September 16, 2015

Countdown to Know Before You Owe

Know Before You Owe

On October 3rd, the Know Before You Owe mortgage rule goes into effect.  This rule is designed to simplify and improve the way you’ll receive information about mortgage loans, both when applying for a loan and when you’re getting ready to close.

Today, borrowers receive different, but overlapping federal disclosure forms with the terms and costs of mortgage loans.  The rule replaces the current forms with two new forms:

  1. Closing Disclosure, given three business days before closing
  2. Loan Estimate, given three business days after application


  • Less paperwork – all the previous paperwork will be combined into two forms

  • More information about the cost of taxes and insurance and interest rate/mortgage payment fluctuations

  • Less confusion from less paperwork and clearer language

  • More time to review closing paperwork – a mandatory three-day period

  • More reliable cost estimates for services required to close a mortgage

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