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Making sense of the mortgage process
Friday, October 02, 2015
The Consumer Financial Protection Bureau (CFPB) has been working to help reduce the stress of getting a mortgage by simplifying the process, saving you money and making sure you know before you owe.
Starting Oct. 3, mortgage lenders will be required to supply borrowers with two vastly improved forms:
- Loan Estimate: describes the loan amount, interest rate, property taxes, insurance and estimated closing costs. This form can be used to compare mortgage costs between lenders.
- Closing Disclosure: describes the final loan terms, allowing borrowers to compare final costs to the Loan Estimate. Consumers must receive this form at least three business days before closing.
The CFPB has devoted a whole section of its website to demystify buying, financing and owning a home.
The Bureau has also created a step-by-step guide, its home loan toolkit, to help homebuyers choose the best mortgage, better understand the process and compare the costs of mortgage offers. Tools include a:
- Mortgage payment worksheet to help homebuyers discover how much they can afford to spend on a mortgage
- Closing costs checklist
- Definitions of key mortgage terms (escrow, principal, closing costs, etc.)
- Mortgage rate comparison tool
Consumers can also enter their ZIP code to find a list of local HUD-approved housing counselors to personally assist them with the home buying process.
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