New Mortgage Rules Take Effect In 2014

Dated: December 21 2013

Views: 822

Prepare yourself for your home purchase The Consumer Financial Protection Bureau is issuing a final rule to implement laws requiring mortgage lenders to consider consumers’ ability to repay home loans before extending them credit. The rule willtake effect on January 10, 2014. The final rule contains Ability to Repay Determination.

Under this rule there are certain minimum requirements for creditors making ability-to-repay determinations, but does not dictate that they follow particular underwriting models. At a minimum there are eight underwriting models that must be followed: (1) current or reasonably expected income or assets; (2) current employment status; (3) the monthly payment on the loan being secured; this will include PITI and HOA dues if applicable even if you are waiving your escrow account; (4) the monthly payment on any simultaneous loan; (5) the monthly payment for any mortgage related obligations; (6) Current debt obligations, alimony, and child support; (7) the monthly debt to income ratio or residual income; and (8) credit history.

Conventional conforming loans will have a reduction in Debt to income ratios from 45% to 43%.Depending on your income this 2%reduction in DTI could mean a difference of $100, $200 or  $300 per month in payment. $200 per month ona mortgage could potentially mean qualifying for a home that is $30,000-$40,000less than what you would qualify for now. But look on the bright side. You can also reduce your other debt by $200-$300 and achieve the same outcome and still get the home of your dreams. 

Here is what you will definitely need when applying for a mortgage:(1) Most recent 2 years tax returns.Make sure that you have filed for the last 2 years if not you will not get amortgage.(2) Most recent 2 years W-2’s(3) Most recent 1 month of pay stubs(4) Most recent 60 days asset statements. (Checking, Savings, any stock, 401K, IRA ) the more the better tostrengthen your file. Do not be afraid to show what you have. 

Ifthere is any additional items needed your mortgage professional will let youknow.Beprepared. With the new changes it is moreimportant than ever to contact a mortgage professional to make sure you meetall of these guidelines prior to looking for a home. If you want to be grandfatheredin prior to these changes call me to get pre-approved it is free. There isstill time to find a home and get closed before January 10, 2014, but do nothesitate to contact us @ 713-480-0889 or go to  http://www.coolhoustonhomes.comRussell Banki Owner/Realtor (CNE, ALHS) of Best Priced Properties 713-480-0889 Zing Ventures LLC

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Russell Banki REALTOR® ALHS CNE

Russell Banki ALHS, CNE REALTOR Hite Properties Cell: 713-480-0889 Best Priced Properties Team Montgomery & Harris County TX Real Estate Experts Clients First!Treating the relationship with f....

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