The year 2016 will bring about many changes in the real estate market. In compliance with “Ability to Repay” rules, lenders are creating tools that will make mortgages more understandable for prospective home owners, which means that you stand to benefit. Here are a few things that will make the buying experience more manageable in 2016.
Gone are the days of jargon that only real estate professionals can understand. These new documents will bring transparency to the mortgage process and require banks to give prospective buyers a Loan Estimate Form within three days of borrowers submitting completed portfolios. The form will outline the cost of the loan as well as taxes and insurance that come along with property ownership. Home Buyers will also be able to use the document to determine how much of the principal balance will be paid in five years when the terms proposed in the original contract are implemented. Such transparency is meant to give consumers more options and encourage comparison between loans when shopping around for the best agreement.
A website dedicated to educating new home owners
The Consumer Financial Protection Bureau (CFPB) has launched a new website that has everything from calculators to credit score tools meant to help buyers obtain loans they can afford. The site is completely unbiased, which makes it the perfect resource for individuals trying to determine the type of house they can comfortably purchase.
More opportunities for rural areas
The CFPB is slated to expand its definition of “small creditor” to include those regions that are currently under served. These locations include farm areas as well as underdeveloped spaces that require owners to drive into the city for goods and services. The CFPB will include loans made on these properties in its “qualifies mortgage” category, which means that borrowers will be eligible for certain programs and government assistance in the instance of default.
What to expect
Since banks will be giving more transparency, and more educational tools will be available online, you can expect more stringent standards when seeking out a home loan. Lenders will continue to abide by “Ability to Repay” rules, which means that only those borrowers who are most qualified will be approved. You should go into the application process with good credit (700+ scores), steady income, and good rental history to receive the best results.
Caymus Realty Solutions is your alternative when you want to buy and sell fast. We buy homes in nearly any shape and sell them at fair market prices. Learn more about our company here!
Photo: Randy Glasbergen