Because of the implementation of the Dodd-Frank Act, it may be more difficult to qualify for a mortgage starting January 2014.
You remember the housing market meltdown a few years back, along with the ensuing taxpayer-funded bailout of large lending institutions. Well, in an effort to regulate the lending industry and protect the consumer/taxpayer, Congress established the Dodd-Frank Wall Street Reform andConsumer Protection Act of 2010 (Dodd-Frank Act). And many of its more ambitious new regulations will go into effect January 1, 2014.
The irony? Those changes may make it much more difficult for you to get a mortgage.
"Under the new rules, if [banks] want to lend correctly, by the book, they're going to [have to] leave out a lot of borrowers who would otherwise qualify today for a mortgage," says Jacob Gaffney, executive editor of HousingWire.com and HW Magazine, a financial publication covering the housing and mortgage industry.
In fact, according to a Housingwire blog post written by Marcus McCue, executive vice president at Guardian Mortgage in June 2013, 48 percent of borrowers who could get a mortgage through his bank today will not qualify after 2014.
So if you think you might be one of those in the 48 percent, you may want to read on and see why you should refinance now - before those new, stricter rules go into effect January 2014.