Confused about the new federal “ability to repay” and “qualified mortgage” regulations that took effect Jan. 10, 2014? Don’t worry, you’re not alone. In fact, mortgage, banking and credit union leaders all agreed during recent hearings on Capitol Hill that the regulations will make obtaining credit a lot tougher, not easier. But, the LA Times has come to the rescue. A recent story I read shares some ideas on how home buyers can get around the new regulations, especially those who find it difficult to meet the new standards.
The new regulations were designed to ban or severely restrict most of the bad practices that caused our country’s mortgage troubles during the last few years. A good thing. However, they are also creating requirements and penalties that make lenders nervous about approving anyone’s loan. By taking the time to do a little bit of planning ahead and following the strategies explained in the article, consumers may improve their chances to get a mortgage this year. Here’s what they suggest:
•Debt ratios. Even though your total debt-to-income ratio should not be greater than 43%, there is latitude if you search for it.
- The Federal Housing Administration also offers flexibility when it comes to debt-to-income ratios.
- Applicants who are veterans can find flexibility by checking out VA loans.
•Down-payment assistance. There are literally hundreds of bond-funded, low-cost mortgage assistance programs run by state and local housing finance agencies.
- Check http://www.downpaymentresource.com for a listing of around 1,600 such programs across the country.
At the end of the day, just by knowing you have options will help you get the right loan. So will an experienced loan officer who works with a variety of funding sources. I can point you in the right direction when it comes to finding the right loan officer and, of course, when it comes to buying or selling your home in Montecito. I look forward to discussing your needs with you. Just call me at 805-886-9378.