December 15, 2015

Tips, Bits & Lists: Day 2


On the 2nd day of tips, bits & lists, we're featuring the 2 new mortgage disclosure forms. These forms went into effect October 2015 as part of the Consumer Financial Protection Bureau's Know Before You Owe mortgage rule and are designed provide greater transparency and make the mortgage process easier for today's borrowers.

New Forms

The Loan Estimate.  Within three business days after completing your loan application, your lender will give you a Loan Estimate form that should reflect the particular loan you discussed – including all terms and associated costs due at closing. Consider exploring your loan options from several lenders and choose the loan that is best for you.

The Closing Disclosure. This form provides all of the actual fees, costs and credits associated with closing your loan. Your lender is required to provide you with the Closing Disclosure 3 business days before your scheduled closing to review and ensure that the loan terms and costs closely align with those provided in your Loan Estimate.

Benefits of the New Disclosure Documents

  • Less paperwork – all the previous paperwork was 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

Understanding the purpose and function of the primary documents used in your homebuying or refinance process will help you navigate more confidently, from application to closing. Remember to lean on your team of experts with any questions or concerns you have regarding paperwork.  This is their job and this is your home.

Read other posts in this series and stay tuned for the next 10 days of tips, bits & lists.

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