The mortgage patch will expire soon, and this could impact many people’s ability to qualify for a home loan. Here’s what you should know.
During the last financial crisis, the Consumer Financial Protection Bureau put out something called a mortgage patch, which raised the qualifying limits on debt-to-income ratios. Essentially, this allowed more people with debts to qualify for home loans.
This patch is set to expire as of January 2021. In the meantime, there are people in legislation trying to push for the mortgage patch to be canceled right now. If that succeeds, it means that fewer buyers will be able to purchase homes because some of their debt-to-income ratios will be too high to qualify for a loan.
“ If you’re looking to sell, it may be in your best interest to do so sooner than later.“
In short, the dissolution of the mortgage patch could impact our industry. If fewer buyers qualify for loans, then the demand for homes also goes down, and home prices along with it.
So if you’re looking to sell, it may be in your best interest to do so sooner than later. If you’re looking to buy, talk with your lender to find out what your debt-to-income ratio is like so you’ll know if you’ll still qualify without the mortgage patch.
This is just a message to make you aware of this issue, and I intend to update you as more information comes out regarding the mortgage patch.
If you have any questions about this, don’t hesitate to reach out to me. I’d love to help you.