New home mortgage rules went into effect on January 10 of this year.  Driven by Federal laws (Dodd- Frank) from years ago, the purpose of the new rules is to reduce the possibility of another housing crisis and resulting financial crisis like we experienced in the recent past.  There are several changes which concern lenders and some that apply to new buyers.  Lenders may not charge more than 3% of the loan value in origination fees is a new rule that appears to help the borrower but will not if lenders stop making small loans because the 3% does not cover their costs of making the loan.  Another rule is that buyers must prove the "ability to repay" the loan.  This means additional proof of earnings, expenses, savings, payment records.  Providing this additional proof is likely to be time consurming and therefore extend the time it takes to process a loan.  For more information on the new finance rules visit    http://realtytimes.com/trending1/item/27046-20140106-new-loan-requirements-for-getting-a-mortgage     

These changes should mean fewer foreclosures in the future but also mean that for home buyers, contacting a lending institution and beginning the loan process well before they begin looking for the perfect house has never been more important.

If you are considering a home purchase, contact us at Lake Barkley Realty 270-522-3363.  We can explain to you the home purchase process and refer you to local lending institutions to get you started.