One of the new changes coming to mortgages is a new standardized good faith estimate form. This means every mortgage company is required to use the same form which is terrific. Unfortuantely, when it was designed, it left off some important information.
The Department of HUD developed the form to standardize the information. The new rules have left some mortgage companies interpreting the changes slightly differently. The basic rules are the good faith estimate is a form that can be used to compare costs, the fees can't change in certain areas and it can't be issued without a property address. The form will show the interest rate, the costs and give borrowers a place to compare costs.
The form does not show exactly what you need to bring to closing – it lists your costs, but doesn't show the cash needed for closing with your down payment. It also shows your principal and interest payment, but doesn't include the taxes and insurance part of the payment.
The settlement statement will be changing also to match the new good faith. The first page is the same, but page two will reference the numbers on your good faith so you can compare the numbers. There are certain areas where the fees will not be able to change at all unless there is a change in the loan terms – like mortgage amount, interest rates, etc.
It will take mortgage companies and title companies some time to get used to the new forms, but with any mortgage application taken after January 1, 2o1o, these are the forms that will be used! I am expecting that there may be changes to the forms after they have been used for awhile, but we'll see!!
I hope everyone has a safe and very Happy New Years!!
Leslie Vanderwerf, Advisors Mortgage - Email – Website
.
