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New Mortgage Rules Help Tampa Buyers

Published by Lance Mohr | Filed under General

New GFE for Tampa home Buyer'sFirst time homebuyers, investors or others interested in purchasing real estate in Tampa will be pleased to learn that the Department of Housing and Urban Development (HUD) have changed the rules which governs how brokers and banks explain the charges you are likely to encounter when buying a home or condo in Tampa.

Beginning January of 2010, lenders will be required to use a new Good Faith Estimate or GFE form and revised HUD-1 Settle Charges report which makes it easier for consumers to quickly tell which loan is the least expensive.

Changes to the Good Faith Estimate or GFE and HUD Settlement Statement:

1. Shorter. The new GFE will only be three pages long.

2. Easier to Understand. The new GFE was designed to make it easier to read and quickly find the information that matters most when buying a new Tampa home. For example, the terms and interest rate of the loan must be clearly marked as well as information about any pre-payment penalties, balloon payments, variable rates or other unusual stipulations contained in the loan.

3. Easy Co-ordination. One of the biggest improvements to the GFE will be a tally of all costs and fees plus the ability to co-ordinate it with the HUD-1 Settlement statement to see where all the money is going.

4. Reading Your Rights. The HUD-1 Settlement Statement is likely to require lenders to read a script summarizing your rights and responsibilities as well as information on where and how to file a complaint should the need arise.

5. Lenders will be required to prominently display total fees and Yield Spread Premiums so Tampa buyers will know exactly what their full cost will be before going to the closing table.

6. Lenders must provide a GFE for all buyers to review before requesting tax returns or other verification of information from potential buyers; this allows consumers to comparison shop without feeling locked-in to any one lender.

7. Saves Time and Money. The new streamlined process is expected to save buyers time and money when purchasing a home.

Lenders and mortgage brokers are already beginning to adopt the new formats so don’t hesitate to ask which forms will be used when shopping for a mortgage.
November 25th, 2008