Ok, so most of us know that as of January 1st, the old way of getting a loan has changed. But what does this mean to all of us who work in the Real Estate business or for the buyers and sellers? One change is that we no longer can get a Good Faith Estimate until there is an actual property and loan amount. We must realize that when buyer's hear the words Good Faith Estimate, that will be further along in the loan process so they should be able to ask the lender for an estimate of charges or worksheet upfront, but until an offer is accepted they will not get a Good Faith Estimate. Buyers must complete all of their loan research before writing an offer, otherwise if they switch lenders the entire process must start again and may delay order of the appraisals and closing dates.
One aspect that protects the buyer is that the origination charges (which are now all loan charges) must be honored so the only numbers that can change are those tied to the interest rate (if not already locked). Also all other settlement services must be accurate since the amounts can't change very much. Most likely the numbers will be overinflated. This will probably cause concern to the buyers who may think they need to bring more money to the closing table, but communication is key here so that they understand what the numbers mean. Also, buyer's should be aware that only principal and interest are calculated on the Good Faith Estimate, they will need to add in taxes and insurance to get the correct amount of their monthly payment. Seller's contributions are also not on the Good Faith Estimate so they will need to subtract any amount that the seller is paying for them to get an accurate amount of money they will need to bring to closing.
There are a lot of changes with loans, but as long as Realtors, Buyer's, Seller's, Title Companies and Loan Officers all communicate then it will make the process go much smoother and hopefully be able to celebrate a successful closing at the end.
For the new RESPA Rules visit:
Comments(0)