Interesting lending information

So What Exactly is QM?

From January 14th, the new The Ability to Repay, or Qualified Mortgage (QM), Rule comes into force.

The Rule states that a borrower can’t have a higher debt-to-income ratio than 43%. It also lowers the fee that can be charged by the lender to three percent of the loan’s total amount.

Given that a lot of the practices the Rule bans have already disappeared from the mortgage market, the immediate impact on borrowers is going to be minimal. It is also very likely that innovative new mortgage products will launch to further ease the situation.

Nonetheless it is undeniable that, for borrowers with marginal debt-to-income ratios, obtaining a home loan is going to become more challenging. It is therefore even more important that you make sure you link them up with a professional mortgage adviser who will explore every possible avenue. For many new borrowers, however, these changes will not have a significant impact at all, beyond increased scrutiny of their circumstances.

What isn’t going to change in all of this is that we are still living in an incredibly positive market for buyers. Yes, mortgage rates have slowly begun to increase, but they are still remarkably low in historical terms and, together with still very sensible home prices that aren’t expected to rise as steeply this year, the perfect storm for buyers is very much still in place.
Article provided by MGM Mortgage.

 

 

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