The Consumer Financial Protection Bureau has released a new project containing the official forms that will make the mortgage industry a safer place for prospective borrowers shopping for home loans.
The measure, called the "Know Before You Owe" project, contains a three-page loan estimate form that contains information on mortgage amounts, interest rates and projected monthly payments. Brokers and lenders are required to provide this document to borrowers within three days of receiving a mortgage application.
"We're doing this to save you the trouble of flipping pages to find the right rule for filling out the form, and then flipping more pages to find the right comment to help you understand that rule," the agency said.
Meanwhile, the closing disclosure form is a five-page document and includes a detailed breakdown of the closing costs a borrower will have to make.
Both these documents have already gone through 10 rounds of tests and revisions, and are now expected to paint a clear and concise image to consumers of what it means to take on a home loan, and the costs involved. The CFPB will be open to further public comment regarding the forms until the beginning of November and will alter them accordingly.