October has brought the roll-out of a new initiative from the Consumer Finance Protection Board. Nicknamed the “Know before you owe” rule, it is designed to insure that consumers understand the terms of their home loans before they sign on the dotted line. If you’re considering purchasing a Portland home, you need to pay attention to these changes.

One of the biggest changes is that information on all charges, fees, and line items must be included along with the loan estimate at least three business days before closing. This should prevent unpleasant surprises at the closing table. Interest rate increases from an eighth of a percentage point, pre-payment penalties, or other fees that would increase the buyers costs requires new documentation and a new three-day waiting period. Decreases in fees or interest rates would not necessitate another three-day window. The new forms are also much easier to read and understand and do not use complicated terms or overlapping information.

This should make the understanding the loan process much easier for Portland home buyers. The only downside is that if you need to buy metro Portland real estate on a deadline, you will need to plan ahead and begin negotiations quickly. A local, experienced real estate agent can be a real asset to this process. Call our office to discuss how the new ruling might affect your house buying process. Be sure to visit the Know Before You Owe page on the CFPB website to learn more about these changes.