What Does A Qualified Mortgage Mean To Naperville Homebuyers?
ConsumerFinance.gov defines a Qualified Mortgage as: A category of loans that have certain, more stable features that help make it more likely that you’ll be able to afford your loan. A lender must make a good-faith effort to determine that you have the ability to repay your mortgage before you take it out.
In 2014, Federal laws, overseen by the Consumer Financial Protection Bureau (CFPB), outlined Qualified Mortgages. In an effort to provide borrowers with better guidance regarding reasonable debt (from the CFPB), as well as provide lenders with better protection against lawsuits, Qualified Mortgages are meant to improve lending practices.
In this video, we provide a detailed explanation of lending practices and loan terms for qualified mortgages.
The laws include:
- Stable loan features for borrowers
- Improved legal protection for lenders who follow guidelines such as assessing the consumer’s ability to repay the mortgage loan. As of 2014, the borrower’s monthly DEBT (including the mortgage), cannot be higher than 43% of their monthly gross INCOME.
Unacceptable loan terms include:
- interest-only loans
- terms over 30 years
- negative-amortization loans that increase principal over time
- most balloon loans
Looking to buy a Naperville Home for Sale? Search Search homes at: www.RyanHillRealty.com. When you’re ready, call me, Teresa Ryan, at 630-276-7575. As a Naperville luxury real estate expert and Broker/Owner of Ryan Hill Realty, I have the experience and tools to help you sell your Naperville Luxury home.
As you consider buying a Naperville home for sale, download a free copy of our Home Buyer’s Guide. In it, you will find more guidelines, information, worksheets, estimated costs and more, to help you make the best estimations.