NEW LENDING GUIDELINES for Exotic Mortgages… Real Estate Prices to Suffer?
Instead of qualifying for a mortgage at the popular 1.00% start rate banks will now qualify the buyer at the fully indexed rate.
The change is 3 years too late. It’s sure going to cause a lot of pain for some borrowers.
That is over $206,000 difference in qualifying. If a large percentage of home buyers over that last three years used these types of mortgages to qualify and their new loan adjusts to the higher rate…. they can no longer refinance.