Thanks to new mortgage disclosure guidelines from the Consumer Financial Protection Bureau (CFPB) that became effective October 3, 2015, homebuyers can expect a more seamless closing process and fewer headaches at the closing table.
The new rules simplify the loan paper-work so buyers understand exactly what they owe. Buyers can expect to receive two documents during the sales process — a loan estimate and a closing disclosure form, which are intended to be more transparent and could save them money on hidden costs and small-print fees that they might other-wise miss. The loan estimate details the transaction, including the estimated loan and closing costs. Consumers can use this form to do an apples-to-apples comparison when shopping for home loans.
The closing disclosure form, which details the final transaction, is provided to buyers three days before closing so they can confirm whether they are getting what they expected and negotiate any changes. The two documents mirror each other, making it easy to compare estimates with final loan terms.
Because of the strict timing rules lenders must follow, it’s important that buyers provide lenders with all the information they need to process their loan applications quickly. A qualified real estate professional can help ensure that all paperwork and negotiations with the seller are completed in a timely fashion.