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Need A Mortgage? Don’T Get Pregnant U.s

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http://www.nytimes.com/2010/07/20/your-money/mortgages/20mortgage.html?_r=1&ref=business

Expectant parents shopping for a home are not the only ones concerned about the date of the baby’s arrival.

Mortgage lenders are taking a harder look at prospective borrowers whose income has temporarily fallen while they are on leave, including new parents at home taking care of a baby. Even if a parent plans on returning to work within weeks, some lenders are balking at approving the loans.

“If you are not back at work, it’s a huge problem,” said Rick Cason, owner of Integrity Mortgage, a mortgage firm in Orlando, Fla. “Banks only deal in guaranteed income these days. It makes sense, but the guidelines are sometimes actually harsher than they need to be.”

Back in the slapdash days of easy credit, lenders were more likely to overlook the fact that a parent was out on maternity or paternity leave. But now that lenders have become more conservative, they are requiring new parents to jump through more hoops to prove their income will be enough to cover the mortgage.

So before some prospective parents start spending their Sundays at open houses, they should be prepared to deal with some complications. They may have to delay the purchase, deal with the banks’ bureaucracy (and requests for extra paperwork) or buy a home they can afford on one salary.

“Maternity leave or any other leave of absence often prevents a person from obtaining a mortgage,” said John Councilman, president of AMC Mortgage in Fallston, Md. “There are some who long for the days when such strict proof of income was not required.”

The lenders’ new attitude can be traced, in part, to new loan quality-control measures that went into effect earlier this year. Fannie Mae and Freddie Mac, the two quasi-governmental mortgage giants that buy the bulk of conventional loans from lenders, have not changed their rules for qualifying for a mortgage. But the system of checks and balances has been tightened, making lenders increasingly skittish.

Fannie, for instance, now requires lenders to recheck a borrower’s financial situation right before the loan closes. That includes calling an employer to verify employment. Before, lenders required only a statement in writing. Fannie’s new rules went into effect on June 1. Freddie’s similar rule took effect in January.

This can surely only have one impact on house prices and I tend to feel it won't be an upwards pressure.

House prices have increased hugely because well two incomes can afford to borrow more than one income. Which is great in an economy where households have 2 incomes, in the present climate many households will probable become single income households.

Still I'm sure it's contained.

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How many people on here are thinking about taking out a US mortgage?

There must be a shortage of bad UK news on the wires this morning for this to get posted.

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http://www.nytimes.c...=1&ref=business

This can surely only have one impact on house prices and I tend to feel it won't be an upwards pressure.

House prices have increased hugely because well two incomes can afford to borrow more than one income. Which is great in an economy where households have 2 incomes, in the present climate many households will probable become single income households.

Still I'm sure it's contained.

Odd this reliance on 2 incomes...yet at the very same time, we are told the housing demographic has changed vastly in the last few years, with many more divorce, many more single parents and many more needing affordable housing and rising unemployment.

security based on 2 incomes seems to be a serious risk....as it logically is.

On the other hand, now we have the vastly overpaid hoards of Public sector minor management upwards being culled. Not saying bankers are short termist..of course.;)

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I believe they were told by Labour not to repossess homes of familites with young children.

Unintended consequence is for lenders to not to want to lend to them perhaps.

I've never been one to jump to the defence of any political party but the U.K Labour government setting the agenda for U.S housing policy. Ok :lol:

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How many people on here are thinking about taking out a US mortgage?

There must be a shortage of bad UK news on the wires this morning for this to get posted.

I never understand comments like this. The thread is clearly marked as American. If you don't want to read it, don't. Some of us are happy to see what's happening in an economy which we are likely to follow.

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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