgage loans with higher fees and higher interest rates because, they will fall into the non-QM category.

What does it all mean for you, the consumer? It’s still possible for you to get into a home regardless if you have less than perfect credit or a high debt to income ratio.

You need a local Realtor who has the right connections to help you find the right mortgage broker and get into the home of your dreams.

For a free Real Estate consultation call me today at (541) 383-1426 or click here to contact me through my website.