Friday, 23 June 2017

New Loan Requirements For Getting A Mortgage

Written by Posted On Monday, 06 January 2014 14:44

The number of homes purchased with a home loan has been dropping steadily since May, according to RealtyTrac. Instead, cash is king for many reasons. As mortgage rates began creeping up, some homebuyers started opting to purchase with all cash. And that trend may continue as new loan requirements become more strict.

However, for those buyers who do need to purchase a home with a loan, expect to see some changes in the loan requirements as the new year rings in. Here are a just a few of the changes that are going into effect in January 2014. Some of these requirements are already in place by lenders.

The new guidelines are being implemented under The Consumer Financial Protection Bureau's Qualified Mortgage (QM) and are designed to help avoid the borrowing catastrophes that caused the housing crisis. The guidelines are what the lenders use to prove borrowers' ability to repay a loan.

One of the guidelines’ requirements is that borrowers must have a maximum debt-to-income ratio of 43 percent. Debt-to-income ratios have already been in place but the new rules won't allow for any compensating circumstances. That means that not even a significant downpayment or a large cash reserve will be allowed to offset a higher debt ratio.

The incentive to follow these guidelines is huge for the lender. If the mortgages don't meet the QM guidelines, the lender will be required to hold the loan as opposed to selling it to Fannie Mae and Freddie Mac.

The QM requirements potentially may have lower loan limits for conventional conforming loans. The agency that regulates Fannie Mae and Freddie Mac, The Federal Housing Finance Agency, will delay its normal adjustment of loan limits from January 1, 2014 to sometime later in the year. The agency is trying to see what kind of impact the new QM guidelines will have on the housing industry. For most housing markets, the current limits are $417,000 and up to $625,000 in high-cost areas. How these figures will change remains to be seen in 2014.

Origination fees will be limited under the QM requirements, which could make getting a smaller loan more difficult. Origination loan fees will be limited to no more than 3 percent of the loan amount. This could make mortgage lenders less likely to offer smaller loan amounts because they may not always be able to recoup their costs and make a profit.

Self-employed borrowers already face tough standards and they'll likely be even more strict in 2014. In the QM guidelines, all borrowers must prove there is sufficient cash flow to make payments on their loan but self-employed borrowers' incomes typically fluctuate. These borrowers frequently have cash reserves that they rely on to pay bills when their income is off in a particular month. However, even if there is a large amount of money in reserve, it may still be difficult for the self-employed borrower to get a loan approved due to this new "ability-to-repay" QM guideline.

Expect to see changes in the loan approval process as the new year begins. However, some of the specific requirements may not be determined until later in 2014.

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Phoebe Chongchua

Phoebe Chongchua is an award-winning journalist, an author, customer service trainer/speaker, and founder of Setting the Service Standard, a customer service training and consulting program offered by Live Fit Enterprises (LFE) based in San Diego, California. She is the publisher of Live Fit Magazine, an online publication that features information on real estate/finance, physical fitness, travel, and philanthropy. Her company, LFE, specializes in media services including marketing, PR, writing, commercials, corporate videos, customer service training, and keynotes & seminars. Visit her magazine website: www.LiveFitMagazine.com.

Phoebe's articles, feature stories, and columns appear in various publications including The Coast News, Del Mar Village Voice, Rancho Santa Fe Review, and Today's Local News in San Diego, as well as numerous Internet sites. She holds a California real estate license. Phoebe worked for KGTV/10News in San Diego as a Newscaster, Reporter and Community Affairs Specialist for more than a decade. Phoebe's writing is also featured in Donald Trump's book: The Best Real Estate Advice I Ever Received and The Complete Idiot’s Guide to Buying Foreclosures. She is the author of If the Trash Stinks, TAKE IT OUT! 14 Worriless Principles for Your Success.

Contact Phoebe at (858) 259-3646 or phoebe@livefitmagazine.com. Visit PhoebeChongchua.com for more information.

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142 comments

  • Comment Link Douglas Rodgers Monday, 10 April 2017 10:52 posted by Douglas Rodgers

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    The reality is that there are times when you just won't have the money when you need it so badly. In such instances, you have a number of options: ask your friends and family for assistance, sell some of your assets at giveaway prices, or take a loan. If you're like most people, you would definitely prefer taking a loan.

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  • Comment Link Douglas Rodgers Monday, 10 April 2017 10:52 posted by Douglas Rodgers

    Hello Everyone,
    At every point in your life, you'll need money for one thing or the other: starting or expanding your business, paying bills, settling debts, fixing your damaged vehicle, paying your rent, and so on. Unless you're a multi-millionaire, you'll always have one or more expenses waiting to consume every penny you earn.

