If you are refinancing and getting a loan for a home, there are big changes that took effect this month. Recent laws created to protect consumers from bad loans have created some new guidelines for borrowers. First, the debt to income ratio has decreased to 43% percent, meaning that your total debt cannot exceed 43% of your income. This change in ratio will affect some borrowers that may have been approved under the previous guidelines. Secondly, the amount of documentation for loans has increased. If you thought lenders were intrusive before, things just got more intrusive if you are trying to get a loan. Be prepared to have documentation for everything- including small deposits into your checking or savings accounts. Lastly, lenders are being limited on fees that they can charge in conjunction with originating the loan. Lenders are restricted to 3% of the loan amount. This will mean a savings for some borrowers, especially those buying higher priced homes.
For more information on the recent regulations change, visit the link below.