QRM and DTI have what to do with buying a house in Overland Park, KS

Thinking about buying a home in Overland Park or Johnson County Kansas? Have you heard of QRM? What about DTI. While we have all heard the sirens around the possibility of rising interest rates and rising home prices, the biggest threat to home ownership is QRM and DTI.

So what are QRM and DTI? QRM stands for Qualifying Residential Mortgage and unless you have read the Dodd-Frank Bill (What is that?) you probably have never heard the term. So what does QRM change? It changes your ability to qualify for a mortgage or the mortgage you want to qualify for. 

This is where that other lovely term DTI comes in, better known as Debt to Income Ratio. While you can currently use 50% of your after tax income to qualify for a home, under the QRM standards you will only be allowed to use 43%. If my math is correct? You just lost 7% of your purchasing power.

Now that we have lost 7% of our purchasing power let's see what other changes are in store. In the near and not so distant future our government also wants to eliminate Fannie Mae and Freddie Mac, can you say goodbye to the 30 year fixed mortgage? YUP! What else? They wanted to make everyone have 30% down payment, that would mean no FHA loans.

Worried about this? I am. Haven't bought a house yet? I would start thinking about that!


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  The Russell Home Team specializes in Johnson County Kansas Homes and Real Estate for sale. We are tech savvy realtors with over 10 years experience. Please join us on our Social Networking Network to stay up to date on Overland Park, Olathe, Leawood, Lenexa, Shawnee and all of Johnson Counties real estate news and more...

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