When you apply for a mortgage, it can sometimes be hard to understand how much of a monthly payment you can afford. Oftentimes you have to factor in additional fees and property taxes that add to the base cost of your monthly payment.
You can’t always rely on a mortgage broker or lender to ensure that you’re getting a responsbile loan that you can afford.
That’s why the Consumer Finance Protection Bureau (CFPB) introduced the Ability-to-Repay rule.
Under the new rule, lenders have to ensure that you can pay back the loan plus interest over the long term.
According to CFPB, in order to do that, lenders will need to verify the following before they can issue you a loan:
- Current income or assets;
- Current employment status;
- Credit history;
- The monthly payment for the mortgage;
- The monthly payments on any other loans associated with the property;
- The monthly payment for other mortgage related obligations (such as property taxes);
- Other debt obligations; and
- The monthly debt-to-income ratio or residual income the borrower would be taking on with the mortgage. (Debt-to-income ratio is a consumer’s total monthly debt divided by their total monthly gross income).
These rules will help protect you from lenders who might try to sell you an irresponsible mortgage that you can’t afford.
Learn more about the Ability-to-Repay rule.
Need help reducing or delaying your monthly mortgage payments? Call 888-995-HOPE to speak with a counselor or get help online.
If you’re considering buying a home, check out this FREE publication: Shopping for Your Home Loan: HUD’s Settlement Cost Booklet.
This booklet outlines the various aspects of the home buying process, but starts by asking some key questions to help you determine if you’re ready to buy a home. You’ll also find a worksheet for calculating how much you can afford.
Where can I go to find low-cost senior rental housing?
Asked by an anonymous Tumblr user.
The Department of Housing and Urban Development (HUD) has a number of resources to help seniors find affordable rentals.
They offer a low rent apartment search that shows low-rent apartments for senior citizens and people with disabilities, as well as for families and individuals. For low rent apartments, the government gives funds directly to the apartment owners. There is an income limit to qualify.
You can also look for multifamily units by state that rent to seniors and people with disabilities. HUD does not provide details like eligibility, waiting list information, or types of accessible features for these properties, but the list can help you identify potential rentals in your area.
There’s also the public housing program and public housing choice vouchers, commonly called Section 8. Public housing comes in all sizes and types and is managed by local housing agencies that are funded by the federal government. Public housing choice vouchers allow you to find a private rental and the government pays the landlord directly to subsidize the rent. Both programs are limited to low-income families and individuals.
If you have questions or need help finding a rental, talk to a HUD-approved housing counselor.