Changes to mortgage loan process

If you're looking to buy a home, you'll want to read this. Changes are coming to the mortgage loan process. If you apply for a mortgage on or after Saturday, October 3, 2015, you'll get completely different paperwork. (If you've already started the mortgage loan process, nothing will change for you.)

Right now when you apply for a loan, you get four disclosure documents. The government is cutting that down to two: a Loan Estimate that you receive upfront and a Closing Disclosure that you'll get three days before you close. It's all part of the Dodd-Frank Act, and an effort to make the mortgage process more transparent.

Holden Lewis, a mortgage analyst at says the new documents are easier to understand, and make it easier to compare different loan offers. They also make it easier to compare the loan you get at closing to the loan you were promised initially.

The third page in the Loan Estimate is the key, according to Lewis. It's called 'Comparisons' and lays out all the details of your loan: how much that mortgage will cost in the first five years, and how much principal you'll pay down in the first five years. That easy comparison sheet makes it easier to shop around, something Lewis advises.

He says everyone should apply for several mortgages at different institutions. Get a few different options, including 30 year and 15 year fixed mortgages, and ones that includes points or no points. (Points are fees paid directly to the lender, and are a form of pre-paid interest.)

It may take a little while for lenders to adjust to the changes, but they should help homebuyers in the long run.

The bottom line? These new forms really simplify things for homebuyers.

They also could increase competition by making it easier for homebuyers to compare their options, which chould make mortgages more affordable.