When you obtain a home loan, you receive a series of forms to review. It is a bit confusing. Each of these was created by different laws over the years. In many cases, they have overlapping details, which can make them even more difficult to understand. The new lender disclosure documents beginning Aug. 2015 will make the information given to home buyers much simpler to understand.
The New Loan Estimate Disclosure
The new loan estimate form combines numbers from the Good Faith Estimate (GFE) and Truth-in-Lending (TIL) disclosures. This form will give specifics on the terms of their mortgage, fees charged, estimated mortgage payments, and any risks involved. This can be useful when comparing multiple mortgage options either from one mortgage company or from different lenders. Mortgage companies will send you this disclosure within 3 business days of a application submission.
The Closing Disclosure Document
The closing disclosure document provides the specific costs charged in connection to a home loan. It combines facts normally provided in the Truth-in-Lending disclosure and HUD-1. To help simplify the different charges, they will be grouped into a few categories such as origination charges, government fees, and pre-paids. This disclosure comes further along in the transaction,… no later than 3 work days before closing.
New Lender Disclosure Documents Beginning Aug. 2015
These forms will start being used August of 2015. If you apply for a home loan on or after August 1st, you will notice the new format. This change does not apply to specialized programs such as home equity lines. Regardless of which disclosures you receive, you should always touch base with your loan officer if you struggle with understanding the figures involved with your particular home loan. The information on the new lender disclosure documents beginning Aug. 2015 in this article is shared only as an overview and does not cover every detail of the upcoming implementation.