A new law forces lenders to loosen up and reveal how much that mortgage of yours will REALLY cost you in the long run ... But it might fall a little short.
The law's called the Housing and Economic Recovery Act. It requires mortgage lenders to disclose your MAXIMUM MONTHLY PAYMENT based on your loan's MAXIMUM INTEREST RATE, that is, if it's an adjustable-rate mortgage.
ARM's are what have been getting a lot of folks in trouble with foreclosures. Borrowers are failing to read the terms of loans that allow significant leaps in interest rates after a few months.
But here's the rub of the law. It requires the lender to reveal the maximum monthly payment and interest rate no later than 7 DAYS BEFORE CLOSING. Most home-buyers won't bring the buying process to a screeching halt a week before they close.
Also, the law doesn't require lenders to reveal "junk fees" that add big bucks to the closing costs.
Best advice: INSIST ON A COMPLETE LIST OF CLOSING COSTS UP FRONT BEFORE SIGNING THE LOAN.
Source: The Washington Post