If you would have qualified for a mortgage loan in 2013, the odds are high that you'll qualify for one today, too, even after new lending rules that went into effect in January of this year.
And even though the majority of mortgage lenders say that the new Qualified Mortgage rules have made it more expensive for them to close loans, it's not certain if lenders will pass these costs on to their borrowers.
That is the consensus from recent studies and from real estate professionals who have analyzed the impact that the 2014 Qualified Mortgage rules have had on consumers and lenders.
The reason for such little impact? Most mortgage lenders had long ago enacted underwriting changes that were just as tough, or tougher, than those spelled out by the Qualified Mortgage rule.
"The vast majority of consumers will not see a change following the new rules," said Ken Fears, director of regional economics and housing finance with the National Association of Realtors. "Many loan originators had already tightened their lending standards long before these rules went into effect. The lending standards were already tightened up before the final Qualified Mortgage rule was approved."
The Qualified Mortgage rule, at its most basic, comes down to this: Lenders must make sure that the borrowers to which they loan money have the financial ability to pay back their mortgage loans on time. Loans that meet this requirement are known as Qualified Mortgages.
According to the new rules, the monthly loan payments and other total monthly debts of borrowers cannot be higher than 43 percent of borrowers' gross monthly incomes. Qualified Mortgage loans also can't stretch for longer than 30 years and cannot be interest-only. Lenders must also request the documents -- copies of such papers as your most recent paycheck stubs and income-tax statements -- that prove that you can pay back your loan. No-doc loans, then, can't be considered Qualified Mortgages.
Lenders can still originate loans that don't meet Qualified Mortgage standards. But they won't be able to call these loans "qualified."
When the Consumer Financial Protection Bureau finalized the new rules, some worried that they would make it both more difficult and more expensive for consumers to qualify for mortgage loans.
The good news? That largely hasn't happened.
Dani Babb, chief executive officer of Newport Beach, Calif.-based The Babb Group and a licensed California real estate broker, said that only a small number of borrowers have seen their chances to qualify for a mortgage loan fall because of the Qualified Mortgage rules.
Babb cites the numbers from research company CoreLogic stating that just 12.8 percent of all new mortgage loans originated in 2012 would not have met today's Qualified Mortgage standards.
There are two types of borrowers, though, who might struggle to find financing under the new Qualified Mortgage rules: those seeking jumbo loans and those who are self-employed.
Jumbo loans, depending on the part of the country in which borrowers live, can be any loans for more than $417,000 or $625,500. These loans come with high monthly payments, and might push borrowers past the 43 percent debt-to-income ratio required for a Qualified Mortgage.
Self-employed borrowers might struggle now that no-document mortgage loans fall outside the Qualified Mortgage guidelines. As Babb says, self-employed entrepreneurs will need other documents -- such as bank statements -- to help them verify their incomes.
Still, those borrowers with solid credit scores, stable employment and a debt-to-income ratio of 43 percent or lower should not see much difference when applying for mortgage loans today, Babb said. As always, borrowers need to be realistic about their incomes and debts and not try to buy homes that are more expensive than they can afford, Babb said.
"Understand your own financial picture before applying," Babb said.
While the impact of the Qualified Mortgage rules hasn't been a great one, there have been some changes reported by lenders. The most important might be this one, uncovered in a survey by the National Association of Realtors that was published in July of 2014: Since the Qualified Mortgage rules went into effect on Jan. 10, nearly half of lenders surveyed said that they had some issue closing a loan because of the new lending rules.
Another survey, this one conducted by Fannie Mae in August, found that 74 percent of respondents said that they expect their operational costs to increase because of the new Qualified Mortgage rules. This survey also found that 36 percent of respondents expect to tighten their credit standards because of the new rules.
This survey also suggest that those borrowers seeking non-Qualified Mortgage loans -- such as 40-year mortgage loans or interest-only loans -- might find fewer lenders offering such products. The Fannie Mae survey found that 80 percent of respondents either did not plan to pursue loans that wouldn't meet the Qualified Mortgage rules or would wait and see to determine their future plans.
The Fannie Mae survey did not chart whether lenders would pass their increased costs on to consumers. Babb, though, said that lenders wouldn't be able to boost their fees too much higher under the Qualified Mortgage rule. That's because the rules state that lenders can't charge upfront points or fees equal to more than 3 percent of the loan value and still count that loan as a qualified one. The new rules, then, provide some protection to consumers when it comes to higher prices.
Fears said that the new rules have also provided another benefit for consumers: They've introduced more clarity to mortgage lending by spelling out what is and isn't considered a Qualified Mortgage loan.
"These rules bring much-needed clarity that we haven't had in a number of years," Fears said. "And while doing so, the rules haven't restricted most consumers' access to the lending market. I think that has been a real benefit to consumers."
Those borrowers who want to make the lending process move as smoothly as possible still have to take the same steps as they did before the Qualified Mortgage rules went into effect this January, Babb said. This means presenting lenders with copies of their last two years of income-tax returns, two months of pay stubs and two months of bank statements. It also means paying off as many debts as possible to reduce that debt-to-income ratio, Babb said.
And most importantly?
"Don't get so emotional about your house purchase that you over pay or get into a bidding war," Babb said. "This still needs to be a sound financial decision."