New mortgage rules designed to make the loan process easier for homebuyers will go into effect in January. The rules being implemented by the Consumer Finance Protection Bureau (CFPB) will require lenders to document a borrowers’ ability to repay a loan and follow some other common sense rules.
Tips from the CFPB – New Mortgage Rules
While many lenders, like Inlanta Mortgage, are reputable and seek to be your lifelong home financing partner – others are not so upfront. Make sure you are comfortable with your lender and the lending process by following these new homebuyer tips from the CFPB:
- Make Your Own Decisions – Only you can decide how much you are comfortable paying for a mortgage. The new mortgage rules will make the market safer and easier to understand. For example, lenders now have to make a good faith effort to determine if you have the ability to repay your loan and you don’t have high fees and certain risky features like negative amortization or interest-only periods. In the end, only you can decide how much you are comfortable paying for a mortgage.
- Use Your Market Information. You will get a copy of any appraisal or valuation at least three business days before you go to closing. Appraisals can provide you an estimate of what a home is worth. You may also pay to obtain your own independent appraisal. You should work carefully to understand how the appraiser arrived at the estimated value.
- Get Reliable Help – Any company that is paid to help you find or get a mortgage must train its agents, brokers and loan originators and make sure they have been through a background check. With limited exceptions, the people you hire to help you find a mortgage should be licensed or registered at the state or federal level. Ask your loan originator about their credentials.
- Watch Those Fees – New CFPB mortgage rules limit the fees a lender can charge and still make what is called a Qualified Mortgage. In general, qualified mortgages do not have particularly risky features and the points and fees are less than 3% of the loan amount, though fees can be higher for loans of less than $100,000. These rules do not require lenders to cap fees. You still have to decide for yourself whether it’s a good idea to pay higher fees to get a loan. And be sure to review your closing statement carefully to make sure there are no fees that you did not agree to pay.