Saturday, November 23, 2013

Do not wait to get a mortgage; tougher guidelines ahead

Beginning January 2014 it will be tougher to get a mortgage as Qualified Mortgage (QM) rules will be implemented.  This means lenders will be looking closer at a borrowers ability to repay the loan and will come with stricter underwriting guidelines and stricter credit requirements.  There will be a reduction in loans with riskier features, restriction to borrowers that have debt to loan ratio of higher than 43%, and origination and affiliated fees cannot exceed 3% of the loan.  This will have an impact to low to moderate income borrowers, first time home buyers and self employed buyers.  Buyers Broker of Florida recommends to get prequalified with good mortgage lender before shopping for a home.