The U.S. Senate voted Wednesday to toughen standards for home loans. An amendment to the Wall Street reform bill now being debated would:
- Ban “no doc” or “liar’s loans” requiring lenders to document income and ensure borrowers can afford their loans.
- Stop hidden payments to mortgage brokers for steering borrowers into higher-cost loans.
- Set standards to ensure borrowers can repay a loan based on the most expensive interest rate option included in the loan.
Changes to these lending practices, which have been cited as helping to fuel the housing market meltdown, would go into effect if the financial reform legislation passes.
What does that mean for you? Combined with the tougher lending standards imposed following the burst of the housing bubble, it means that it’s more important than ever to make sure that you maintain a good credit score and get pre-approved for a loan before you start your home search.
Credit Score. Learn more about credit scores and the factors considered in FICO scoring with this free “Understanding Your FICO® Score” booklet (PDF) from myFICO.
Pre-approval. Loan pre-approval lets you know how much home you can afford and increases your bargaining power since sellers know that you have the ability to make the purchase and are ready to close the deal and move in. Learn more about mortgages and pre-approval at my interactive mortgage learning center.
As a a Realtor®, I can help you search houses for sale in Arlington, VA, and also recommend trusted mortgage lenders who can help you obtain a loan and get that loan to close on time. Feel free to contact me for a lender referral at 703.447.0970 or Meg@MegRoss.com.
© Copyright Meg Ross 2010. This blog post is for personal, non-commercial use only. You are free to re-blog this post but you may not copy any portion of this content for other use.
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