Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Saw this article on CNN that talks about new rules coming into effect on January 21st, though it does has that banks have up to 1 year to fully implement them.
We are currently in the home buying process (in underwriting at the moment) on a new build that won't be ready until June. Could these new rules affect our loan? The main concern is the new hard 43% DTI rule (which seems to have always been a guideline but lenders would go above that, and in our case, they have).
Chill - they don't go into effect until 1/1/2014, and even then, there's some latitude. But make no mistake, 2014 will probably be the worse year in real estate if QM remains, no one can qualify, prices will have to drop to entice qualified buyers. We will have to go thru a bit of pain to get this overturned.
Good point. I assume that prices will go down but I'm not sure.
My fiance and I are pre-approved as of right now, but it may make more sense to wait (simply because there are nice homes, but I feel like waiting will make things even better)
Any suggestions? January 10th is right around the corner and techincally speaking, I doubt we'd be able to close and stuff before that anyway. I just want to make sure that we won't make a mistake.
Depends who you are with. Big banks are not nimble, and will over-enforce the guidelines. Banks that service their own stuff and sell direct to FNMA will have exponentially more leeway in the new environment. Brokers are ****ed.
I'm not conscerned with qualifying for the loan as much as waiting for the prices to drop.
I assume that the time it will take some motivated sellers to realize they need to lower there price will be about 3 months or so. At that point, rates may raise a bit and then force the price lower. But what do I know.
I've asked myself the same question in regards to the DTI rule, but so far I haven't found any reliable information. I want to say that the new rule is going to apply to loans submitted after January, but that's a personal expectation.
On the bright side, even if you're going to be affected by the new rule, you have 6 months to work on making your DTI look good. Do your research on that. Figure out exactly the numbers that the lender uses and see what debt you can pay down (or off).
Or use a non occupant co-borrower's income in a worse case scenario.
There's always going to be little tricks and/or exceptions, no matter the regulation, so don't loose sleep over it
I've asked myself the same question in regards to the DTI rule, but so far I haven't found any reliable information. I want to say that the new rule is going to apply to loans submitted after January, but that's a personal expectation.
On the bright side, even if you're going to be affected by the new rule, you have 6 months to work on making your DTI look good. Do your research on that. Figure out exactly the numbers that the lender uses and see what debt you can pay down (or off).
Or use a non occupant co-borrower's income in a worse case scenario.
There's always going to be little tricks and/or exceptions, no matter the regulation, so don't loose sleep over it
In the case of the OP, sure he has 6 months to get the ratio down, but he also has nonrefundable deposits on the table (or so they like to say) while he worries about rising rates and holding at 43%....I'm sure he wouldn't have issues getting his money back, especially if he is with the builder's lender. But I can certainly empathize with the constant stress of living in suspended animation watching his home go up, brick by brick. Fortunately, his original loan application is dated in 2013 and won't be scrutinized as a Safe Harbor QM loan.
I just thought of something (12 hours later): If you (the OP) have ever considered "dual apping" (2nd lender), you should get that loan app in before the 10th, while grandfathered.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
