SAINT PAUL, Minn., Dec. 10, 2014 (GLOBE NEWSWIRE) -- Homebuyers now can find out at the beginning of their home-shopping process if they have what it takes to qualify for a home loan under today's tougher mortgage rules.
For the first time, Realtors throughout Minnesota and western Wisconsin can show consumers if they're likely to meet the test of the current "QM" (qualified mortgage) rules, using powerful new technology provided by NorthstarMLS. The best part is, no loan application is needed.
By contacting a local Realtor, consumers will be able to use the TLC (or "True Lifestyle Cost") feature, which includes a built-in QM qualifying engine that applies the same type of test mort-gage underwriters use to determine whether borrowers qualify, provided homebuyers know their current credit scores. While searching for homes, homebuyers can match their ability to qualify against any of the 28,000 single-family homes listed for sale today on NorthstarMLS.
"One of the great benefits for consumers is this new insight – TLC can help remove the fear that may be keeping them from purchasing a property," said Paul Sigurdson, a veteran agent with Counselor Realty, who was named 2013 Realtor of the Year by the Minneapolis Area Association of Realtors (MAAR). "It can be a dream-shattering experience to find a home that suits your wants and needs, only to be told you won't qualify after you've made an offer," he said.
Federal regulators created the new QM rules to address the last housing bubble, and compliance by both lenders and Realtors is mandatory. As a result, in order for consumers to learn if they qualify under the new rules, they no longer will find the answer by submitting a loan application and hoping for the best. Realtors now have access to an advanced calculator that contemplates the buyer's income, down payment, and property purchase price.
Sigurdson noted that in addition to allowing consumers to "peek under the hood to see how QM rules work, Realtors also will be able to help consumers discover if they qualify for more home than they thought; or if they don't currently qualify, help them figure out a game plan for what they'll need to get a loan approval. Homebuyers can now focus on properties that truly fit into their price range."
"This is just one of the many benefits that TLC offers," Sigurdson added. "Perhaps more importantly, homebuyers can see the additional total costs to own a home when deciding which one to buy -- costs even an underwriter isn't taking into consideration. Realtors can help consumers see the homes they are truly able to afford – and that's a win for everyone." The Realtor can now provide the same home ownership cost estimates that mortgage companies consider when evaluating home loans.
This new TLCengine, which is integrated into each NorthstarMLS listing, includes more than 30 unique lifestyle cost variables to run complex calculations and provide easy-to-understand re-ports. That allows Realtors to help consumers gain deeper insight when shopping for a home.
For example: a homebuyer with a gross monthly income of $5,000/month with $300/month in debt, a credit score of 720, using a 30yr fixed rate mortgage at 4.30%, and housing debt-to-income ratio of 32% (a total debt-to-income ratio less than 43%) should look for a TLC in a range between $1,600 to $2,150.
In addition to seeing if they can qualify under the QM rules, consumers can use other information as a benchmark to compare ownership costs among different homes. Each report, provided by a local Realtor, can be customized to each consumer's criteria.
Krishna Malyala, founder of TLCengine and a former vice president of technology for Citigroup in New York, explains that over time, the accuracy of the data will be refined.
"The TLCengine gets smarter when local agents add the actual expenses provided by the seller for each home they list," Malyala said. "Big data becomes smart data when you have real information being added to our system."
Sigurdson said consumers simply need to contact their local Realtor to get started. "It's 100 percent free to the consumer and a 100 percent benefit to our local real estate market," he said. "All real estate agents who are members of NorthstarMLS, which operates throughout Minnesota and western Wisconsin, have access to the technology," Sigurdson said.
"We want to bring deeper information and transparency to the home-buying process to empower consumers to make more informed purchasing decisions," Malyala said. "Does living in the city cost more or less than living in the suburbs? The answer varies for each consumer, but when you have all the costs, including commuting, parking, gas, car insurance, child-care costs and every-thing else, consumers can make smarter home-buying decisions because they'll know the costs to own and, more importantly, whether they really can afford it."
About NorthstarMLS
NorthstarMLS supports nearly 15,000 Realtors and appraisers in Minnesota and western Wisconsin, providing participating brokers and agents with fast and reliable information services and resources that make local property markets perform efficiently and effectively for both buyers and sellers. NorthstarMLS facilitated nearly 70,000 real estate transactions, valued at $15.1 billion, in 2013, and provided access for real estate professionals to more than 45,000 active listings, more than 1.4 million comparable and sold properties, and millions of property records from all Minnesota and Wisconsin. NorthstarMLS is owned and operated by the Regional Multiple Listing Service of Minnesota, Inc. (RMLS). RMLS is owned by the Realtor shareholder associations of Minneapolis and St. Paul, and provides services and support to the Western Wis-consin REALTORS® Association, St. Cloud Area Association of REALTORS® and the Greater Lakes Association of REALTORS®.
About TLCengine
TLCengine provides a patent-pending TLC (True Lifestyle Cost) engine that takes into account 31 lifestyle cost variables, helping real estate agents for the first time provide consumers with the "true costs" of home ownership. Local real estate agents help home shoppers use this technology to compare the real "cost to own" among homes in different neighborhoods and cities. Founded by Krishna Malyala, a Keller Williams Real Estate agent and former technology vice president at Citigroup, TLCengine launched in 2013 at Real Estate Connect in San Francisco, the industry's leading technology conference, and was one of 23 firms selected for Connect's Startup Alley.
*Editor's note: TLCengine® is a comparative tool — your actual costs of owning a particular home will vary depending on your personal circumstances, such as your FICO score, type of heating/cooling system, age, others."
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