Changes to mortgage process
As of Oct. 3, those applying for a mortgage will notice some significant changes.
The changes are part of TRID (TILA RESPA Integrated Disclosures). The goal is to provide homebuyers with more concise, easy-to-read information and more time to review the details and cost of their mortgage.
Area realtors and lenders agree the changes are good for homebuyers and should result in smoother closings. However, some lenders are warning that 30-day closings will be tough and are advising clients to expect 45 or 60 days to close on a home after an accepted offer.
Alex Leykin, CEO of A+ Mortgage, was be a special guest on the CBS 58 News at 4:30 p.m. to discuss exactly what's going on.
Lending institutions are now required to provide buyers with a Loan Estimate at least 7 days before closing. This gives consumers time to review all the loan details prior to closing. The new, 3-page Loan Estimate (replaces the initial Truth-in-Lending disclosure and Good Faith Estimate) clearly details: loan amount; interest rate; monthly interest and principal; and Projected Payments Years 1-7 and Years 8-30 so 30-year mortgage borrowers can see the decrease once Private Mortgage Insurance is removed. The document also provides Estimated Cash to Close (new addition) and details which services homebuyers can shop for themselves, such as inspections and title elements (new addition).
The new, 5-page Closing Disclosure (replaces the final Truth-in-Lending disclosure and HUD-1 Settlement Statement) must be provided 3 business days before closing. In addition to the loan details covered on the Loan Estimate, the Closing Disclosure details the exact, final amount borrowers will need at closing. (In the past, many borrowers would not get information until closing so they’d bring a blank check with them.)
The final section of the Closing Disclosure provides contact information for: the Lender or Mortgage Broker; the Realtors who represent the seller and buyer; and Settlement agent.