Mortgage Pre-Approval on Encinitas Homes

In January 2013 the Consumer Financial Protection Bureau will finalize rules regarding mortgages for Encinitas homes. Those looking to buy Encinitas homes will define what is to be called Qualified Mortgages, which will set standards regarding the ability of the borrower to pay back the mortgage loan to the lender.

As a result of this new “Qualified Mortgage” system, many lenders have begun to set their own standards until there are standardized rules set forth through regulatory committees. Lenders are setting their own standards so that they will not be in violation of any terms set forth in QM and as a result many are erring on the side of caution and have become quite strict regarding income-to-debt ratios, as well as documentation of employment and income, and requirements for credit scores.

Many lenders believe that the debt-to-income ratio that will come out of the final QM ruling will be 43% and as a result lenders and banks have been instituting a 41% debt-to-income ratio, which would limit the number of individuals that can receive a home loan. These standards will also affect non W-2 employees, those earn commission, and the self-employed.

Those looking for real estate in Encinitas will have to wait to see what the final Qualified Mortgages become, but until then you can begin looking at homes for sale in Encinitas with an Encinitas Realtor. I guide each client through all processes of purchasing a home and can give you the most up-to-date information and help you through the pre-approval procedure.

 

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