Time for a lending update! People are asking me about the new changes in lending, so here is what I have from a trusted lender.
January 10th is when the new Dodd/Frank lending regulations kick in. Most of the regulations are internal to the banks as far as documents and disclosures.
The difference for the consumer will be more application documents to sign at application, but most of all, there is a tightening of credit. Dodd/Frank is all about the “Ability to Repay” (ATR). Maximum Debt to Income ratios (DTI - Monthly consumer debt plus the new house payment divided by monthly gross income) will drop from 45% to 43%. This isn’t a drastic drop but it will affect some buyers.
So the best way to put it is that we’re going back to “Old School Lending.” What’s your income compared to your current debts? (DTI) If you lose your job, how much rainy day money do you have to make your house payments? (Reserves) Do you pay your other bills on time? (Credit Scores) The people that will feel the most affected by this will be the folks that purchased a home in the last 10 years because these changes will require so much more documentation. So we are sure to hear a lot of “We didn’t have to do this last time we purchased!” It’s a new lending market and a new lending world! It's always fun though! So please don't hesitate to call me anytime!
Don't hesitate to call David with any questions or for help in reviewing what your options are if you are planning to make a move! Just remember to tell him you were referred by Amy!
David Dikeman, Home Mortgage Consultant , NMLS # 488101
614.310.7655 phone | 614.330.7999 cell | 614.310.7755 fax
Website: www.insightmortgage.com/ddikeman
IF YOU HAVE QUESTIONS ABOUT SELLING YOUR HOME, BUYING OR BUILDING A NEW ONE, DON'T HESITATE TO CALL, TEXT OR EMAIL ME. 614-657-2005
My promise to my clients: I try to always remember what it is like to walk into this incredibly complex world of buying and selling with little or no knowledge of how the process works. I know that behind the door of your home and in your life there is much more going on than just your real estate transaction. I work with each person, not the house, and with the whole person, not just the issues surrounding the transaction. When I attempt to put myself in your shoes and contemplate what you are dealing with I am most effective.
The Benadum & Bumpus Team
Amy Bumpus
Straight Talk—Always
614-657-2005
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