January 1st brought us more than just a new year in the real estate world. It also ushered in a new set of rules and a new mortgage form that lenders must use. The idea behind the change is to make borrowing for a mortgage easier for the borrower to understand.

This change comes from the Department of Housing and Urban Development (HUD). The form is called the “Good Faith Estimate” form. The form has specific lines that cover all settlement fees, lists loan amount, term length, monthly payment, interest rates and details about prepayment penalties or balloon payments. All mortgage lenders must use the new form.

Those looking to buy a home in 2010 will get to use this new form to compare loans from multiple lenders. The hope is that borrowers will be able to make a more informed decision about their mortgage loan and that they will be better able to choose the loan that is really the best choice.

Only time will tell if the new form will actually make the mortgage lending process easier on home buyers or not. For now, many in the industry have said that it is a good idea and are looking forward to seeing just how well it works.