Market Update: Obtaining a Mortgage to Get More Difficult

posted on November 13th, 2013 | filed under: Uncategorized

New mortgage rules are going into effect January 10.Trends At A Glance - Nov

The new rules were written by the Consumer Financial Protection Bureau to protect homebuyers from risky mortgages like the ones that led so many homeowners into foreclosure in recent years. The rules also protect investors from buying shoddy mortgage-backed investments.

The Ability to Repay Rule requires lenders to evaluate your financial fitness to repay a loan, even if it’s an adjustable-rate mortgage with low payments compared with a fixed-rate loan.

Now, lenders will have to evaluate your ability to pay back a mortgage based on these points:

  • Your income or assets.
  • Your employment.
  • The monthly payment on the mortgage you want.
  • Monthly payments on your other debts.
  • Monthly payments on other mortgage-related costs (home and mortgage insurance and property taxes, for example).
  • Any commitments for child support or alimony.
  • What’s left every month after you’ve paid your debts. In most cases, your total monthly debt payments can’t exceed 43% of your monthly gross income.
  • Your credit history.

See the Full Report

posted by Jeff DeChamplain

Leave a Reply

Jeff DeChamplain