As discussed back in March, the new Loan Estimate disclosure is on its way! Originally, the new disclosure was scheduled to start August 1, but the CFPB move the implementation date to October 1. Use this link for a preview of the new Loan Estimate.
The Loan Estimate is a major step in the right direction compared to the current Good Faith Estimate (GFE). Why? While both documents are three pages, the current GFE is lacking key information. When I go through the GFE with clients, in addition to those three pages, I also must reference:
- Page 2 of the loan application that shows the total monthly payment. The GFE only shows the loan and monthly PMI payment (if the loan requires PMI).
- Page 4 of the loan application that shows the summary of the transaction. The GFE only shows the closing costs and prepaid totals. It doesn’t show the cash to close, any seller credits to closing costs, or any lender credits to the cash to close.
- I also must have clients sign an intent to proceed with the loan disclosure because the GFE does not have a signature line on it
Some other great points about the Loan Estimate is that it will replace:
- The Truth in Lending disclosure is now included in the Loan Estimate.
- The Itemization of the Truth in Lending disclosures is also included in the Loan Estimate.
- The Loan Estimate also has a section showing whether or not your lender plans to service the loan. Hopefully, this will eliminate the servicing disclosure as well.
When going through the numbers with a client, the Loan Estimate will reduce the number of pages I must reference from 10 to 3 pages. That should mean my loan packet will be reduced by those 7 pages. Anything to make the stack smaller!
Got questions about the new Loan Estimate? Contact me today to discuss. If you are financing a home in Georgia, we can also discuss how I can help you with the loan!
