วันเสาร์ที่ 25 สิงหาคม พ.ศ. 2561

Is The Time Right?

If you've been wondering whether or not it's a good time to refinance or you're considering buying another property then it might be time to get financing now before year end. And no, it's not due ขายบ้าน to any tax considerations, although there are some, it's because the new year might bring along with it some tougher lending rules.

Beginning next year, the federal government will issue new rules defining a "qualified mortgage," or QM. A mortgage loan will be considered a qualified mortgage if it fits a new set of rules. These rules will apply only to conventional mortgages, leaving FHA and VA loans alone.

A qualified mortgage will have a certain set of characteristics to it that will allow a lender to sell the loan to Fannie Mae and Freddie Mac. The new rules aren't set in stone yet there are some basic guidelines these loans will have.

One requirement may be a hard and fast debt ratio. A debt ratio is a number arrived at by dividing a borrowers monthly debt payments by their gross monthly income. Initial indications are that this debt ratio limit is 43. And while lenders today can issue mortgage loans with ratios above 43 they do so because there are other positive aspects about the loan such as a solid employment history or lots of money in the bank.

What happens if a lender issues a loan without the 43 ratio? Then the loan isn't qualified for sale. That means the lender would either have to raise the rate or, more likely, decline the loan. Loans that are issued with following the qualified mortgage rule means lenders will also have to retain an additional five percent of the loan amount in an escrow fund to help fund the loan should it go into default.

The bottom line with the qualified mortgage? It might be more difficult to qualify for a mortgage next year. Sorry, but that's just the way it's going to play out. If you're on the financial fence and can't decide if now is the time... it just might be.


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