Easy-to-Read Mortgage? Read On!
Well, if Washington has their way (and in this case, we hope they do!), home buyers may soon see a much easier to digest version of the mortgage application and closing paperwork than they have previously. From fixed rates to ARMs and all of the hybrids in between, the pile of paperwork for a mortgage has always been a mile high – do you know what your mortgage really means? While it wasn’t the entirety of the recent foreclosure crisis, there was definitely a certain portion of the distressed homeowner population that didn’t understand the terms of their mortgage. Thus, they were caught off-guard when rates adjusted or new terms came into effect. The proposed and simplified mortgage process seeks to change that.
Here are some things that consumers can look for should the initiative make it past Washington’s watchful eye:
- Transparency – Full disclosure of mortgage terms up-front, prior to the application process.
- “Plain Vanilla” – Recent real estate markets brought to light an array of confusing and complex mortgage products. Lenders would be required to present simple, “plain vanilla” mortgage products FIRST.
- Leveling the Playing Field – Gone would be prepayment penalties in exchange for lower interest rates and hidden fees that reward a mortgage broker for selling a higher cost loan.
What’s the upside? From the lenders’ perspective, it may mean that a lower volume of loans are originated, but those that do clse would be done with more sound mind. Better to have difficulty obtaining financing and getting a loan one can truly afford as opposed to being stuck in an inappropriate product three years down the line with few ways out.
The Staff at San Juan Realty, Inc.
Tags: mortgage tips, ouray
