getting-a-mortgage

The New Year is officially here, and with it comes a list of resolutions, goals and opportunities. If one of your goals is to buy a house this year, there are a few important things you should be aware of as you seek financing for your new home.

While the subject of home buying trends is discussed every year, many lenders focus on discussing topics such as interest rates, home prices, changes in inventory and the need to find the right mortgage company. This year, there are also some important regulatory changes consumers buying a home should be aware of.

Here’s what you need to know about getting a mortgage in 2014:

Dodd-Frank
In 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in an effort to reform financial practices that contributed to the financial crisis of 2008. In December, the newest round of Dodd-Frank regulations went into effect, establishing new lending guidelines all mortgage lending institutions must follow.

Of these new regulations, the Ability-to-Repay and Qualified Mortgage (QM) rules have received the most attention. Ultimately, these new rules allow the Consumer Finance Protection Bureau (CFPB) to protect homebuyers from predatory lending practices and ensure they are provided with ethical and affordable financing options.

Prior to these new regulations, lenders had the ability to set their own underwriting guidelines, allowing for irresponsible lending practices to occur. Although there were guidelines set by the Federal Housing Administration (FHA), Veteran Affairs (VA), Fannie Mae and Freddie Mac, some companies adjusted their lending parameters to accommodate otherwise unfinanacable homebuyers—ultimately leading to high-risk loans borrowers could not afford to repay.

What this means for you
Now that all mortgages are required to be “qualified,” they must fit within government-selected guidelines. This ensures that consumers are provided with a loan program they can reasonably afford. If the mortgage does not fit these guidelines, and is not considered “qualified,” the borrower has the power to litigate the lender for writing an inappropriate mortgage.

If you are considering buying a house in 2014, it is more important than ever to find the right lender for your needs. The normal seasonal inventory issues and fluctuations in interest rates will always be there, but finding a lender who can navigate the new Dodd-Frank regulatory changes, while keeping your rate competitive, is key.

As a Michigan mortgage lender that has been adhering to government lending guidelines for years, we pride ourselves on the reputation of professionalism, integrity and quality service we’ve earned. Accustomed to following government-suggested lending guidelines, our state-wide team of experienced loan officers have been trained in the new Dodd-Frank regulations and look forward to helping you in your journey to homeownership.

If you would like to know more about the Dodd-Frank regulations and how they affect your ability to obtain a mortgage, please leave a comment below, or call me at 248.658.2643, and I would be happy answer your questions. 

medelstein

Marc Edelstein has more than 15 years experience originating home loans. He has built his business using three core values: honesty, integrity and exceptional customer service. His ultimate goal is to educate consumers and communicate extremely well with all parties on each and every loan. When he’s not helping people achieve the American dream, he spends his time golfing or at the lake with his wife and two children.

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