Shopping for a mortgage has just gotten simpler.
Lenders are now required to use easy-to-understand forms providing basic loan terms and good-faith estimates of closing costs. And closing agents are required to provide a settlement statement that clearly compares borrowers' final and estimated closing costs, according to the U.S. Department of Housing and Urban Development.
The new rules, added to the Real Estate Settlement Procedures Act, went into effect Jan. 1.
The new, simplified documentation is aimed at helping consumers fully understand the terms of a mortgage and more easily compare loans from different lenders. It also reminds consumers that they can shop around for the various required closing services, instead of simply accepting their lender's suggestions.
Wednesday, January 20, 2010
Mortgage terms in plain English
New rules this year clarifies mortgage terms for borrowers: