Ever been surprised by higher-than-expected closing costs when you bought a home? Or heard horror stories about it? Help is on the way via Housing and Urban Development (HUD), with the recent release of a proposed mortgage reform package to assist consumers in understanding the terms of loans they are considering.
This proposal will replace the 30-year old Real Estate Settlement Procedures Act (RESPA). HUD is requiring that mortgage brokers and lenders provide consumers with a standard Good Faith Estimate. A good amount of mortgage problems we see today are directly related to the fact that few people fully understand the home buying process.
The proposed Good Faith Estimate (GFE) will clearly state some of the important aspects of a loan including:
• The interest rate and monthly payment
• If the interest rate and principal balance can increase and by how much
• If the loan has a prepayment penalty or balloon payment.
HUD also requires that settlement agents read a "closing script" to borrowers at the settlement table and that a copy be provided to the borrower. There will be a certain script for each loan type that restates in a clear and specific manner every loan term and will also provide a visual showing borrowers which figures can change in the GFE and by how much.
The new GFE and proposed settlement scripts can be found at www.hud.gov.
Whether you are looking for a beach home for your retirement, investment property, vacation home or second home, I can help you find the perfect real estate in Gulf Shores. Don't waste any more time, let's get started today! Contact Lance Steffekat (251) 981-2225.
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