The Consumer Financial Protection Bureau this week unveiled its proposed “Know Before You Owe” form. This short, simple 3-page form will summarize the costs and risks of a loan in three pages. It is designed to make it easier to shop for a mortgage and help avoid costly mistakes.
If approved, this form would replace the complex disclosure documents that are currently required. The first page would include interest rates, monthly payments, loan amount and closing costs. Also on the form are interest rates, how payments are calculated and how loan and payment amounts might change over time, taxes, insurance and other property costs. This will give a complete and total picture of the transaction that any borrower can understand. Lenders would be required to give the document to customers within three business days of applying for a loan.
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