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So what is it, “eaiser” or “tougher” to get a mortgage in 2014 and beyond?

It seem that everyday you see an article from the MSM that says lenders are relaxing their guidelines for mortgages one day and the next, you’ll see another predicting gloom and doom for anyone who seeks a mortgage in the future.   No wonder people don’t know what to believe.

 

If you want the facts, you should talk to a local mortgage professional you trust.  They are the “boots on the ground” and have to deal with the new rules and guidelines everyday.

As someone who has been in the business a long time and seen the massive changes, I will say it will be tougher in 2014 for some people to qualify.  The “qualified mortgage” rule is only one reason why.  The agencies such as Fannie Mae and the big banks like Chase and Wells will react, tighten guidelines and what they call “overlays”, additional rules for their underwriters, on all mortgages they agree to buy from smaller banks and mortgage brokers.  If you got a mortgage a few years ago and seek one in 2014, you will be surprised at how much more documentation is required and how much work a borrower has to do to get their mortgage funded.

That being said, the mortgage market reacted to the meltdown long before Congress passed Dodd-Frank and created the new super agency, the Consumer Finance Protection Bureau.  The CFPB will now regulate almost everything financial in the country and will certainly use its power to justify its existence.

 

I think we can all agree that not everyone is well suited for home ownership, a long-term commitment that requires financial stability and discipline.  The push to make everyone a home owner that started under President Carter forcing Fannie and Freddie Mac to relax guidelines and accept subprime loans into their portfolio did not work.  Our home owner ship rate has fallen back to where it was in the 70’s.  Being a renter is not a mark of a bad person, it’s just a better housing solution for some people than ownership.

 

Bottom line is if you think you are going to seek a mortgage in 2014, gather all your documents and go see a local mortgage lender.  They should be able to tell you in a few minutes if you could qualify and what, if anything else you need to do before you start looking at homes.

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