New Changes to Mortgage Process to Go into Effect in October

By Gladiator | Blog

Oct 02

home buyingNew changes in mortgage policy were announced by the Consumer Financial Protection Bureau in their “know before you own” campaign. These changes will make it easier for potential home buyers to compare mortgage rates while looking at new homes for sale. It will also allow loan customers to check their loan amount, interest rate, payments, closing costs, and any other terms and conditions. This is great news for those looking to buy a home, as buyers typically need to borrow 90% of the price of their home. The changes take place in a variety of different areas, and make it easier for a home buyer to fully understand the full cost of home buying. One of the major changes to be implemented is the converging of four documents into two. The new Loan Estimate document will replace the Good Faith Estimate and the first Truth-In-Lending Statement. The second document, known as Closing Disclosure, will combine the HUD-1 Settlement Statement and the final Truth-In-Lending statement. To help ease home buyers through the mortgage process, the new Loan Estimate has a full page that is specifically designed to help a home buyer to understand the full cost of the mortgage. This includes a calculation of what the borrower would have already paid after five years into the mortgage. They also contain an estimate of the APR rate, which can be used to compare mortgages side-by-side. This is great news for someone who is unfamiliar with mortgage terms, such as first time buyers. In 2014, 38% of home buyers were first-time buyers, and that number continues to rise as the younger generation grows into adults. If you’re confused about the home buying process, it may be beneficial to do some research before diving into searching for homes for sale. A staggering 92% of buyers use the Internet in some way during their search process, as it is a great tool for research needs. If you have any other questions, or aren’t sure where to start, contact your local Realtors for more information.

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