Understanding the New TRID Mortgage Guidelines

This year one of the biggest “buzz words” Realtors have been talking about is TRID, or the Truth in Lending Act.

Effective as of October 3rd 2015, the Truth in Lending Act and RESPA disclosures means that consumers will know more about the fees that they will have to pay when buying a home since the terms of their financing will be clearly broken down in a manner that all consumers will be able to understand, essentially eliminating homebuyer sticker shock before buying a home.

Breaking down TRID

Thanks to TRID, consumers can expect the following changes during the process of buying a home:

• The loan estimate will be mailed to the consumer within three business days after the lender receives their application.
• All lenders are now required to keep loan estimates for at least three years after they receive the loan consummation and closing disclosure.
• Loan estimates now must be rounded to the nearest dollar.
• Under the HUD-1 settlement document, consumers will have a complete breakdown of all costs including: costs the borrower did shop for, did not shop for, origination charges, and loan costs.

With simpler loan documentation and clear language when it comes to loan fees and or terms, consumers can forget having a surprise about what their home buying costs when they come to the closing table.

TRID could also extend the timeframe that it takes to buy a home, unless a buyer pays cash because of the documentation that lenders will be required to submit to buyers, but once lenders get up to speed with TRID it still shouldn’t take more than 45 days between the submission of an application and closing.

Do This before Applying For a Mortgage Loan

Since there are new waiting period rules with TRID it’s important for every consumer to make sure that they submit their income verification and all required documents to their lender on time because failure to submit one or more required documents may push back the time frame that it takes a consumer to buy a home even longer.

Learn More about TRID

To learn more about TRID and how it affects you, or to view Southern California homes for sale, contact Fred Sed Realty today by calling us at (800) 322-4643.