Earlier this week, the Consumer Financial Protection Bureau (CFPB) issued a new rule that will require lenders to use the federal agency’s two newly redesigned mortgage disclosure forms beginning August 1, 2015.
The new forms were designed to help borrowers understand their options, so that they can choose the loan that is most appropriate for them and avoid costly surprises at closing. Both forms will use a similar format to help consumers compare the loan estimate with the final terms.
The new rule requires lenders to not only use the forms, but also dictates when the forms must be provided and limits how the final loan terms and costs can change from the original estimate.
Lenders must give buyers the new “Loan Estimate” form within three business days after the buyer submits a loan application; this form, which gives the consumer a summary of the loan terms and estimated loan and closing costs, will replace the early Truth-in-Lending (TIL) statement and Good Faith Estimate (GFE). Buyers are encouraged to use this form to compare the costs and features of different loans to choose the best option for them.
Borrowers will also receive the new “Closing Disclosure” form three days before their loan closes. Replacing the final TIL and HUD-1 settlement statement, this form provides an accounting of the loan origination. The three day period is designed to give borrowers time to review their final loan terms and costs, confirm they are receiving the loan they expected and ask questions or negotiate changes that occurred in the terms or costs.
Both of these new forms are essential in making the Atlanta home buying process smoother for both buyers and lenders.
If you’re in the market for a new home in Atlanta, see how easy the mortgage application process can be by using Academy Mortgage. To get started or learn more, please call us at 404-713-8862 or visit the Academy Mortgage website.
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