About Jumbo Mortgage Guidelines

Licensed in more than 40 states, direct mortgage lender WEI Mortgage Corporation was founded in 2002. Along with refinancing programs and veteran loans, WEI Mortgage Corporation provides a number of options, including jumbo mortgages.

Jumbo mortgages are also known as nonconforming mortgages, as they are the loans made when borrowers don’t conform to the guidelines established by Fannie Mae and Freddie Mac. The conforming loan size limit averages $417,000 but can be as high as $625,000.

Because jumbo mortgages do not have to follow the federal guidelines that conforming mortgages do, down payments can be as low as 10 percent rather than the traditional 20 percent. Although jumbo mortgage rates are often higher and require lower debt-to-income ratios, they do not require mortgage insurance. Additionally, they may offer re-amortization, which lowers the borrower’s monthly payment over the period of the loan.

To qualify, self-employed borrowers need to provide two years’ worth of W-2s, as well as income verification for the last 60 days. Lenders also require that borrowers have enough liquid assets to cover up to six months of mortgage payments.

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Ability-to-Repay Rule Provides New Provisions for Lenders

Based in the Washington, D.C., area, WEI Mortgage Corporation helps consumers realize their dream of home ownership. WEI Mortgage Corporation provides a range of financial products and lending services while adhering to industry guidelines.

In recent history, some mortgage lenders made loans to consumers without regard to their ability to repay the loan. A lack of analysis of a consumer’s existing debts and qualifications based on introductory rates that would escalate after a few years caused many consumers to assume mortgage payments they could not ultimately afford. The resulting mortgage crisis led to a major economic recession in the United States.

In response to this problem, the Consumer Financial Protection Bureau (CFPB) is working to implement laws to require lenders to evaluate a consumer’s ability to pay before initiating any home mortgage loan. Under the new guidelines, to make adequate ability-to-repay determinations, loan underwriters must assess several key factors, including current income, current employment, debt-to-income ratio, credit history, and more. The ability-to-repay rule takes effect on January 10, 2014.

In May 2013, the Bureau amended the original ruling to address specific lending needs of small creditors, including community banks, which have less than $2 billion in assets and make 500 or fewer first-lien mortgages per year. These amended rules allow small lenders to make loans to consumers with a greater than 43 percent debt-to-income ratio and allows short-term continuation of mortgage loans with balloon payment features.

WEI Mortgage Corporation – Understanding New Qualified Mortgage Rules

WEI Mortgage Corporation, started in 2002, is a Virginia-based residential mortgage lender licensed in 40 states. A dedicated staff continuously improves their methods to ensure loan transactions are completed as efficiently as possible. WEI Mortgage Corporation strictly adheres to all local laws and practices, establishing long-term business relationships with real estate professionals who provide up-to-the-minute referrals and advice on real estate laws.

Current real estate knowledge is a must, as important rules and laws change frequently. New qualified mortgage laws will begin on January 1, 2014. A qualified mortgage is simply a loan that adheres to federal government standards, including the ability to repay rule and the Dodd-Frank Act. The qualified mortgage rule helps prohibit certain high-risk transactions and loan features, including limiting excessive upfront fees by lenders to help cover mortgage broker and loan officer costs, preventing toxic loan features like interest-only loans and loans with payment terms beyond 30 years, and putting limits on acceptable debt-to-income ratios (43 percent will be the limit starting in January). The qualified mortgage rules will provide legal protection to lenders who comply with the rules and help customers avoid high-risk debt situations.

Federal Government Finalizes Ability-to-Repay Rule

Prospective homebuyers who seek a mortgage loan will soon start seeing new requirements when they visit a lender like WEI Mortgage Corporation. It’s all part of the new “ability-to-repay” rule, which was finalized in January of 2013.

