For many, buying a home can feel like childbirth: It’s incredibly painful in the moment, but all is forgotten once you take delivery of that new (split-level) bundle of joy.
Others, however, recall every excruciating detail — even some 10 years later.
Regardless of what specifically you remember about the last time you bought a home, if you’re planning to jump back into the market, there are some key changes you should know about.
Don’t worry—there’s good stuff in store, like the fact that the mortgage process has gotten a bit easier to manage.
So if a new home is on your wish list for the new year, we’re giving you the 101 on three programs that may help make the home-buying journey less bumpy,
The 101 on … “Know Before You Owe” Mortgage Disclosure Docs
With all the rules and regulations that typically come into play, it goes without saying that it can be tricky—and frankly overwhelming—to navigate the mortgage process.
A 2014 study from Discover Home Loans found that although 87 percent of respondents were confident that they could get a mortgage, fewer than half had calculated their down payment. And only 51% even knew what their projected monthly mortgage payment would be.
But new mortgage-disclosure forms introduced on October 3 by the Consumer Financial Protection Bureau (CFPB) should help make the mortgage process a bit more transparent.
The Details: You’ll now have more information—and more time to review it—thanks to these three new forms that would-be buyers receive:
Your Home Loan Toolkit This 28-page document serves as a primer for the entire buying process. It provides definitions of mortgage terms, background on how mortgage insurance and closing costs work and more.
Loan Estimate This new form is designed to make it easier for potential borrowers to compare different types of loans, including estimates of the monthly payment, the total amount owed, what you could expect to pay in closing costs and whether your interest rate could rise after closing.
Closing Estimate The new rules require that the estimate be provided to a buyer three days prior to closing, so you can fully assess what you’re committing to. It enables you to check the final numbers against your loan estimate and spells out your total monthly outlay—including taxes and insurance—so you’re crystal clear on how your new mortgage will affect your monthly budget.
Keep in mind … Consumers may find that the closing process is lengthened by about 15 days as lenders and settlement agents adjust to the new forms, says Chris Polychron, president of the National Association of Realtors.