Buying a home is one of the most significant investment decisions that adults make. For most of us, buying a home also means taking out a mortgage. On October 3rd, the Consumer Financial Protection Bureau introduced new lending regulations to make the process more transparent and consumer focused. The changes make it easier for consumers to shop for a mortgage and quickly compare offers from a variety of lenders. The “Know Before You Owe” mortgage disclosure rule eliminates redundant federal forms and better equips consumers to raise issues during the lending process. Benefits of the new mortgage rules include:
- Simplified and improved disclosure forms that streamline the lending process. The rule was designed to reduce paperwork and consumer confusion.
- Clear language that describes the complicated loan terms and conditions. Disclosure forms are designed to highlight the information that has proven to be the most important to consumers.
- Comprehensive information about mortgage costs. The new forms will describe how interest rates and payments may change over time. This information will help consumers decide whether they can afford the home – now and in the future
- Timely distribution of final terms and costs. Currently, consumers may not receive a summary of terms and costs until the closing. Under the new rule, consumers will receive the final disclosure 3 business days prior to the closing. This change allow consumers to compare the final terms with the costs they received in their initial estimate.
The rules and regulations governing the mortgage process are designed to inform and protect consumers by making the loan terms easy to understand. Obtaining a mortgage is a complex but essential step toward home ownership. As REALTORS we have helped hundreds of clients become homeowners. Over the years, we have identified several seasoned mortgage professionals who we regularly recommend to clients. When evaluating mortgage brokers, look for someone who is energetic, flexible, knowledgeable and well versed on the recent changes to the lending process. We will be happy to recommend someone who has your best interests in mind. If you have questions about home ownership, or current market conditions, don’t hesitate to contact us. We would be happy to speak with you!