New Mortgage Predictions for 2014

The real estate bubble of the past has caused immense changes in the mortgage lending business for 2014. Despite some relaxing in recent years, government regulations for the new year are stricter and more proactive. 

Changes in home lending will impact new home buyers. Under new qualified mortgage, or QM rules lenders must prove the loan applicant’s ability to repay. New guidelines going into effect January 10, 2014 will apply to all home loan lenders. 

The new lending rules have more stringent standards in terms of the borrower’s income. They will need to have a debt- to-income ratio of 43 percent. Compensation circumstances such as a sizable bank account and other assets will no longer apply. 

New standards also limit fees to three percent of the lending amount for originating a loan. Lower loan limits for a Freddie Mac or Fannie Mae loan were delayed by the Federal Housing Finance Agency until all new QM rules went into effect. This was announced in October of 2013.

New bankruptcy rules may cause prospective borrowers’ to have to wait longer to apply for home loans. The type of loan will determine the length of the wait. 

For more information about current market trends in the Contra Costa County Californa area, contact Cary Amo Realty in Lafayette today.










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