Rule to protect homebuyers

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Consumer Financial Protection Bureau’s “Know Before You Owe” rule, which at press time was scheduled to be applied to all mortgage applications starting Oct. 3, 2015, requires mortgage lenders to provide a Closing Disclosure 3 business days before closing. The new document highlights the key features of the mortgage in a short, simple format, so borrowers don’t have to dig through a stack of papers for the details at closing.

The Closing Disclosure also must note last-minute changes to the loan terms, annual percentage rate or prepayment penalty. If any of those change, the borrower gets another 3 business days to review the offer and pose questions to the lender before going to closing.