This month, new consumer protections for homebuyers are going to take effect. The Ability-to-Repay and Qualified Mortgage rule is a “back-to-basics” approach to mortgage lending that will protect consumers from the debt trap of a mortgage they can’t afford. Starting January 10, lenders will be required to make a reasonable, good-faith determination that a borrower can afford to repay a mortgage. That’s a common-sense policy that responsible lenders have already been following for decades – and this month it will be the law.
The Ability-to-Repay and Qualified Mortgage rule is an important development for the mortgage market, and as the effective date gets closer, there have been rumors about what the rule does and does not do. Today, we are releasing a fact vs. fiction guide to help dispel some of the most common misconceptions about what this new rule actually means for consumers.