Standardized Good Faith Estimate & Updated Settlement Statement (HUD-1)
Effective today, January 1, 2010 several new procedures and forms go into effect, courtesy of Housing and Urban Development, that, in theory will allow home buyers who are obtaining mortgages to better understand and compare their options. In theory, this will allow them to obtain better loan terms, lower interest rates, and lower closing costs. Copies of both forms are below.
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One of the big benefits is the standardized Good Faith Estimate. In the past, each lender used their own form/format to deliver pertinent information to the loan shopper. Obviously this could lead to making comparisons more difficult than necessary. Now each lender will be using the same forms and as result borrowers will be able to make value comparisons much more easily, and potentially, secure better terms.
Additionally, there are new requirements on lenders as to make sure that quoted amounts do not change between estimate and closing. In fact, some of the items cannot change without affecting the closing date. There are others that can change within certain percentages. As a borrower this gives you some certainty that preciously may not have been there.
Listed below are additional resources for more information. As always, feel free to give me a call 630.542.7732 or email me to discuss this or any other topic further.
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