As of October 3, 2015, TRID (Truth-in-Lending Integrated Disclosure Act) is officially in place and changes the way mortgage loans are originated and closed. This is important to know when purchasing a home because all mortgage transactions are effected and the buying process is time-sensitive and has associated costs (moving, repairs, etc.)
The new forms have been combined. Borrowers used to receive two separate forms from their lender.The Good Faith Estimate (GFE) and the initial disclosure forms are now combined in a LOAN ESTIMATE form. This new three page form must be provided to you (the borrower) on a similar timetable to the original GFE form (approximately 3 days.)
Forms will look different from the past. If you have purchased a home before, your upfront disclosure forms and final closing forms will look different this time. The new forms have a more understandable format and mirror each other. That means that the disclosure you receive at the time of application (Loan Estimate) will look very similar to the final disclosure (Closing Disclosure).
Gather your documentation. You do not have to provide documentation to your Lender prior to issuing the Loan Estimate. However, it is good practice to start gathering the documents that you will need for application as soon as possible. It is advisable to get a head start on this because mortgages today require more documentation than at any other time in history.
Allow plenty of time. Closings may take up to a week or more than the previous average. A good rule is to plan for the closing 30-45 days from your contract date. You (the borrower) must receive and acknowledge the Closing Disclosure to trigger the mandatory 3-business day waiting period prior to closing. This is to give you ample time to review your total closing costs and not be rushed into the closing itself.It is also advisable to do a pre-closing walk through with your agent 8-9 days prior to the final walk through on closing day just to make sure there are no issues that arise that could be a surprise at closing.
Overall, these changes will be a positive for the industry. However, the process may be a bit slower for the first few months, as lenders and closing attorneys work through system changes.
Dagny’s Real Estate has been training all staff on these new regulations and is prepared to help you navigate these changes and work through to your closing date. If you have ANY questions regarding TRID or any other Real Estate matter please don’t hesitate to call us!