Wednesday, February 5, 2014 - Article by: John Paul Mulchay - Guaranteed Rate -
So we enter 2014 with more new lending regulations being implemented such as Ability to Repay (ATR) and the Qualified Mortgage (QM). Without getting too granular about what these items are and what they do, they basically have the effect of leveling the playing field for most lenders by allowing lenders to remove their investor 'overlays' (additional underwriting requirements not required by Fannie Mae, etc) and ensuring that compensation to lenders is capped to prevent steering and price gauging. Additionally, these new regulations actually protect the banks from future litigation from the home owner.
That leaves service, knowledge, and professionalism as the primary criteria for selecting the person to whom you entrust your financials and dreams of homeownership. Of course rate and fees matter, too, but the variances now seen in these important items are beginning to appear more minimal between lenders. Can your lender close in a short period of time, say two weeks? Does your lender provide you with different financing options that match your objectives with regard to your long term housing plans? Do you have to continually call and leave messages in the hopes that someone involved with your loan actually calls you back? Are you confident that all of your self employment or rental income will be calculated correctly by your loan officer and can they explain to you how your income was ascertained?
Along with leveling the playing field, it is more difficult for many to obtain financing due to the fact that the home buyer has not chosen a true, skilled professional to work with. It is important, now more than ever before, to make sure that the lender you choose will have the skillset necessary to successfully navigate the new regulations, make sure that you as the home buyer are informed about your choices, and employ strong service skills to ensure a successful, happy closing.
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