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You’ll be offered a mortgage that’s set up to be affordable.
When you apply for a mortgage, you may struggle to understand how big a monthly payment you can afford. You might assume that lenders and mortgage brokers will not make you a loan that you cannot afford. In the years leading up to the recent financial crisis, some mortgages looked affordable at first, but were set up with big increases in the payments. Lenders too often made mortgages to consumers who could not pay them back. As a result, many consumers ended up in delinquency and foreclosure.
Under federal mortgage rules, before a lender makes a mortgage loan, it must look at your financial information and make a determination that you can repay the loan. The ability to repay rule applies to mortgage loans made by most lenders. (It excludes certain types of loans, like home equity lines of credit, timeshare plans, reverse mortgages, and temporary loans.) There is also a category of loans, called “qualified mortgages,” that have more tightly controlled terms and features.
