Mortgages

Mortgages can be complex and confusing. To supplement the rule, the Consumer Financial Protection Bureau has created several resources to help you as you navigate the mortgage process.

Some of the new resources include: The Loan Estimate which makes it easier to shop around and compare loan offers from multiple lenders, and it includes definitions for unfamiliar terms.  And, The Closing Disclosure helps you avoid costly surprises at the closing table. You can use the interactive sample form from the Consumer Financial Protection Bureau Website to help you compare your Loan Estimate to the Closing Disclosure and make sure that you understand the reason for any differences.

For many homebuyers, credit is a big consideration in securing a loan. Many loans are insured or guaranteed by government programs which offered by the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), or the Department of Agriculture’s Rural Housing Service or Farm Service Agency (RHS/FSA). All other loans are classified as Conventional.

When applying for a mortgage, your credit may be the single factor when purchasing the home you want at a low interest rate. You may be confident that your credit rating is sufficient but have never actually seen your credit report. Or perhaps you’re concerned previous issues with credit will affect your ability to secure a home mortgage

What ever your circumstances, the first step is to obtain a copy of your credit report for a small fee and review it for accuracy. Credit reports are maintained by three credit reporting agencies: Experian, TransUnion and Equifax. You might consider obtaining your credit report from all three agencies, as each may contain different information and you cannot predict which agency will be supplying information to your lender.

If you find incorrect or missing information that would improve your credit score, you can report it to the credit bureau. Under the Fair Credit Reporting Act, consumers have the right to review and contest information in their credit reports. Even if your credit report reads exactly like you expected and your credit is in fine shape, having this information before making your mortgage application is worth the nominal fee.