The mortgage lending industry does not want to ever hear this statement again, “I don’t know what kind of loan they gave me.”  Since 2008, we have experienced a flood of new regulations and disclosures.  All of them to benefit the borrower and provide consumer protection.  I am personally glad they exist.  The homebuying and financing process can be complex—especially if you don’t read the documentation along the way.

The paperwork may seem overwhelming for some, according to a survey conducted by Porch.com, of nearly 1,000 recent home buyers. More than three in four homeowners said they didn’t completely understand the terms of their mortgage. Thirty percent of homeowners admit to reading none or only some of their mortgage documents and say they have regretted not reading them entirely. Fifty-seven percent of homeowners say their family advised them through the mortgage process, not the lender.

But the lack of due diligence as they read the fine print, or their decision to rely on others, may be making buyers less confident. First-time home buyers are more than three times as likely as previous homeowners to say they feel unprepared to buy a home, according the survey.

Lenders are going to send homebuyers 50 or more pages of light bedside reading called loan disclosures.  They are all important, but some are way more important than others.  One is called the Loan Estimate, formerly known as the Good Faith Estimate.

The Loan Estimate lays out all the details of your loan transaction in a clear and concise format.  You will see the monthly payment, interest rate, fees itemized, cash to close number, loan type, prepayment penalty and other useful information.  Make sure you spend time on these five pages and prepare questions for your lender.

The initial disclosures do not obligate you to the loan.  They are there to inform and educate You, the consumer.  They are due to be sent out to the borrower within 3 business days from receiving the fully executed Purchase and Sale Agreement.

Whether you’ve bought 10 homes or zero, self-education, not experience, is crucial for home buying.  Regrets and expensive financial mistakes were not often due to inexperience, but instead not taking the time to consult with your lender.  Get started with one of our free education classes, click here!

Call, text or email me with your loan questions!  Thanks!!  Curt Tiedeman, NMLS 35554, 206.650.4202. Curt.Tiedeman@CaliberHomeLoans.com

Caliber Home Loans, Inc NMLS 15622