This rule was written by the Consumer Financial Protection Bureau in response to the financial crisis of 2008. During the crisis, home values dropped and many homeowners found they owed more money on their mortgage than their house was worth. The resulting foreclosures created a chain reaction that rippled through the economy. The government’s goal with the ability-to-repay rule is to prevent similar circumstances in the future by making sure homebuyers don’t take out mortgages that are too large and risky.

For consumers, this means that when they visit a lender like WEI Mortgage Corporation, they will be asked to document their income and other assets that can be used to pay off the loan. This will include current income, employment status, credit history, and monthly payments on other obligations like property taxes. The lender will use this information to make sure the mortgage is prudent for everyone involved.

WEI Mortgage Corporation: How Does Refinancing Work?

WEI Mortgage Corporation offers refinancing for home mortgages. This single action can save homeowners a lot of money, but many aren’t sure how to make it happen. How does mortgage refinancing work?

Refinancing provides an opportunity for a homeowner to replace his or her mortgage loan, and sometimes other debt, with a completely new mortgage. Since most mortgages last 15 or 30 years, many things can change over the life of the loan. If interest rates fall or a financial picture improves, a homeowner may be able to replace a costlier mortgage with a new one at more favorable terms.

Through a company like WEI Mortgage Corporation, homeowners can identify options that work best for their unique case. Most homeowners enter the decision-making process with a list of the goals they’d like to accomplish, whether that’s to lower monthly interest payments, use their equity to free up some cash, or simply pay off their mortgage more quickly.

Homeowners often find it helpful to check out current interest rates and any fees that might come with refinancing their current mortgage. These factors are important in determining whether the switch will save money or lead to headaches down the road.

WEI Mortgage Corporation: What’s the Difference Between Fixed-rate and Adjustable-rate Mortgages?

Like many residential mortgage lenders, WEI Mortgage Corporation offers a wide range of financial tools that can be customized for individual customers. Recognizing that each home buyer has unique financial needs, WEI Mortgage Corporation recently began offering custom-term mortgages that are unique to each borrower. While the most popular are still fixed-rate mortgages, home buyers may also choose adjustable-rate mortgages. But what is the difference?

Just like it sounds, a fixed-rate mortgage has an interest rate that is fixed over the life of the loan. Many consumers like this feature because they don’t have to worry that their monthly interest payment will skyrocket. However, this certainty comes at a cost. It will usually take longer to build equity because interest payments make up a large share of the payments at first, when the principal on the mortgage is large. In addition, monthly payments are generally higher, and the home buyer often ends up paying more in interest over the long term.

Some home buyers try to get around these disadvantages by seeking an adjustable-rate mortgage. The interest rate on these mortgages will vary with market prices, so customers risk seeing their monthly payments increase steeply. However, the payments are usually lower than fixed-rate mortgage payments, and borrowers can usually obtain larger mortgages if they agree to a variable rate.

WEI Mortgage Corporation: CFPB Regulation Aims to Fortify Lending Standards

A residental mortgage lender licensed in 40 states, WEI Mortgage Corporation furnishes a high professional standard of financial products and services to a diverse range of residential clients. For more information about WEI, including a message from President Wesley Yuan, please visit www.weicorp.com.

Recently, the Consumer Financial Protection Bureau (CFPB) unveiled its widely anticipated rule heighten mortgage standards for consumers and reduce lender liability. These regulations require loan providers to verify the capacity of each borrower to repay his or her debts before a loan is approved.

The CFPB aims to shield people from deceptive lending practices and to reassure financial institutions concerned about lawsuits. These lenders understandably display a reluctance to extend loans in fear that borrowers might seek legal redress when they come up short on payments.

The new standard for mortgages, called the Qualified Mortgage, was mandated by the Dodd-Frank Act and takes effect in 2014. It explicitly bans certain problematic loan features, including once-prevalent interest-only payment schemes that fueled the housing crisis.  If lenders make Qualified Mortgages, they are shielded by a “safe harbor” from borrower lawsuits in the future.  This rule has been applauded by both industry and consumer groups as a way to help borrowers know that they are receiving a loan that they can repay.