What’s New With Mortgages?
Effective October 3, 2015 there is a new law going into effect that will greatly impact not only the real estate industry, but also the mortgage industry. And right along with it, the home buyer.
It is the most significant overhaul to the way lending for home loans is done in the past 30 years. This new approach hopefully will prevent predatory lending while ensuring that buyers truly understand what they are getting themselves into.
Known as the TILA-RESPA Integrated Disclosures (or TRID for short), this new law integrates a three-day waiting period to the loan approval process. This will also be included into the closing timeline for a home purchase. Any time anything changes to the terms of the loan, such as APR or closing papers that are being delivered, a three-day waiting period begins. If there are any last-minute concessions, addendums, or lender errors, these could delay the closing by 72 hours.
This new change will make it even more important for a home buyer to get pre-approved for a home loan before they start looking for a home. An approval letter showing that a buyer is qualified for a purchase of a home will not be issued until three days after the initial loan application. There is a timeline that lenders must follow as to when they are allowed to ask for supporting documents such as income, assets, and bank statements.
All of these changes were made with the intent of making the borrower more informed about their loan and to protect their rights as consumers. It should also make it easier for the consumer to compare loans offered by lenders and make better decisions for the purchase of their new home.