A New, Easier Home Loan Process
Whether you're a seasoned home buyer or seller, or you're new to the home purchasing experience, navigating the choppy waters of the mortgage market can be a bit intimidating. There are plenty of forms to complete as well a lot of information required by the banks. Fortunately, a new law recently passed has been implemented to help make the confusing process of home sales and purchases much easier and simpler.
New Rules
A new rule recently established by the Consumer Financial Protection Bureau has made the mortgage process much more streamlined. This new rule requires lenders to use a standardized form rather than different ones depending on the lender's choosing. It also helps home buyers more clearly see their interest rate and how much they will owe on a new mortgage. In addition, borrowers now have three days to look over their new loan before they make a final decision on closing. The new forms will consist of one showing the loan estimate depicting the total amount as well as estimated monthly payment and final closing amount. Another form will be given before the final closing date that shows how, if anything, the loan may have changed since they initially applied.
Why the Changes?
For years, buying a home has been difficult due to the information required by the lenders. Because the process is so in-depth and time consuming, borrowers might forget or even not fully understand the implications of their new mortgage and how much money will come out of their pocket. Streamlining the process makes borrowing more transparent, and allows home buyers an opportunity to ask questions and better prepare their finances before closing on a house. Sometimes, buyers have been unpleasantly surprised by unexpected costs that are tacked on when they go to close. By giving them three days and a disclosure form, they can easily see what they will need to pay out of pocket.
What You Should Know
Since these new rules give buyers a three day window to review all documents before closing, you should take this time to read and fully understand all of the terms and amounts due. If you have questions, contact a mortgage lender like FCN Bank immediately so they clear anything up for you that you may have doubts about. It is important to note that this new three day requirement could delay your closing date even further than the three days. This will depend on the availability of the seller to close on the proposed date as well as the lender. Being prepared in advance before buying a home is an important way for you to feel confident about your decision.
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