Lenders wary of loan changes

Federal rules are to take effect starting January 10th that may affect your getting a home loan. That is because lenders will now be required to scrutinize eight types of financial information about the borrower. It’s no longer just income and debt ratios that are being used to judge risk. These new laws are a reaction to the terrible lending practices that led the country into one of the worst financial crises in history. Now, the Federal government it seems has overreacted to lenders past indiscretions. These rules are at the forefront of many in the real estate industry because of the potential fallout it may have on a first-time buyer‘s ability to get a mortgage. Many believe these rules could not have come at a worse time, just as markets are beginning to show sustained growth. On average, first-time homebuyers are experienceing a weaker recovery compared to those on the upper-end of the housing market. These housing rules could become another drag on the housing market. Under the ability-to-repay requirements, lenders have to make a “reasonable, good-faith determination” that a borrower is able to repay a mortgage before them a loan, according to the Consumer Financial Protection Bureau.

For borrowers that will mean turning over proof of earnings in addition to other documentation which lenders did not have always require during the “housing boom” days of yore. There is a large segment of borrowers who wont feel the changes are any different, but everything is going to have to be documented. While it is still unclear what the effects of the new laws have on the housing recovery, one thing for sure is there’s bound to be hiccups along the way. Hey, our Federal government is involved, nothing ever goes off without a few hitches.

Why Use A Realtor?

There is no law that says you have to use the services of a REALTOR®, but it is a wise choice whether you are buying or selling real estate to hire one. Usually people consider cost, but if you are buying a home, using a REALTOR® typically doesn’t cost you a penny. It can however, save you thousands of dollars. Sellers benefit from the knowledge and expertise agents bring to the selling process and can add to their bottom line when they hire one.

Benefits to sellers
Real estate is a complicated maze of forms, offers, counter-offers, negotiations, and laws. For sellers, your REALTOR® will keep track of current market trends, he or she can recommend pricing, vet potential buyers, and market your property through the local MLS (Multiple Listing Service). Additionally, our experience allows us to help our clients avoid certain mistakes and pitfalls such as overpricing your home, which can turn off potential buyers. We’ll help you prep your home, connect you with our network of professionals, and help show your home to maximize exposure. REALTOR’S® put sellers in the best position to succeed. We’ll help you sell your home without the emotional attachment or inexperience, which could cost you thousands of dollars. Selling your home does not have to be difficult when you hire an agent to represent you.

Benefits to buyers
Buying a home is an important decision. A good agent can expose you to areas of interest, home styles, and financial options you might not have considered. Agents can facilitate a great buying experience and save you a lot of money. At the very least, your REALTOR® can help you avoid the numerous pitfalls that too often plague the journey towards home ownership. Simply put, agents help buyers realize the American Dream. We provide due diligence during the evaluation of the property, including finding qualified responsible professionals to do inspections and title searches. Your REALTOR® can guide you through the closing process to make sure everything flows together smoothly.
There is a difference between a real estate agent and a REALTOR®. Every agent is not a REALTOR®, but every REALTOR® is an agent. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate.

Contact me today! To discuss your “Real Estate Matters”
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