New mortgage forms could save you $700

All mortgage lenders now must give prospective borrowers a new, streamlined federal form known as a "good-faith estimate" to help them shop around for loans and cut closing costs. The Department of Housing and Urban Development estimates the three-page form will save consumers nearly $700, on average, at closing.

"In the past, there was no way for borrowers to compare apples with apples," says Ilyce Glink, author of the forthcoming book Buy, Close, Move In! "This is a big step in the right direction."

Some charges are guaranteed not to increase at closing, such as the lender's origination fee and any points you'd pay after locking in your interest rate. If you use firms selected by the lender for services such as title insurance, those firms' fees can't increase by more than 10%.

You'll be better able to comparison-shop for closing costs by using the more accurate itemized estimates. The new form also has a "trade-off table" showing how you can reduce your monthly payments by paying higher closing costs or lower your closing costs by accepting a higher mortgage rate.