Consumer Financial Protection Bureau –
New Mortgage Rules 2015
New rules are going into effect this August 1st, and enacted to make mortgage shopping easier but also to better protect consumers from expensive surprises.
What Realtors and Buyers Need to Know
Buyers should expect more stringent underwriting requirements under the Ability to Repay / Qualifying Mortgage Rule. Realtors will have to be ever more on-the-ball coaching clients on their credit and debt-to-income ratios. Lending policies have relaxed over the last year, but this "tightening up" means working a bit harder to get qualified.
A couple of lovely things that accompany these changes are much better transparency, easier-to-understand document formats. Mills, fees and points will be clearer for the consumer and though underwriting is stricter, in many cases, the new rules ban pre-payment penalties.
Bookmark this post if you like for future reference when August draws nearer.
The New Loan Estimate & Closing Disclosure Forms
As mortgage and finance is at the heart of the lion's share of transactions, Realtors will need to familiarize themselves with and be able to walk clients through the new forms. The new rules will affect how you complete transactions with regard to timing and the introduction of a mandatory three-day notification for the new Loan Estimate form and Closing Disclosure form.
The changes are part of the Know Before You Owe project at the CFPB, here you can compare the forms and learn more about it.
Buyers, understand mortgage fraud happens all the time and innocent people get caught up in it, devastating lives. If you're reading this, you've reached a point where you're considering pursuing a home purchase with a mortgage. Protect yourself from mortgage fraud.
You may also benefit from more Mortgage and Finance articles, Buyer's topics, or visit our First Time Home Buying Resource Tool Box.