Know Before You Owe: 6 Questions To Ask Your Mortgage Lender


THIS ARTICLE FIRST APPEARED ON FORBES.

From weeding through paperwork to searching for optimal loan terms, purchasing a home can be as mentally taxing as navigating a foreign country without knowing the language. Let’s face it: Channeling your energy toward finding the perfect home in Atlanta, GA, or Sacramento, CA, is a much more pleasurable experience than agonizing over potential lenders and loan applications.

Yet, the loan and lender you ultimately choose should be just as important as the neighborhood you explore or the home on which you put an offer; therefore, the amount of legwork for each chore should be comparable. In an effort to bolster consumer education, improve the loan-shopping process, and cut through the jargon on loan documents, the Consumer Financial Protection Bureau (CFPB) last year established the Know Before You Owe mortgage program. (Now there’s really no excuse for not doing your homework before buying a home.)

Here’s a quick rundown on what Know Before You Owe entails — and what mortgage questions you should ask along the way.

Wield the Loan Estimate tool 

Prior to October 2015 and the start of Know Before You Owe, loan applicants would have received two forms upon applying for a loan: a Good Faith Estimate and a Truth-in-Lending disclosure. Created by two separate federal agencies and filled with overlapping information, the forms made it difficult for consumers to compare everything from loan amounts to interest rates.

 

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