Federal agency to change mortgage qualification requirements
HOUSTON (KTRK) -- A change in the rules for home mortgages may soon impact our housing market and your ability to buy a home.
Before the housing bubble burst you could get a home loan without having to prove your income, but those days are official over.
In an effort to keep people from getting loans they can not afford, the Consumer Financial Protection Bureau has just announced what's required to get a qualified mortgage.
Borrowers will have to prove their income, prove they have enough assets to pay back the loan and detail their debt obligations.
As hard as it is to believe, that was not required before the housing bubble burst.
"I know secretly that everyone in the mortgage industry is cheering," Zeus Mortgage's Steven Kaufman said.
Cheering, according to Kaufman, because the rules will help keep unscrupulous lenders from taking advantage of first-time buyers.
But the new rules also require a debt to income ratio of 43 percent.
If a buyer uses more than 43 percent of their income on debt, they will not be eligible to get a loan from Fannie Mae or Freddie Mac.
Houston Realtor Betty Bezemer says the new rules will not slow down the area's booming real estate market.
"We have such a diverse source of income here, and as a result of that, jobs. And jobs grow houses," he said.
The rules are being phased in this month but go into effect next year. However, many banks are already requiring borrowers meet the new requirements.
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