    The reality is that there are times when you just won't have the money when you need it so badly. In such instances, you have a number of options: ask your friends and family for assistance, sell some of your assets at giveaway prices, or take a loan. If you're like most people, you would definitely prefer taking a loan.

    Here Douglas Rodgers Loan Firm(DOUGLASRODGERSLOANFIRM@LIVE.COM) comes in, Secure a Loan from us today and start up with something rewarding. Our transaction is 100% guaranteed as we also ensure a cordial relationship with our clients. We offer Loans with no credit Checks, No collateral, Easy steps, fast funding and a low interest rate of 2%. Why remain in a financial breakdown? Contact us today via email: Douglasrodgersloanfirm@live.com

  • Comment Link Douglas Rodgers Monday, 10 April 2017 10:52 posted by Douglas Rodgers

    Hello Everyone,
    At every point in your life, you'll need money for one thing or the other: starting or expanding your business, paying bills, settling debts, fixing your damaged vehicle, paying your rent, and so on. Unless you're a multi-millionaire, you'll always have one or more expenses waiting to consume every penny you earn.

    The reality is that there are times when you just won't have the money when you need it so badly. In such instances, you have a number of options: ask your friends and family for assistance, sell some of your assets at giveaway prices, or take a loan. If you're like most people, you would definitely prefer taking a loan.

    Here Douglas Rodgers Loan Firm(DOUGLASRODGERSLOANFIRM@LIVE.COM) comes in, Secure a Loan from us today and start up with something rewarding. Our transaction is 100% guaranteed as we also ensure a cordial relationship with our clients. We offer Loans with no credit Checks, No collateral, Easy steps, fast funding and a low interest rate of 2%. Why remain in a financial breakdown? Contact us today via email: Douglasrodgersloanfirm@live.com

  • Comment Link Douglas Rodgers Monday, 10 April 2017 10:52 posted by Douglas Rodgers

    Hello Everyone,
    At every point in your life, you'll need money for one thing or the other: starting or expanding your business, paying bills, settling debts, fixing your damaged vehicle, paying your rent, and so on. Unless you're a multi-millionaire, you'll always have one or more expenses waiting to consume every penny you earn.

    The reality is that there are times when you just won't have the money when you need it so badly. In such instances, you have a number of options: ask your friends and family for assistance, sell some of your assets at giveaway prices, or take a loan. If you're like most people, you would definitely prefer taking a loan.

    Here Douglas Rodgers Loan Firm(DOUGLASRODGERSLOANFIRM@LIVE.COM) comes in, Secure a Loan from us today and start up with something rewarding. Our transaction is 100% guaranteed as we also ensure a cordial relationship with our clients. We offer Loans with no credit Checks, No collateral, Easy steps, fast funding and a low interest rate of 2%. Why remain in a financial breakdown? Contact us today via email: Douglasrodgersloanfirm@live.com

  • Comment Link Douglas Rodgers Monday, 10 April 2017 10:52 posted by Douglas Rodgers

    Hello Everyone,
    At every point in your life, you'll need money for one thing or the other: starting or expanding your business, paying bills, settling debts, fixing your damaged vehicle, paying your rent, and so on. Unless you're a multi-millionaire, you'll always have one or more expenses waiting to consume every penny you earn.

    The reality is that there are times when you just won't have the money when you need it so badly. In such instances, you have a number of options: ask your friends and family for assistance, sell some of your assets at giveaway prices, or take a loan. If you're like most people, you would definitely prefer taking a loan.

    Here Douglas Rodgers Loan Firm(DOUGLASRODGERSLOANFIRM@LIVE.COM) comes in, Secure a Loan from us today and start up with something rewarding. Our transaction is 100% guaranteed as we also ensure a cordial relationship with our clients. We offer Loans with no credit Checks, No collateral, Easy steps, fast funding and a low interest rate of 2%. Why remain in a financial breakdown? Contact us today via email: Douglasrodgersloanfirm@live.com

  • Comment Link Douglas Rodgers Monday, 10 April 2017 10:52 posted by Douglas Rodgers

    Hello Everyone,
    At every point in your life, you'll need money for one thing or the other: starting or expanding your business, paying bills, settling debts, fixing your damaged vehicle, paying your rent, and so on. Unless you're a multi-millionaire, you'll always have one or more expenses waiting to consume every penny you earn.

