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Why Is Getting A Mortgage Today Different Than Five Years Ago?
If you’re not a first-time homebuyer and have had one (or several) mortgages in the past, you may be a little surprised this go-around with the information and documentation your lender will ask for. Don’t be frustrated – these extra steps were put into place for YOUR protection!
The Consumer Financial Protection Bureau (CFPB) was formed in July of 2011, and this Federal agency regulates the consumer financial laws – including mortgage laws - and also educates and empowers consumers to make better informed financial decisions. The CFPB enacted the Ability To Repay Rule in 2014 to insure that mortgage applicants were truly qualified for the loans they were obtaining and to help prevent consumers from purchasing homes they simply could not afford.
While many lenders have always followed this practice, even before the rule was enacted, the CFPB has made this an industry-standard requirement so you can expect your mortgage company to consider all of the following:
- Current or expected income, employment status and assets used to repay the loan;
- Projected monthly mortgage payments including any second mortgages taken out;
- Monthly payments for taxes, insurance (both property and mortgage), HOA and/or any other monthly payment associated with maintenance of the property;
- All debts to include revolving, installment, alimony, and child-support payments;
- Monthly debt-to-income ratio using the total of all of the mortgage and non-mortgage obligations as a ratio of gross monthly income;
- Credit profile and history
Simply said – be prepared to provide paperwork to support income, assets and debts you list on your application………help your lender protect YOU.
MILLENNIALS IN POSITION TO PURCHASE HOMES
Are you in the “Millennial” generation? If so, there may be good news about buying your first home! A recent survey reported in the January 29, 2018, edition of “Market Watch,” revealed that of the 2,000 queried working millennials aged 23 to 37, 47% have accumulated $15,000 or more in savings and 16% have at or over $100,000 in savings. These assets includes savings, IRS, 401(K) and other retirement or investment accounts.
This up-and-coming age group is also just as likely to manage and plan a budget as their generational predecessors – Generation Xers and Baby Boomers. They worry more about money having grown up in a recessed economy, and they tend to keep finances separate from their spouses, another change in how previous generations handled joint assets. With high student loan debt and more money spent on groceries, gas, food and cell phones, this younger age group has to undertake a completely different mindset in order to insure future financial security and the survey indicates they are well on their way.
What all of this means for the emerging Millennial is more home buying power, with more accumulated savings and budgets in place to reach their financial goals. Residential Mortgage Corp can help you achieve your dream of buying your first home with many financing options that suit the “Millennial Strategy.” Click here to get a free, no-obligation consultation with one of our qualified loan officers, submit a complete mortgage application on line, or call our office at 910-483-1211 to see how Residential Mortgage Corp can help get YOU into your first home!
PURCHASE OR REFINANCE NOW - BEFORE RATES INCREASE!!
Interest rates are on the rise in 2018 – NOW is the time to purchase a home or refinance! The country has enjoyed historically low interest rates for many years but economic factors now indicate that interest rates could go up as early as March, 2018.
As quoted by a recent CNBC article, “Financial markets are beginning to price in a more aggressive Federal Reserve this year. After the government reported Friday morning strong retail sales from the holiday season and higher-than-expected core inflation, Fed rate hike probabilities shot up and moved into earlier months. Markets now fully expect two rate hikes this year and have nearly priced in a third. The probability of a rate hike in March surged to 84 percent from 78 percent a week ago, according to Thomson Reuters. More significantly, the second rate hike is now priced with a 55 percent chance to take place in June. Previously, it had been priced in for August, and for September not long before that.”
Call us today at 910-483-1211 to find out what interest rates are and to start the loan process. One of our qualified loan officers is ready to help you obtain your homeownership dream or refinance your home and take advantage of lower rates while they are still available.
THE DAY OF CLOSING – IT DOESN’T HAVE TO BE SCARY!!!!!
Your closing should be an exciting day for you and your family, and lenders like Residential Mortgage Corp. work hard to make that happen and take away the intimidation of the closing table. Many homebuyers – especially first-time mortgagors – dread the day of closing. They may have heard “horror” stories from friends or co-workers warning of long waits, tons of documents to read, cramped hands from signing and not-so-good surprises at the closing table.
By law, the lender must provide to you, no less than three business days prior to closing, a Closing Disclosure (CD) for your review and signature. The CD discloses all pertinent information about your loan, including the property address, sales price, loan amount, total mortgage payment, interest rate, all closing costs and any cash to closing you will need. This three-day rule affords you the opportunity to ask your loan officer any questions or request clarification, and also to be sure the loan you’re expecting is the loan you’re getting! You will be presented with a Final CD to sign at closing and if any fees or funds to closing change, you will be notified before you actually arrive at the closing agent’s office. You can also ask your loan officer to have a copy of your entire closing package sent to you in advance so you can read over all the documents you will be signing.
At Residential Mortgage Corp., we understand how our customers feel and we do anything we can to make the entire loan process pain- and stress-free. You can get a free consultation or prequalification today. Take the first step to homeownership with us!