Know What Changed About Homebuying~TRID Is Here!

Know What Changed About Homebuying~TRID Is Here!

Major changes are in effect for home buyers purchasing homes and obtaining mortgages. Cash buyers, this is not for you. The new "Truth-in-Lending RESPA Integrated Disclosure" Rule ("TRID") went into effect October 3, 2015.

Due to these changes, mortgage companies will be more accountable for getting and giving information to the buyer. Those quick closings (30 days with 20 day commitments) are in the past. The lenders must follow many new rules, and new loan processing could take more time than it did in the past. Additionally, buyers should be advised that requested changes or underwriting decisions made late in the transaction could delay the closing.

The Realtors should be scheduling inspections, title work and walk through inspections earlier to accommodate any potential issues or buyer/seller credits. If the contract changes, that can delay the timeline as well.

Simultaneous closings will be a thing of the past. It will just complicate the situation due to both sides of two transactions having to fit into these guidelines.

When a buyer is using a lender, the lender prepares the buyer's side of the new Closing Disclosure. The buyer must receive this document three business days before the scheduled consummation of the transaction (before the buyer becomes obligated on the loan).

For purposes of providing the Closing Disclosure, a business day is any day except Sundays and federal holidays. Where the lender is either emailing or mailing the Closing Disclosure to the buyer, it must be done 7 days in advance of the closing to meet TRID's delivery requirements.

If the APR changes or a pre-payment penalty is added there is a 3 day waiting period added for a buyer to commit to the loan.

The learning curve may be steep, but all-in-all, many of these guidelines are to further protect mortgage borrowers.