What the New Mortgage Rules Mean for Borrowers

Looking to refinance your home, or build a new one in 2015? If so, you will be one of the first consumers to apply for a mortgage under the new rules established by the Consumer Financial Protection Bureau (CFPB). At Village Communities, we work hard to build the best condos in Columbus, Ohio. We also work hard to help our clients achieve their dream of owning a home. The new rules established by the CFPB will go a long way in helping to make sure consumers are protected from unsustainable loans and will keep lenders from approving loans for unqualified borrowers.

The “Qualified Mortgages” or QM regulations change the availability of some loan programs and limit the fees that lenders can charge consumers. We outline some of the changes here:

•Certain loan programs, such as no-documentation loans, 40-year loans, interest-only loans, loans with balloon payments, etc. are not eligible for QM status because they are dangerous to consumers. As a result, many lenders have stopped offering these types of programs.

•Lenders have increased the level of documentation required of all borrowers to comply with regulations and underwriting standards.

•Lender fees are limited to 3 percent on loans above $100,000

•Consumer debt-to-income ratio must be 43 percent or lower. Lenders may require consumers to reduce the amount of the loan, or pay off other debt if their ratio is higher than 43 percent.

•Lenders can offer QM and non-QM loans, but the advantage of a QM loan is that it can be purchased or guaranteed by Fannie Mae and Freddie Mac.

We hope this helps you understand the changes around the new mortgage rules. Want to check out the finest townhomes in Columbus, Ohio? Stop by and visit one of our communities, and our sales staff can help answer your questions.  You’ll see why Village Communities builds the best Columbus, Ohio condominiums!

Compiled from the following resource: http://www.realtor.com/news/what-the-new-mortgage-rules-mean-for-borrowe...