What do new mortgage rules mean?

What do new mortgage rules mean?

Posted in the Orange Park Forum

“Just Add Obama ”

Since: Mar 08

Jacksonville Florida

#1 Jan 11, 2013
JACKSONVILLE, Fla.-
Now that there are new rules in place governing the types of loans banks can make to home buyers, what do they mean for you if you're shopping for a new house?
It might mean a tougher time getting a loan, experts say.
The rules are supposed to protect borrowers from many of the exotic loans that were rampant before the housing crisis.
For example, there will be no more interest-only mortgages; no more loans where the principal increases over time, carries a balloon payment or has terms of more than 30 years; and if a borrower's total debt exceeds 43 percent of his or her income, they won't be able to get the mortgage.
The debt banks will be looking at includes student loans, auto loans, credit cards, alimony and child support payments.
Local real estate broker David Elian says the new rules hopefully will avert another economic meltdown.
"If a borrower doesn't have money for a down payment or wants to do one of these exotic loans, many times they're not ready realistically to be able to buy a home yet, it'd be better to see them save up enough money to be able to have the down payment and the closing costs," said Elian, of Keller Williams Realty.
Elian says if you want to buy a home, make sure you have good credit, and that means 12 months or more of never making a late payment.

“Just Add Obama ”

Since: Mar 08

Jacksonville Florida

#2 Jan 11, 2013
Who the hell are these people trying to kid? These are not “”NEW”” rules; these are the old rules, similar to the rules in place when I purchased my house in 1990.
So we are going back (for now) to the Bank telling you that you cannot afford the mortgage that you are too stupid to figure out for yourself. This must also mean that the Federal Government (Freddie Mac and Fannie Mae) are not going to be telling the lenders that they are Racist or are not being fair to the poor for telling they cannot afford a mortgage and will be investigated if they don’t approve.

NEW Rules….ROTFLMAO!!!!!!!!

Since: Jun 07

Location hidden

#3 Jan 11, 2013
So how do you solve REDLINING?

“Just Add Obama ”

Since: Mar 08

Jacksonville Florida

#4 Jan 11, 2013
Selecia Jones- JAX FL wrote:
So how do you solve REDLINING?
Please explain?

Since: Jun 07

Location hidden

#5 Jan 11, 2013
Redlining is the practice of denying, or charging more for, services such as banking, insurance,[2] access to health care,[3] or even supermarkets,[4] or denying access to jobs to residents in particular, often racially determined,[5] areas. The term "redlining" was coined in the late 1960s by John McKnight, a sociologist and community activist.[6] It refers to the practice of marking a red line on a map to delineate the area where banks would not invest; later the term was applied to discrimination against a particular group of people (usually by race or sex) irrespective of geography. During the heyday of redlining, the areas most frequently discriminated against were black inner city neighborhoods. For example, in Atlanta in the 1980s, a Pulitzer Prize-winning series of articles by investigative-reporter Bill Dedman showed that banks would often lend to lower-income whites but not to middle- or upper-income blacks.[7] The use of blacklists is a related mechanism also used by redliners to keep track of groups, areas, and people that the discriminating party feels should be denied business or aid or other transactions. In the academic literature, redlining falls under the broader category of credit rationing.

Reverse redlining occurs when a lender or insurer targets minority consumers, not to deny them loans or insurance, but rather to charge them more than could be charged to a comparable majority consumer whose business is more sought after.[8][9]

“Just Add Obama ”

Since: Mar 08

Jacksonville Florida

#6 Jan 14, 2013
A little off Topic Selecia however I appreciate the information. In general I would say if a business (bank in this case) chooses not to do business with a good client then they are a little short sighted, in my opinion.
Back on Topic, it seems to me the rules, the above story is touting as “New” are not new. For me, if you’re a home buyer, considering it is probably the largest transaction most of us will make, it would only make logical sense to know what you can afford. If you can’t afford the mortgage then you can’t afford the mortgage. I never understood why anyone other than a property investor would sign a interest-only mortgage or one with a balloon payment if property is not resold or refinanced before a specific time period.

I am guessing Selecia that you don’t need a loan agent to tell you how much of a mortgage you can afford, I know I don’t.

Since: Jun 07

Location hidden

#7 Jan 14, 2013
OK...do not buy more than you can afford. AGREED.

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