Contact MargaretLoan Approvals Get Tougher in 2014
November 21st, 2013 Categories: Crofton Real Estate
Loan Approvals Get Tougher in 2014
New mortgage approval requirements in 2014 could make it harder for you to buy a home. In fact, you may want to make your purchase in the next 30 days if you are:
- Retired. Even if you have more than adequate savings to draw on for your monthly expenses, you may not qualify after January 1, 2014, if your current income doesn’t satisfy the income to debt ratio required for a new home loan.
- Self-employed or freelance workers. In order to prove stability in income, evidence regarding your income over several years may be required. If you have a great accountant who managed to lower your taxable income, that could backfire on you now.
- Lost your job during the recession. Even if you’re employed now, it may be months or years before your new job will be considered stable, based on the new loan qualifying requirements.
Other homebuyers who will likely be impacted negatively include those who rely on commissions, bonuses, or overtime pay for income and those who still owe on student loans.
In fact, most home-buyers will feel the impact of new regulations because lenders tend to be conservative when new regulations go into effect. They’ll likely err on the side of caution as they evaluate your:
1. Monthly Debt to Income ratios (43% or less)
2. Current debt obligations: credit cards, car loans, student debt, alimony, child support, etc.
3. Current or realistically expected income or assets (such as bonuses or overtime).
4. Current employment status (and length of employment).
5. Monthly payment for the property.
6. Monthly payment on miscellaneous loans.
7. Monthly payment for related obligation, such as the Condo or Homeowner’s Association, insurance, and taxes.
8. Credit history.
Since some people who qualify for a loan today will not qualify sixty days from now, it simply makes sense to buy in December before the new loan requirements go into effect. Contact me today if you’d like the contact information for Crofton area lenders my clients have recommended or if you have any questions for me about real estate in the greater Crofton area.
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