Effective October 3, instead of providing consumers with Truth in Lending disclosures, Good Faith Estimates, and HUD-1 Settlement Statements, mortgage lenders must provide potential homebuyers with two new forms: a Loan Estimate and Closing Disclosure. 

To help consumers understand the new “Know Before You Owe” mortgage forms, the  Consumer Financial Protection Bureau has released two online tools on its “Owning a Home” website to help consumers better understand their options, compare multiple loan offers, and choose the mortgage option that is best for their situation. 

The Loan Estimate Explainer provides a sample of the new Loan Estimate form, which details all of the terms of a particular loan discussed with the consumer, including the type of loan, amount, interest rate, closing costs, and prepayment penalties.  The Closing Disclosure Explainer provides a sample Closing Disclosure, which must be provided at least three days before closing, so that consumers can compare the final terms to the Loan Estimate provided at the beginning of the loan process and negotiate any changes to the final terms of the loan.  Both tools also provide handy checklists, tips, and definitions to help consumers thoroughly understand the mortgage process. 

The CFPB’s “Owning a Home” website also provides several printable resources for consumers, including a home loan toolkit, monthly payment worksheet, and closing checklist, as well as links to many other helpful resources to help alleviate consumers’ confusion and concern over the mortgage lending process.