Most buyers secure their new home with a mortgage. That means these new guidelines will apply to the majority of real estate transactions. I must admit I was a bit freaked out when I heard about these changes over a year ago, but having had some time to sit down and learn more about the changes I am feeling better about what is to come. The information is easier for home buyers to understand (the ultimate goal). Make sure you have a Realtor, Lender, and Title Company that know what to expect with a real estate transaction with these new guidelines. The key is the timing of your paperwork to get your loan secured and constant communiction. What do you need to know?
Let’s get some basics out there:
- In November 2013, the Consumer Financial Protection Bureau (CFPB) integrated the Real Estate Settlement Procedures Act (RESPA) and Truth in Lending Act (TILA) disclosures and regulations. Any transaction involving a mortgage will use new CFPB disclosure forms. The new TRID forms were implemented on October 3, 2015.
- The first new form (the Loan Estimate) is designed to provide disclosures that will be helpful to consumers in understanding the key features, costs, and risks of the mortgage loan for which they are applying. The Loan Estimate must be provided to consumers no later than three business days after loan application. Click here for an interactive guide to the new form.
- The second form (the Closing Disclosure) is designed to provide disclosures that will be helpful to consumers in understanding all of the costs of the transaction. The Closing Disclosure must be provided to consumers three business days before they close on the loan. Click here for information on the closing disclosure form.
- The forms use clear language and design to make it easier for consumers to locate key information, such as interest rate, monthly payments, and costs to close the loan. The forms also provide more information to help consumers decide whether they can afford the loan and to compare the cost of different loan offers, including the cost of the loans over time.
- The key in all of this is to work with a great lender (I know many) who is on top of all these changes and can minimize the amount of extra time to get your loan closed and you moving into your new home.
Have questions? Let me know. I’ve made sure to be on top of these changes and as always strive to keep things moving as easily and stress free as possible.