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The Consumer Finance Protection Bureau (CFPB) is an entity formed by the government to oversee and maintain compliance of any companies doing real estate mortgages.  Regulations drafted by the CFPB will change the definition of a qualified mortgage for any loan applications received on and after Jan. 10, and many consumers may find themselves unable to meet the new requirements.

Mortgages must pass certain tests in order to meet the standards of a qualified mortgage.  For example, the debt-to-income ratio,which is used to compare an individuals debt payments to the income he or she generates, will be lowered, meaning that a borrower may qualify for more this year than they will starting January 10, 2014.  With rising home prices, someone who is able to purchase a home this year may not be able to come the new year.

With this ‘qualified mortgage’ some loan products will no longer be available including, but not limited to, terms longer than 30 years, negative amortization, and interest-only loan options.  Many would say this is a good thing as it protects both consumers and lending institutions against future bad loans.  Caps on APR and points and fees charged to the borrower are also included in these new CFPB-designed regulations, which could possibly cause the consumers to see increases in their note rate.

What this means to you…the faster you meet with one of our Mortgage Planners the better.  Let’s see where you’re at with your debt…figure how we can get it better managed to take care of the decreasing debt-to-income allowance.  Home prices are still affordable.  Interest rates are still low.  It’s still a great time to buy or refinance!

Please call our office at 808-961-0605.  We’re here to help…make sense of the confusion involved in home financing.  We look forward to working with you!

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