Finance Changes Coming in 2014

Finance Changes Coming in 2014

From everything I am reading, it seems that if anyone is “on the fence” about buying a home; it MIGHT be better to do it sooner  rather than later. (if it involves the buyer obtaining a new loan) More specifically, prior to January 10th, 2014.

Here are a few potential reasons:

The Consumer Financial Protection Bureau  (CFPB) is tightening the requirements for mortgages effective Jan 2014. The new lending rules will limit people from taking out a mortgage or refinancing an existing one that puts their overall household borrowing (including water heater repair, outdoor maintenance etc.) at more than 43 percent of their income, also known as Debt to Income Ratio (DTI). Some experts from Market Review are even forecasting that the new maximum Debt to Income Ratio could be  as low as 38%

To calculate your DTI ratio as a percentage (which is how lenders typically consider DTI ratios), divide your monthly debt repayments by your gross monthly income (before taxes), and multiply that number by 100. 

That new debt cap also includes a wide swath of common forms of debt that count toward the total, including student loans, most fees and points related a home purchase, property taxes, alimony and child support payments.  It also tightens rules on documentation, and lenders who improvise to give customers easier terms will be open to consumer lawsuits if the loans go bad. And if you get in theft situation it will be hard to prove that its really theft without Identity Theft Delray Beach experts.

Because of these pending finance changes, some private research firms say that from 10 percent to 50 percent of borrowers who now qualify for a loan today, will have to get help seeing as they may not qualify for that loan in 2014.

The number I keep hearing locally, from a few Colorado Springs REALTORS® and lenders, is  30%…  Thirty percent of the people who qualify for a mortgage today (Oct. 2013) may not qualify for a loan beginning sometime in January 2014.

The above information is what has some lenders and REALTORS® thinking that it might be better to buy or sell now, rather than after January 10th, 2014.

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