    The reality is that there are times when you just won't have the money when you need it so badly. In such instances, you have a number of options: ask your friends and family for assistance, sell some of your assets at giveaway prices, or take a loan. If you're like most people, you would definitely prefer taking a loan.

    Here Douglas Rodgers Loan Firm(DOUGLASRODGERSLOANFIRM@LIVE.COM) comes in, Secure a Loan from us today and start up with something rewarding. Our transaction is 100% guaranteed as we also ensure a cordial relationship with our clients. We offer Loans with no credit Checks, No collateral, Easy steps, fast funding and a low interest rate of 2%. Why remain in a financial breakdown? Contact us today via email: Douglasrodgersloanfirm@live.com

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  • Comment Link Elizabeth Forbes Saturday, 18 July 2015 09:18 posted by Elizabeth Forbes

    Hello, Good day to everybody reading this,

    DO YOU NEED A LOAN???
    TESTIMONY OF HOW I GOT MY LOAN FROM A LEGIT AND TRUSTED LOAN COMPANY

    My name is Elizabeth Forbes from United States. I want to thank Mr John Michaels who helped me to get a loan. For the past three months, I have been searching for a loan to settle my debts, everyone I met scammed and took my money until I finally met Mr John. He was able to give me a loan of $10,000 US Dollars. He can also help you. He has also helped some other colleagues of mine. If you need any financial help, kindly contact his company through email: aceloanservices@hotmail.com I believe he can help you. Contact him to get help just as he helped me. He doesn't know that I am doing this by spreading his goodwill towards me but I feel I should share this with you all to free yourself from scammers, please beware of impersonators and contact the right loan company. below are his words of encouragement to those seeking for a legit and honest private loan lender.


    "Do you need a loan to pay off credits and debts? Do you need finance to set up your own business? Do you need loans to carry out large projects? Do you need college loan? Do you need funding for other various purpose? email: aceloanservices@hotmail.com"

    Thank you for reading and good luck

  • Comment Link Elizabeth Forbes Friday, 17 July 2015 23:58 posted by Elizabeth Forbes

    Hello, Good day to everybody reading this,

    DO YOU NEED A LOAN???
    TESTIMONY OF HOW I GOT MY LOAN FROM A LEGIT AND TRUSTED LOAN COMPANY

    My name is Elizabeth Forbes from United States. I want to thank Mr John Michaels who helped me to get a loan. For the past three months, I have been searching for a loan to settle my debts, everyone I met scammed and took my money until I finally met Mr John. He was able to give me a loan of $10,000 US Dollars. He can also help you. He has also helped some other colleagues of mine. If you need any financial help, kindly contact his company through email: aceloanservices@hotmail.com I believe he can help you. Contact him to get help just as he helped me. He doesn't know that I am doing this by spreading his goodwill towards me but I feel I should share this with you all to free yourself from scammers, please beware of impersonators and contact the right loan company. below are his words of encouragement to those seeking for a legit and honest private loan lender.


    "Do you need a loan to pay off credits and debts? Do you need finance to set up your own business? Do you need loans to carry out large projects? Do you need college loan? Do you need funding for other various purpose? email: aceloanservices@hotmail.com"

    Thank you for reading and good luck

  • Comment Link Elizabeth Forbes Friday, 17 July 2015 23:55 posted by Elizabeth Forbes

    Hello, Good day to everybody reading this,

    DO YOU NEED A LOAN???
    TESTIMONY OF HOW I GOT MY LOAN FROM A LEGIT AND TRUSTED LOAN COMPANY

    My name is Elizabeth Forbes from United States. I want to thank Mr John Michaels who helped me to get a loan. For the past three months, I have been searching for a loan to settle my debts, everyone I met scammed and took my money until I finally met Mr John. He was able to give me a loan of $10,000 US Dollars. He can also help you. He has also helped some other colleagues of mine. If you need any financial help, kindly contact his company through email: aceloanservices@hotmail.com I believe he can help you. Contact him to get help just as he helped me. He doesn't know that I am doing this by spreading his goodwill towards me but I feel I should share this with you all to free yourself from scammers, please beware of impersonators and contact the right loan company. below are his words of encouragement to those seeking for a legit and honest private loan lender.


    "Do you need a loan to pay off credits and debts? Do you need finance to set up your own business? Do you need loans to carry out large projects? Do you need college loan? Do you need funding for other various purpose? email: aceloanservices@hotmail.com"

    Thank you for reading and good luck

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