Changes With FHA Loans
FHA has made over 20 changes on as a result of the growing pressure from the Consumer finance protection Bureau to abide by the Ability to repay rule(i.e. qualified mortgage). As a result, more documentation will be required, and more stringent guidelines will be in place.
The most notable one is the one that will affect first time buyers the most. If you have student loans, and they are deferred, 2 percent of the balance will be counted against you every month. Here is an example: $50k in student loans equals $1,000 a month extra debt the banks will assume you have as a monthly debt obligation further decreasing your purchasing power when qualifying. The solution is to provide proof of the full payment, or installment agreement between customer and servicer.
FHA Loans Versus Conforming Loans
It is becoming increasingly clear that Fannie Mae and Freddie Mac are opening up their guidelines a bit, FHA is going in the opposite direction now. First time buyers are saddled with tens, if not hundreds of thousands of student loan debt, and having them deferred can no longer be the approach banks will look at when accurately assessing debt obligations. There needs to be another option. Too many states have their own restrictions as to what kind of programs a lender can offer in their state. Stated income is not allowed in many states where the crash was hitting Americans the hardest. If people want programs to open up, they must push for their local politicians especially in the state legislature and senate to open up lending guidelines with he attorney General within that state.
Mortgage Rates And Mortgage Market News: Stock Market
Rates have shown signs of dropping as a couple things occurred in the past two weeks: Chinese and European markets continue to show signs of weakening. The stock market, which relies heavily on European imports have dropped steadily this past week after an almost unstoppable six year Mega Bull Run trend. There may be a short term flight to bonds, even s there are fears China may liquidate their bond holdings here to raise capital. There are suspicions that a correction may be in place. As prices continue to rise, even as rates sty low, if your confident in your local job market, even if you may move to another job, I would say look now. If your planning on being transient, and don’t see your state as a 5-10 year destination, I would ay wait or look elsewhere. Regardless, patience now may no longer be a virtue , the clock on affordability may be slowly ticking some markets. In others, like the Midwest and South east, the prices are just starting to take off. The coastlines have already passed the point of bubble return. You now have to compete with cash buyers from other nations like in Northern California, and Hawaii, and Seattle, who pay cash and will outbid the average American buyer to get the house. Play the game but play wisely.
Mortgage Market News And About Ron Granado
Mortgage Market News was written by Ron Granado of Plymouth Guaranty Corp. Ron Granado is a guest financial writer for Gustan Cho Associates and a veteran real estate and mortgage market expert. Ron Granado is sought by many real estate professionals such as real estate attorneys, real estate agents, mortgage professionals, and bankers for his extensive knowledge in compliance and industry regulations in the real estate and financial markets.
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