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Know Before You Owe: Help Us Make Your Mortgage Forms Better

Let’s say you want to buy a home or refinance your mortgage.

You might be in the market to buy today, or you might be planning to do so down the road. You think about the neighborhoods you might like, the features you want, and what it will be like when you get the keys and take your first step through the front door.

For most Americans, this means taking out a loan. A mortgage loan is the biggest financial commitment most Americans will make in their lifetimes. With something so important, you ought to be able to get up-front, easy-to-understand information that lets you compare different loan offers and find the one that’s best for you. But if you’ve actually applied for a mortgage recently, what you probably remember most are lots of technical terms and long lists of fees.

We want to help fix that, and we’d like to have your help. Today, we’re announcing the Know Before You Owe projectsign up now, and we’ll tell you when it launches. Know Before You Owe is an effort to combine the Truth in Lending disclosure and the Good Faith Estimate into a single, simpler form.

Wait – the what?

If you’ve ever applied for a mortgage loan, you’ve received two forms required by federal law: A two-page Truth in Lending form and a three-page Good Faith Estimate. They are meant to give you the basic facts about home loans that you apply for and to help you pick the mortgage product that’s best for you. But these forms have overlapping information and complicated terms and are just plain difficult to understand.

These disclosures don’t work if they give you too much information or if the information they provide isn’t what you need. They don’t work if they drown you in detail or leave out crucial information, like warnings about hidden risks. Can the cost of your loan go up? When, and why? Complicated disclosures can make it hard to answer or even ask the right questions, and many consumers don’t know what to ask until it’s too late.

Over the coming months, we will design and test new draft disclosure forms and seek one-on-one input from consumers, lenders, and brokers as we refine the forms. But this disclosure affects everyone. That’s why we will also put them online, while they’re still in the design phase, and ask you to weigh in. We will deliver your input to our testers and designers and factor it into our design process.

Sign up now, and we’ll email you when it’s time to have your say.

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