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Getting a Loan in West Palm Beach as the Landscape Shifts

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getting a loan | Mortgage ratesJanuary presented us with major changes to mortgage lending rules. These new guidelines aim to curb some of the excesses that occurred during the sub-prime years—hopefully resulting in a lower risk of default and foreclosure by borrowers and a healthier real estate climate for everyone.

QM: “Qualified Mortgage”

This all came about as one offshoot of the Dodd-Frank legislation that went into effect in 2014. It creates a new category, “Qualified Mortgage.” Lending institutions are required to document each loan they deem to be a QM; when they do, they benefit by being able to sell them to Freddie Mae and Fannie Mac, and are protected from legal action in the event of a future default.

The reason that these changes won’t keep most borrower from getting a Palm Beach County loan is that loans that don’t qualify (“Non-QM” loans) will still be offered by some banks—they’ll simply keep them on their own books.

Ability-to-Repay Rule

The bedrock requirement for a QM is an evaluation of the borrower’s debt-to-income ratio. That’s the projection of debts divided by income on a month-to-month basis — especially important when getting a Palm Beach County loan with a variable interest rate. If it seems to you that this calculation makes common sense for any loan—I’m in your camp! The reason a bank might choose to issue a loan that does not meet the letter of this requirement could be their analysis that the percentages dictated by the rules are too strict for a particular borrower.

Risky Business

A Qualified Mortgage can’t have any of the risky factors that were hallmarks of the mortgage meltdown. Included are “no” or “low-doc” loans; loans with terms longer than 30 years, interest-only loans, and those with minimum payments that don’t keep pace with interest rates, causing the loan balance to increase.

So: what’s the bottom line for buyers intent on getting a loan in West Palm Beach this year?

The good news: most loans will go through as before (estimates are about 95% of them). But more paperwork and longer processing times are likely, and since fees and charges for a QM cannot exceed 3% of the mortgage, getting a smaller loan might become more difficult if banks determine they can’t make a profit.

In any case, coming prepared is still the best insurance that your loan goes through as smoothly as possible. If you’re looking to buy a home in West Palm Beach this season, I’ll help make sure your preparation is first-rate!

 

 

    

 

Questions, Comments or For more information you can email Christian Penner at TheMortgageTeam@ChristianPenner.com or visit us online at www.ChristianPenner.com or you can call us directly at: 561-316-6800

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Getting a Loan in West Palm Beach as the Landscape Shifts


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blackwhite#Christian Penner, #Mortgage Broker West Palm Beach talks about #Real Estate West Palm Beach. He also serves other Local Areas and provides home #Mortgage Solutions for Palm Beach Gardens, #Jupiter, #Boca Raton, #Wellington and #Tequesta. #Christian Penner Mortgage Broker Jupiter has the #lowest mortgage rates and the best #home mortgage programs like; #Jumbo loans, #FHA Home Loans, #VA Home Loans, #Reverse Mortgage Home Loans, #Freddie Mac Home Loans, #Fannie Mae Home Loans and #HARP Mortgage Loans. #Christian Penner Mortgage Broker Palm Beach Gardens has Served the area for over 15 years with his #Home Loan Lending Needs and Works with #FEMBI Mortgage in Jupiter. You Can Also Find Him On fb mortgageFacebook at: http://Facebook.com/YourMortgageBanker

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ChristianPenner.com
http://www.christianpenner.com/getting-a-loan-in-west-palm-beach-as-the-landscape-shifts/
Getting a Loan in West Palm Beach as the Landscape Shifts