These summer 2015 significant changes in guidelines for mortgage financing will be implemented. For FHA loans (Federal Housing Administration Loans) changes in rulings will be implemented from June 15th and from August 1st mortgage banking will eliminate Good Faith Estimate and Truth in Lending Act disclosures.
FHA loans new rules could be an impact positively and at the same time negatively to home buyers. Among changes the evaluation form for gift funds, student loans, 30-day credit accounts, authorized credit accounts, and employments have the biggest changes.
Home buyers receiving gifted money on the transaction will be required to present bank statement of the donor. If the donor statement reflects a large amount of money deposited recently, an evidence of precedence also will be required.
For those home buyers that made scholarships loans debts and have them in deferment should know that this will be a problem. From now on, loans in a deferral for the past 12 months won’t be excluded from debt ratios.
Clients that have the privilege of 30-day credit, like American Express, mortgage banks will be required to verify payment conduct of the borrower for the past 12 months. Outstanding balances should have been paid in full, from the contrary the lender will utilize 5% of the balance as a borrower monthly debt ratio.
Authorized credit accounts also will be included in the borrower debt ratio. If the borrower presents to bank evidence that the primary of the account is making all payments for the past 12 month, this debt could be eliminated.
If you area a home buyer that has changed workplace or work line three times or more in the past 12 months, this will apply to you. The lender will request for extra documentation that proves stability of employment income. A minimum of six-month gap from the actual employment will be required no exclusions.
Other changes in the mortgage lending proceedings related exclusively for acquisitions with FHA loans products are over the corner. Disclosure documentations of Good Faith and Truth in Lending Act will be substituted. “Good Faith” estimate that was offered to borrowers after applying for loans as a projection of the mortgage offer will be replaced by brand new “Closing Disclosure”, and “Truth in Lending Act” disclosure will be replaced by the brand new “Loan Estimate”. New procedures require that all forms will be ready and delivered to the borrower at least three-day prior closing date.
Contact us for more information 954-835-5500 / www.mmdrealty.com