photo credit: Fotolia.com
By now, you may have heard about new rules going into effect Jan. 10, 2014, tightening lending requirements for homeowners. The goal of the rules, put into place by the Consumer Financial Protection Bureau, is to ensure all borrowers applying for loans are capable of keeping up with loan payments, which in turn enables banks to continue lending money with confidence.
For context, however: The new regulations are similar to rules that already have been in place for a couple of years now. This won't be a dealbreaker for the vast majority of homeowners today. For example, one change is that a borrower's debt-to-income ratio must drop from a maximum 45% to 43%. Meaning, the total amount of your monthly debt payments, whether due to mortgages, credit cards, or student loans, cannot be greater than 43% of your monthly income.
If these changes mean you have to wait a little longer before refinancing or making a new home purchase, don't fret - the last thing you want is to get stuck with a mortgage you can't afford. The goal of tightening lending standards is ultimately to prevent that from happening.
Check here for tips to consider in 2014 and stay tuned to the Vertex blog for more information on coming changes.
No comments:
Post a Comment