New rules will impact ALL future mortgages

[MrChairman]

http://money.cnn.com/2013/01/10/real_estate/qualified-mortgages-cfpb/

[Anonymous]

A lot of that seems so straightforward.  I thought these were guidelines that all lenders already adhered to, but apparently not.  Seems like it's for the best really, as the incentive to be protected from accusations of predatory loans should appeal to all lenders.

[Mike_B03]

Wow, so does this mean that lender will no longer have thier own overlays, especially for DTI? I know normally, a 43% DTI is acceptable but there are lender who will go all the way to 55%. It seems that this will end that.

If it kicks in Jan. 21st, what happens to people who are already in the mortgage process, such as myself? We are buying a new build that isn't scheduled to close until this summer. I did see that it says lender have 12 months to fully implement the rules so hopefully that means people already in the pipeline are ok.

[tooleman694]

It goes by the rules that were in when you applied for the loan.

So for guys like us that have a 50 percent DTI, we are still good to go if it is dropped to 43 percent.

I think its bull crap they are lowering it down to 43 percent.

[Mike_B03]

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@tooleman694 wrote:

It goes by the rules that were in when you applied for the loan.

So for guys like us that have a 50 percent DTI, we are still good to go if it is dropped to 43 percent.

I think its bull crap they are lowering it down to 43 percent.

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Eh, it's probably for the better...it'll suck for people who want a specific, larger, more expensive house...they will have to settle for something cheaper, but it will make their finances more mangeable and less stressful.

Having said that, I hope it doesn't affect our loan! 

[tooleman694]

I agree if its for lower income buyers. But for higher income buyers, maxing out the DTI is ok. The income you have leftover would still be higher than many people earn in a year.

[tooleman694]

This will also hurt people in my special situation, my credit is good my income is good but my Wife has bad credit.

So im doing an FHA with a non-purchasing spouse. So they don't count her credit against me or count her income but I get her debts on my DTI ratio.

That makes my DTI very high, but really if her income was added in our DTI is actually very very low.

I would be so screwed.

[MrChairman]

tooleman, I am in your situation as well. My good credit, her bad credit. My DTI is now at 48% without her on the loan. With her and her income our DTI is 30%. And like you said now all of our debt it now "my debt" as far as the mortgage process goes. We just found out that our condo won't be ready until July. She has one collection that is dropping her score almost 100 points. We are going to try to pay this off  and get it deleted along with a couple of credit card within the next month.

[Mike_B03]

Hmm, accoridng to the article, and someone on Zillow agrees, the 43% DTI is for the mortgage payment only, not for total DTI. That would make a big difference.

I noticed that myself and thought it was possibly a typo but maybe not? Typically it was 31% for mortgage payment and 43% total DTI.

According to the person on Zillow, if the lender enacts new changes at any time before closing, then the new factors could play a factor. That would suck.

[tooleman694]

Oh its the frontend ratio, holycow ok.

then whatever I dont care lol.