Mortgage Review for 2015 and a look forward to 2016
The two biggest events in 2015 was the Federal Reserve finally increased long term lending rates and we saw the rollout of TRID – Tila Respa Integrated Disclosure – basically a change by the Federal government for how mortgages need to be document from the lender to the consumer from the start of the mortgage process all the way through to the closing. This change is major for mortgage companies, attorneys and title companies. Its impact has already been felt by mortgages now taking on average an additional 12 business days to close. This should be able to be tightened up as all the parties get practice with the new process and work out the bugs.
In anticipation of the rollout of TRID we saw lenders being able to relax some underwriting guidelines to make obtaining a mortgage a little more streamlined and easier. The biggest changes were:
-Lowering the required documentation for conventional mortgages to allow consumers to more easily use rental income on their former primary residence when attempting to qualify for a new primary mortgage. This was a cumbersome process which is now very simple.
– 3% down conventional mortgages have returned to the market place. This gives consumers with strong credit the option for a low down payment loan other than FHA. The previous down payment requirement was 5%.
– FHA and VA reintroduce their 5 year ARM mortgages.
– Conventional loans allow for a non-occupying co-signor. Previously the consumer was limited to an FHA mortgage but they now have an additional option provided they meet the underwriting guidelines – ask your lender for details.
As for changes to come in 2016 – stay tuned!!
Senior Mortgage Advisor – Coldwell Banker Home Loans
NMLS License # 272434
Direct/cell – 973.474.7734