New Mortgage Lending Rules in 2014 Protect Borrowers

Purchasing a house in Plantation, FL can be a complicated experience, especially if you’re a first-time homebuyer. It’s important to stay informed on the latest trends in the housing market. The calendar year isn’t the only thing that has changed.  New mortgage rules issued by the Consumer Financial Protection Bureau have already taken effect. Many people are worried these new standards will make home shopping more challenging. But that may not necessarily be the case. The goal is to make sure the borrower can repay their mortgages.

The housing recession sometimes brought out the worst in people. Many companies abused the lending system and often used predatory and risky home lending practices. Fortunately, most of these activities have been eradicated from the housing market.  While the new rules issued by CFPB have recently taken effect, most mortgage lenders have been implementing them for nearly a year.  In fact, it’s estimated that about 90 percent of mortgages written as far back as 2012 complied with these rules.

So what should homebuyers expect? Buying a house is a meticulous process. It’s important to be organized and keep good documentation of your financial records. This will be even more important in 2014. If you’re planning to secure a home loan, you will need to provide the following information.

  • Borrowers need to list all their assets and sources of income used to repay a loan.
  • You must verify your employment
  • You must determine what kind of monthly mortgage payment plan is affordable
  • You must provide information on other monthly payment loans you are using for the same property.
  • Determine the monthly payments used for property taxes, home insurance, homeowner’s association fees and other costs related to owning the property.
  • Lender will need to know about your debts, including child support and alimony.
  • You will need to prove a favorable debt-to-income ratio.
  • Monitor and maintain good credit.

If you want to put yourself in the best position to secure a mortgage loan, it’s essential to provide these documents. There is no substitute for being properly prepared.

Once a lender follows the proper procedures of underwriting and writes the loan, it is officially considered a qualified mortgage. This means the lender and borrower are will receive some legal protections in case the borrower is unable to repay the loan.  It’s possible for lenders to write a loan which isn’t a qualified mortgage. But it would not be in their best interest because they will lose legal protection if the borrower is unable to repay.  The new rules prevent lenders from enrolling borrowers into a mortgage loan with excessive up-front costs, which they are most likely unable to repay.

Securing your dream home loan in Plantation is always attainable as long as you stay organized and keep up to date with the latest trends of the housing market. The mortgage professionals at Ace Mortgage Loan Corporation can help guide you through the home lending process to help secure the best mortgage loan for you.  Visit their office in Coral Springs or call (954) 777-4774.

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