Many first-time home buyers, or even experienced investors, feel closing on a home is a frightening experience. For many years this fear came from buyers not knowing what they were actually paying for at closing, or what their mortgage was going to cost them in the end. This anxiety has prevented many eligible buyers from purchasing their home and ultimately fulfilling their dreams.
Buyers and hopeful homeowners, fear no more! It used to be you would receive as many as four disorganized disclosures when applying for and closing on a mortgage. Thanks to the Consumer Financial Protection Bureau home buyers will only see two standardized forms making it easier to understand their interest rate, what they owe and how much they need at closing. The first of these forms is the loan estimate and the second the closing disclosure. Instead of receiving these the day of or before, buyers now have three days to review prior to closing.
These forms bring positive change for buyers, however there are still things to consider before applying for a mortgage. The lender in most cases will only consider if you are able to repay your mortgage. It is up to the buyer to look at the whole financial picture of owning a home. Although the new forms show interest rate, what you owe and how much you need at closing it will not consider things such as appliances, repairs and maintenance. Do not let the fear of fine print scare you from investing in your future, utilize a tool such as the Home Loan Toolkit to help you along your path of owning a home!