Strict Home Loan Requirements In 2014 May Hinder Many Potential Home Buyers

A new article from LoanLove.com analyzes the new rules in place for mortgage borrowers this year and discusses how the more stringent requirements are affecting potential home buyers.

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San Diego, CA (PRWEB) April 10, 2014

Potential home buyers will be faced with a challenge this year as strict home loan requirements are put into effect to prevent borrowers from taking out loans they are unable to repay. A new article from Loan Love takes a look at all the new changes to the rules, to ensure that those who are starting their search for the best home loans are armed with the most up-to-date information. The team at LoanLove.com is devoted to help empower both first time and experienced homeowners with valuable resources, first-class knowledge and connections to top-rated industry professionals and has the mission of helping consumers and borrowers to obtain the latest information on mortgage lending news, the real estate market and the U.S. financial landscape in order to help them obtain a home loan that they will love.

The newly featured article titled, “Strict Home Loan Requirements In Effect For 2014 (Just Updated)” says, “Looking to buy a new home this year? If so, you better brace yourself for stricter loan requirements than what’s been seen in recent years. You can blame the bursting of the housing bubble for new rules designed to keep borrowers out of hot water. Regardless of the intent, the process has become more complicated and some potential homeowners may find themselves giving up on a home purchase for the foreseeable future. The new changes, which were put into place by the Consumer Financial Protection Bureau, can be loosely categorized as:

  •     Ability to repay
  •     Qualified mortgages
  •     Rules for existing loans
  •     Other changes”

As mentioned in the quote above, most of these stricter home loan requirements have been put in place to prevent home buyers from taking on loans that they will not be able to repay and ending up losing their homes to foreclosures, as happened to so many when the housing bubble burst. The ability to repay rules are the primary preventative measure here. These new home loan rules are tied to the borrower’s debt to income ration. Lenders will now be looking for a ratio of below 43%, and unlike in the past, there will be few exceptions to this rule because lenders will greatly risk their ability to resell the loan if they do not hold to these rules.

There are also new safeguards being put into place with the changes that fall under the “qualified mortgages” category. These rules are meant to prevent predatory lending practices and other actions that unscrupulous lenders may use to take advantage of borrowers by encouraging them to take out loans that they will not be able to repay. Loan Love also says,

“If you already own your home, keep in mind that the new rules also spell out the steps a lender has to make to attempt to help you return a past-due account to a personal one. Other changes you can expect to see involve more clarity in your mortgage bill and other communications from your lender. Deadlines for response to your inquiries are more precisely spelled out. Home buyers and the mortgage industry alike are playing under a new set of rules and face more stringent home loan requirements for 2014. The new playbook is the government’s attempt to avoid another housing market meltdown. But stricter requirements could catch consumers off-guard, possibly locking some out of home ownership altogether.”

The new Loan Love article then proceeds to give an in-depth rundown of each of the different requirement rule change categories listed previously. Those who are planning to purchase a home this year should look over these new rules so that they can make informed decisions regarding their home ownership plans and go into the home loan process with a better understanding of what to expect. For more information on the new stricter home loan requirement, click here to read the full article on LoanLove.com.


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