We ran across a piece recently posted by The Motley Fool on its website which we thought would be applicable to all of you prospective homebuyers in 2016.
The story detailed a few new rules that you all should be aware of, specifically, as it relates to new forms, better online tools and access to getting a loan in a rural area.
*New forms introduced in October will make the mortgage application process much more transparent for borrowers next year
Within three days of applying for a mortgage, the borrower will receive a Loan Estimate Form that discloses all of the estimated costs of the loan, including taxes and insurance, as well as any ways that the loan’s payments could change in the future. This form also includes information that allows you to compare how quickly you would pay down the loan’s principal balance over a five-year period.
*Improved, unbiased information online
The Consumer Financial Protection Bureau (CFPB) has launched a new, online resource center for borrowers. The website is a powerful tool for getting through the entire mortgage process. By the way, the website is also unaffiliated with any lenders. You will find several well-designed checklists, guides, information sheets and other tools that make the mortgage process easier to understand.
*Better access to credit in rural and underserved areas
Effective January 1, the CFPB will expand its definition of what constitutes a “small creditor,” expand its definition of “rural areas,” and relax some of its standards required to maintain “small creditor” status for lenders serving rural and underserved areas. It will also expand the definition of a “qualified mortgage” to include certain loan types more prevalent in in those areas. The effect should be an increase in small creditor lending and easier access to credit for individuals and families living in rural communities.
So, there you have it. Hopefully, you can take advantage of these new rules in 2016 and use them to your benefit. We’re certainly here to help if you have any questions.