If you're in the market to buy a new house, you might want to act sooner rather than later.
That's because in just about six weeks, new lending regulations will make it a lot harder to qualify for a mortgage.
Officials at Mercantile's Lending office in Quincy say they're still sorting through the 4,000 page document called the Dodd Frank Act, that lists all the new regulations.
But they say one thing is for sure, some definite changes are on the way when it comes to who will qualify for home mortgages.
Tony Gross with Mercantile Mortgage Center says starting January 1, 2014, the Dodd Frank Act will force some banks to be more stringent with who they loan money to.
"The reason for the Dodd Frank Act is really to protect consumers. It's to protect them from getting into a loan or a mortgage that they can't make the payments on," says Gross.
Gross says the regulations will now require anyone looking to get a mortgage to have a 43% debt to income ratio.
That's two percent less than what most banks require now. Another change, banks will also have to verify a potential borrower's income before giving out a loan.
"With the new regulations you're going to have to prove your income to me with pay stubs with W-2's, with tax returns so we're going to have to verify what you tell me your income is," says Gross.
Sherry Hills, a broker with Davis & Frese Realtors, says the biggest mistake she sees home buyers make: their eyes are bigger than their bank account.
Hills says the new rules will help weed out unqualified buyers.
"I warn buyers, don't buy over your income level, or not even up to the very top of it. Give yourself a little breathing room so you're not in a foreclosure in 3 years or 5 years," says Hills.
But one of the biggest changes for all potential home buyers, Gross says it will simply take longer to get pre-approved for a loan.
"You can't really put a time frame on it, as far as number of days, it's going to really depend on how serious the consumer is about wanting to get pre-approved and to go out and start looking for a home," says Gross.
Gross says it's also important to point out that many of these changes will have a bigger impact on nation wide mortgage lenders.
He says many locally owned banks are already more conservative with who they loan money to.
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