Smart Mortgage Moves

What are these new “Know Before You Owe” rules I’ve been hearing about?

They’re a victory for borrowers that make it “much easier to decipher exactly what you’ll be paying,” says Tom Pilafas, a vice president of the Chicago-based title industry company Near North National Title. Late last year, Congress passed a law requiring each potential lender to give you a three-page loan estimate—including details on rates, fees, and closing costs—in a format that’s easy to compare with competitors’ estimates. Your lender must also give you a disclosure sheet at least three days before your scheduled closing that spells out exactly what your final costs will be (no more closing-table surprises!). To make the most of the new rules, use the information from the loan estimates as ammo to negotiate a better deal. And always compare the disclosure sheet with your estimate to make sure they match.

 I need a jumbo loan. Any tips?

Yes: Celebrate. It used to be that interest rates on jumbos (currently defined as loans of more than $417,000) were about half a point heftier than on nonjumbos (or “conforming loans,” in broker-speak). But competition among banks for high-end borrowers has shaved down that difference. The average 30-year fixed jumbo now goes for 3.80 percent, even less than the going rate for the conforming version. The required down payment for the best rate has also come down, with some lenders offering loans without private mortgage insurance for borrowers putting down as little as 15 percent. Eliminating PMI could save you thousands of dollars over the life of the loan.