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By Michele Lerner, Special to the Washington Post, Oakland Press

So how will the new mortgage rules affect you?

FHA loan limit decrease: Buyers who need to borrow more than $271,050 will be unable to use FHA financing and must apply for a conventional loan. [edited to apply to Michigan residents]

Ability-to-Repay/qualified-mortgage rule: Borrowers without a lot of debt won’t be affected by this new rule, but those who have a debt-to-income ratio above 43 percent will find it harder to qualify for a loan unless they can reduce their debt or boost their income. Self-employed borrowers will need to provide more documentation of their income, and all borrowers will be required to provide extensive paperwork to prove their income and assets.

Caps on loan origination fees: Lender fees will be limited to 3 percent of the loan amount, which means borrowers won’t be overpaying for their loans. However, the cap on fees may make lenders less likely to offer smaller loans.

Rising guarantee fees: Lenders are likely to pass on higher fees that they pay to consumers, which will add to the cost of borrowing. That is on top of rising interest rates, which many experts are forecasting will reach at least 5 percent next year. While that’s not high in historical terms, rising borrowing costs mean that many people won’t be able to get as much house as they had hoped. Still, some experts see an upside: Higher rates may mean fewer loan applications in 2014. Tight competition between mortgage companies for a smaller pool of applicants could mean that lenders will loosen their standards a little and make it easier for some borrowers to qualify for a loan.

New mortgage servicing rules: Mortgage servicers will be required to provide each borrower with a monthly statement that clearly shows their interest rate, loan balance and escrow account balance and an explanation of how their payment is being credited. Lenders will be required to credit mortgage payments on the day they are received. “Dual tracking” will no longer be allowed, which means that no foreclosure proceedings can be started until a borrower is at least 120 days late and until borrowers have completed a loss mitigation application and it has been addressed by the lender.

If you have any questions and would like to speak with a mortgage lender I recommend you speak with Troy Bergman of John Adams Mortgage.  Click here for a link to his website and contact information.

About William Brundage – Max Broock Realtors:
Named the Best Realtor by the Oakland Press, William Brundage is an industry leading Realtor bringing over twenty years of experience to successfully marketing and selling fine homes and estates. His dedication to his clients places him in the top 1% nationwide. Personalized service and client satisfaction are paramount. William is committed to getting you the best price and terms in the shortest amount of time.

Cell: 248-980-2455
Email: william@williambrundage.com
Website: www.WilliamBrundage.com