Mortgage Changes: Ready or Not ... Here They Come!

By
Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
 
Mortgage Changes:  Ready or Not ... Here They Come!
 
 
     
     During the last few weeks, there has understandably been some reluctance on the part of hopeful potential Home Buyers to jump into the Home Buying Market. I've heard many familiar explanations beginning to crop-up again.
 
      Do any of the following sound familiar?
 
  • It's back-to-school time. Our focus is on school and school activities
  • Summer Vacations were in play
  • There's limited inventory
  • Job growth & Job stability is in question

      And of course, the latest ...

  • The Government Shutdown
  • Potential Government Default

      These last two have definitely proven to be unnerving for Home Buyers and Mortgage Lenders alike. The many uncertainties surrounding these issues have shaken-up the Financial Markets also. But as of right now, we have seen a rather quiet reduction in Mortgage Interest Rates ... about a half-percent dip in the last 30 days. Time will tell if this remains the case.

      As though all the recent disruption and uneasiness hasn't been enough, there are more Mortgage lending changes coming in the next few months too.

      What are some of the Mortgage changes on the horizon?

  • Tighter Underwriting Standards ... in regards to Down Payment requirements and Loan-To-Value limits.

      Conventional Loans will require 5% Down; FHA will remain at 3.5% Down Payment minimums.

  • Debt-to-Income Ratios will be reduced with upcoming changes in play, after examination of the industry and Mortgage Reform discussions.

      Where I as a Mortgage Lender can now approve Borrowers' loans with a debt-to-income ratio of 50%, 45% in other programs ... the new guidelines will likely be capped at 43% or lower, per the "Ability-to-Re-Pay" revisions that start January 10, 2014 for ALL Lenders. For those hopeful Home Buyers close to the "bubble" on debt-to-income ratios, this change will prove to be of specific interest and challenge.

      Mortgage Changes: Ready or Not ... Here They Come! They say timing is everything. Those hoping to become Home Buyers have once again been provided ample reason to jump into the housing market sooner than later. Their time frame for action is the next 3 months. As of January 10th, 2014, and after ... the new Mortgage Lending changes kick-in and additional challenges will come into play.

 

   * Hoping to Buy a Home or Refinance in a Lincoln-Way Community, Will County, or elsewhere in the Chicagoland area? Contact me NOW!  I'll put my 36 years of experience and expertise hard to work on your behalf.
I can be easily found at:

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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

                                 IL Lic. #031.0006220  -  WI License #216987                                                                                                    

NMLS #175656

 

Gene Mundt, Mortgage Originator,  40+ years of #mortgage experience, will offer you exemplary mortgage service and advice when seeking:  #Conventional, #FHA, #VA, #Jumbo, #USDA, and Portfolio Loans in #Chicago and the greater Chicagoland region, including:  The #Lincoln-Way Area, #Will County, (#New Lenox, #Frankfort, #Mokena, #Manhattan, #Joliet, #Shorewood, #Crest Hill, #Plainfield, #Bolingbrook, #Romeoville, #Naperville, #Wilmington, #Peotone, etc.), #DuPage County, the City of Chicago, #Cook County, and elsewhere within IL and Wisconsin. 

 

Your Referrals & Testimonials are Always Greatly Appreciated! 

 

 

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Matt Kombrink 10/07/2013 12:17 PM
  2. Gabe Sanders 10/12/2013 10:07 AM
Topic:
Lending / Financial
Location:
Illinois Will County
Groups:
Realtors®
Mortgages
Chicago Area Real Estate BUZZ!
Advice for Buyers
Bananatude
Tags:
mortgages
buying a home
mortgage industry changes
qualifying to buy a home
approval for mortgage
january 2014 mortgage changes

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Rainmaker
739,179
Ed & Tracy Oliva
West USA Realty - Arizona - Fountain Hills, AZ
The Oliva Team Arizona Agents

Good Morning:  This is some great Info for all!!  Keep up the good work and keep the Info coming,  Good luck with your business,  E

Oct 07, 2013 11:37 PM #37
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Gene, thanks for the update in changes in constantly changing market. As it will impact home buyers, it also will impact sellers. 

