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Mortgage lenders weigh in on what new rules mean for you

Mortgage lenders weigh in on what new rules mean for you
Photo provided by staff
Friday, January 10, 2014 - 6:57pm

Changes to mortgages and loans could hurt your chances of getting the home of your dreams.

When Laporche Wright bought her first home five years ago, she was still a student working to support herself and get an education.

"At the time when I first purchased my house I was still working to acquire my bachelors degree. I don't believe I would have been able to get into my house after the recession," shared Wright.

New federal regulations are now making it harder for people in her same situation to do the same thing.

"I am not going to sugar coat it and tell you there's nothing to worry about, some people will be affected. There’s no question about it," explained Mike Anderson of Essential Mortgage Company.

The idea is to prevent another housing crisis, but mortgage lenders like Anderson worry it could push many first time buyers out of the game.

"The fear that we have, because this is new, we feel the lower income to moderate income people might be affected by this, and those people who have credit scores that fall below 650," said Anderson.

Wright said she agrees with the reasoning behind the new restrictions but doesn't agree with the tight restrictions.

"No I don't support the tighter restrictions only because I feel that if a person is able to pay their monthly rent and they've been leasing for a while then they'll be able to afford a mortgage. My mortgage was actually cheaper than what my apartment was," explained Wright.

Anderson explained that there is a possibility some of the rules may change after they get a better feel for how the rules are impacting the market. In the meantime, if you're denied a loan, all hope is not lost.

"Are all deals off if you fall under that scenario? Not necessarily. So the business is not going to die off completely. Is it going to be more difficult? Yes. Is there more paperwork? Yes. Will we survive it? Yes. We’re just going to have some challenges with it," said Anderson.

Professionals from the business, including Anderson, should be testifying about these new rule changes soon in Washington DC.
 

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