Ever since the real estate bubble burst, securing financing for the purchase of real estate has been challenging. Tighter loan restrictions and fewer, more strict lending programs have stymied many real estate purchasers. The Qualified Mortgage Rule went into effect on January 2014 to address these issues but how are homebuyers impacted by this new rule?
The New Qualified Mortgage Rule is a new program designed to make sure borrowers can repay their loans. It is also known as the “ability to re-pay loan” rule. As defined by the Consumer Financial Protection Bureau, the program calculates the loan applied for at a 30 year term, with points and fees paid by borrower. Whatever this number equals, it can not exceed more than 3 percent of the total loan amount. Lenders are required to provide proof that the borrower has the ability to repay the loan and must confirm the debt to income ratio, which must equal no more than 43 percent.
While lenders had already tightened their restrictions significantly after the mortgage debacle. this equates to additional documents from borrowers to cover the lenders and their liability. Self-employed borrowers will have a hard time getting a mortgage if they do not have a long history of consistent income. It also impacts buyers looking for jumbo loans, over $417,000.00, making it more difficult to qualify for such loans.
The bottom line is to start with a real estate attorney and the right banking professional. As a team, we can find the right loan for you and make sure that banks are working within required guidelines and restrictions.
At my firm, I am both an accountant, lawyer and realtor. I work closely with each and every client that is looking to take out a new loan, as well as our banking partners, to make sure they have their credit in order as well as their finances in order to find the best program for them.
Call us today for a free consultation.
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JACQUELINE A. SALICNES, ESQ.706 S. DIXIE HIGHWAYSECOND FLOORCORAL GABLES, FL 33146TEL: 305.669.5280EMAIL: J.SALCINES@SALCINESLAW.COM
https://jaspa1.wpengine.com/wp-content/uploads/2018/07/logo_final_dark1.png00jaspa1https://jaspa1.wpengine.com/wp-content/uploads/2018/07/logo_final_dark1.pngjaspa12014-05-08 20:02:132022-12-20 13:59:42QUALIFIED MORTGAGE RULE WENT INTO EFFECT JANUARY 2014.