Oct 08, 2013 12:17 AM #38
Rainmaker
1,229,665
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Phil:  My post was aimed at what I view as the majority. 

Jill:  Been 'round as long as I can remember, no doubt about it ...

Kathy:  Definitely!  And understand when and where those changes apply .. and don't ...

Kathy:  You're welcome!  And as I see it, informing and education is a large part of my job ...

Cynthia:  I like to think of government involvement as medicine.  Sometimes it sure doesn't taste good ... but it definitely serves a purpose ...

Nikitas:  You're quite welcome!

Kelly:  I like your attitude ... 

Ralph:  Thank you so much.  I hope you gained from reading it ...

Paul:  I'm sure we'll see more fallout.  The more banks and lenders must tow a line, that will be true ...

Marc:  They moved the goal post ... but with time, we will adapt.

Matt:  True!  Why face these changes, if you can avoid them by buying now?

Carla:  Agreed ... and pre-approved earlier in the thought process too

Debbie:  The fact that there will be higher and tougher standards will delay buying for some.  The act of obtaining a loan .. the process itself ... remains much the same.  And the need to work with good professionals remains the same too ...

Evelyn:  Another hurdle ...

Laura:  I agree ... with time this will be the "norm" ...

Tammy:  You're definitely seeing a distinct portion of the buying market ...

Jeff:  Time will tell how that plays out.  Much depends on factors unknown or unimagined yet ...

Nancy:  Great advice.  And the sooner your Buyers get to a Lender, the better for them in the long run ..

Bill and Dorie:  I think as a Mortgage Lender, you can understand why I don't "pray for Cash Buyers" ...

Michael:  From what I understand, they are re-visiting that issue ...

Nina:  And we wonder why they think we are trying to pull something over on them??  All the asteriks, explanations, and maybes make our jobs difficult.  You're right about that ...

Goran:  I agree!  Getting "to it" sooner than later too!

Michael:  I think that's a simple answer ... they are out of touch.  Period ...

Ed & Tracy:  Thank you ..

Pamela:  They definitely go hand-in-hand ...

Gene

 

Oct 08, 2013 01:02 AM #39
Rainer
46,764
Christina Laidley
Bellalago Brokerage Inc. - Kissimmee, FL
I am the Key to the Home of Your Dreams!

Great post! Thanks for the heads up. Can't say I'm not worried about the government "shutdown" but I've heard that excuse more than once already too.  

Oct 08, 2013 01:03 AM #40
Rainmaker
1,229,665
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Christine:  We have great reason to be worried about the government shutdown ... you're not alone!

Gene

Oct 08, 2013 01:08 AM #41
Rainer
260,703
Kevin A. Guttman-Author, ReverseMortgageSpecialist
NMLS #384936 - Colorado Springs, CO
877-251-9709

Gene,

Good post.

Change is a comin'!

Thank you.

Kevin

Oct 08, 2013 01:16 AM #42
Rainmaker
537,522
Rob Spinosa
Guaranteed Rate, Marin County, CA - San Anselmo, CA
Vice President of Mortgage Lending, Marin County

If any real estate professional questioned what Active Rain does best, I would say this blog post is a good example.  When I'm out in the field and talk to agents, far too many are unaware that this is right around the corner.  Anyone who says, "Oh, a change to 43% DTI won't affect very many..." has not originated a good number of loans in the last 5 years...

Great post.

 

Oct 08, 2013 01:49 AM #43
Rainmaker
558,816
Maria Gilda Racelis
Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington - Manchester, CT
Home Ownership is w/in Reach. We Make it Happen!

Hi Gene: Got to bookmark it for my reference. I have a hard time memorizing the debt-to-income ratio. On top of this, I will have to parade with you in encouraging the buyers to make a decision now. Tighter credit guidelines and more restrictions will surely be a challenge for every one in the business and for both the home buyers and sellers.

