Explanation of New Rules and Loan Estimate Form

Buying a home can sometimes feel a bit stressful.  The paperwork alone can be a little overwhelming at times.  As of August 1st, 2015, the Consumer Financial Protection Bureau will have new rules and new forms for the home loan process.  Since these changes will increase the amount of time it takes to close your loan, this post offers an explanation of the new rules and Loan Estimate form to give you a better understanding of what is involved.

Lenders are required by law to provide Buyers with several forms from different agencies during the loan process to help explain costs to the consumer.  This could be confusing to the consumer because they appear to be very similar to one another yet they provide very different information.  Under the Dodd-Frank Act, the Consumer Financial Protection Bureau was created to help simplify the new forms, making it easier for consumers to understand the forms they are signing.  This helps reduce the chances for "surprises" when it comes to the financial aspects of a home purchase.

Gone are the Good Faith Estimate, TILA-1 and TILA-2 forms and the Settlement Statement.  In their places are the Loan Estimate and Closing Disclosure forms.  These include new timeline requirements for delivery of forms and length of time that the Buyer gets to review them.

With the new Loan Estimate form, creditors cannot change the information after the initial figures are determined.  The creditor has three days to deliver a Loan Estimate after they receive the creditor's application.  The Loan Estimate should also include a list of providers for the creditor's convenience.  This could then be used by the Buyer to shop around for title insurance, credit life insurance, home warranties, etc.

The implementation of these changes may increase the amount of time it takes to close.  For more information about the new rules and Loan Estimate form, please feel free to contact me.  I'll be happy to to over these new rules with you so that you have a better understanding of what to expect.  If you have a question I can't answer right away, I will be more than happy to find the answer for you.

Charlene Hamilton, Your Reno Real Estate Specialist

Originally posted on my Reno real estate blog here: http://charlenehamiltonrealestate.com/buyer-tips/explanation-of-new-rules-and-loan-estimate-form.