HOUSTON, TX – Looking to buy a home; possibly a first time home buyer? In 2014, you may find it much more difficult.
The Dodd-Frank Mortgage Reform will be setting higher standards for lending.
One of the new rules in question is a cap on closing cost fees to 3%.
Rich Bonn of Leader One Financial Corporation explained, “Now that may sound like a really great idea but if you have someone who’s trying to buy an $80,000 home or $100,000 home they’re not going to be able to do that.”
That’s because $3000, the new capped fee on a $100,000 home may not cover all the costs, such as inspections, appraisers, title insurance and closing services.
“Regardless of whether the bank pays the fees, the seller pays the fee or the buyer pays the fee, it’s all still considered within that 3% cap.”
The law, initially intended to help low income home buyers, could instead stand in their way of buying a dream home.
“This hasn’t come into effect yet so it’s important you talk to your congressmen, talk to your senators.” said Bonn
Or you could just try to sneak in under the wire and buy your home before the confusing rules go into effect.
Good luck with that.