Oct 08, 2013 03:02 AM #44
Rainmaker
1,229,665
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Maria:  Your joining the "parade" of professionals helping to get the word out about these changes will be much appreciated ... thank you!

Gene

Oct 08, 2013 03:28 AM #45
Rainmaker
396,829
Bill and MaryAnn Wagner
Wagner Real Estate Group - Ocean City, NJ
Jersey Shore and South Jersey Real Estate
Thanks for the heads up Gene. Many of our lenders are beginning to discuss the upcoming changes as well.
Oct 08, 2013 04:13 AM #46
Rainmaker
315,920
Wayne L. Brown
Franklin Advantage Inc. - Alpine, CA

Gene

Good post, and congratulations on the feature.

Always seems to be something in our industry, and Yes- these upcoming changes will definitely have an impact for new or repeat buyers alike.

Thanks for posting.

Oct 08, 2013 04:33 AM #47
Rainmaker
1,229,665
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Stick with those Lenders then, Bill ... they're definitely trying to educate and assist.  Good attributes for your Lender to have ...

Wayne:  Thank you!  And the changes will effect some, no doubt about it.  Getting direction and assistance far ahead of buying is becoming almost mandatory ...

BTW ... sure hope you're hosting a Mortgage "crawl" using your bike.  Talk about a fun way to learn about home buying and financing!

Gene

Oct 08, 2013 06:11 AM #48
Rainmaker
1,086,367
Greg Nino
RE/MAX Compass, formerly RE/MAX WHP - Houston, TX
Houston, Texas

Correct me if I am wrong, but hasn't it always been a minimum for 5% down on Conventional and 3.5% down for fha? What am I missing?

Oct 08, 2013 08:23 AM #49
Ambassador
4,300,186
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Gene, DTI is going to make a big difference for borderline buyers. All welcome change!

Oct 08, 2013 09:55 AM #50
Rainmaker
723,229
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale

Gene-We should not expect much of anything to remain the same, except change. Nothing is in concrete.

Oct 08, 2013 11:09 AM #51
Rainer
103,107
Rosie Moore
Serving Sugar Land, Richmond, Rosenberg, Missouri City - Sugar Land, TX

Thank you so much for keeping us up to date on future mortgage changes.  Doesn't debt-to-income ratio vary depending on the type of loan?  I think for conventional it's 36% and for FHA it's around 43%.

Oct 08, 2013 11:26 AM #52
Rainmaker
1,229,665
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Greg:  Right now, there are 97% Conventional Loans in place and available.  They are going away soon, but have been around for a long time.  Maybe the Lenders and Mortgage Insurance companies you have been associated with are not able to do them?

Praful:  Even seemingly small changes can have a rippling effect .. no doubt

So true, Wayne!  And especially true in our industry ...

Rosie:  Yes, it can vary, as you say.  It's dependent on the mortgage program, the mortgage type, and other relevent factors.  Very astute of you ... and exactly why it's important to stay informed and working with knowledgeable professionals ...

Gene

 

Oct 08, 2013 12:02 PM #53
Ambassador
4,213,757
Bob Crane
Woodland Management Service / Woodland Real Estate, Keller Williams Fox Cities - Stevens Point, WI
Forestland Experts! 715-204-9671

Great blog post Gene, I like the list of excuses, far too many people continuously use this list to permanently postpone doing anything significant in life.

Hopefully this post will help people to get moving on their mortgages and home purchases before they start using Christmas season as the next excuse.

Oct 09, 2013 04:33 AM #54
Rainer
9,879
Benjamin Randall
Envoy Mortgage NMLS# 6666 - Houston, TX
On Time Every Time

Good post and thanks for the info!

Oct 14, 2013 04:39 AM #55
Rainmaker
1,229,665
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Bob:  Seems like there's always something ... but many times the thought of having to pay more in the near future acts as a darn good catalyst ...

Benjamin:  You are welcome!

Gene

Oct 14, 2013 05:30 AM #56
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Rainmaker
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

708.921.6331 - 40+ yrs experience
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