Next year, if all goes as planned (when does that ever happen, btw) mortgage lenders everywhere will have to follow additional guidelines when approving a loan. If the lender doesn’t follow these guidelines the lender can’t sell the loan on the secondary market and must hold a cash reserve retention amount of five percent if they approve a loan outside of these new guidelines. Which, btw, are still up in the air.
These new guidelines are part of the Qualified Residential Mortgage program, or QRM which specifics certain characteristics that a loan must have in order to be eligible for sale. These guidelines include a 20 percent down payment and strict debt ratios of 28/36 among others.
These rules apply to conventional mortgages a la Fannie Mae and Freddie Mac and when, or if, they come into play it will be more difficult to qualify for a conventional loan.
That means, if you’re kinda on the fence about getting a mortgage this might be a good time to apply before these new rules take effect.
Just another example of your government trying to help you.