New mortgage documentation that took effect January 1st is aimed at helping consumers fully understand mortgage loan terms. The new good faith estimate format allows borrowers to more easily compare home mortgage loans offered between lenders and loan programs and encourages borrowers to comparison shop for a variety of required closing services instead of accepting a lender’s suggestions.
The new Good Faith Estimate ultimately gives borrowers an estimate of their settlement charges and loan terms. The first page shows how long the information is valid for, along with a summary of the loan characteristics. The second page summarizes the origination costs and settlement charges. The third page shows which charges can increase at settlement, as well as which ones can increase by only 10%. Read more about the new Good Faith Estimate.
