Tuesday, February 10, 2015
Mortgage documents to become more user-friendly
If you’ve ever bought a house, you’re well aware of the stack of papers you must read through and sign — over and over again.
The paperwork can be intimidating.
But maybe not for long.
With the borrower in mind, the Consumer Financial Protection Bureau this year is doing a major overhaul of the mortgage documents used during the application and closing process. The revamped forms will be more user-friendly and a welcome change for borrowers, says Jeann Digman, vice president of mortgage lending at Dupaco Community Credit Union.
“The documents will be laid out differently to help borrowers better understand their options and know what they’re getting into,” Digman says. “It will be a plus for members, because it will be easier for them to understand the whole transaction.”
Homebuyers can expect to see the new documents beginning Aug. 1.
In the past, the documents had to be prepared 24 hours before closing. Under the new regulations, though, the forms must be ready three days in advance, providing borrowers more time to review the agreement, Digman says.
“This will prevent borrowers from being put in a situation where they’re seeing exactly what they will be paying right before they close,” Digman says. “If we have to make any revisions, we will have to wait 36 more hours before we can close.”
By Emily Kittle