TRID mortgage changes for home buyers are profound and positive. It’s important for you to understand this.
WHAT IS TRID? A new way to process mortgages; as a Federal law it applies to all US home mortgages.
WHEN DID THIS HAPPEN? It went into effect for all mortgages applied for on October 3rd, 2015 or later.
WHY IS THIS DIFFERENT? New forms, process and time requirements.
- Forms – There are only 2, the Loan Estimate & Closing Disclosure, which are user friendly.
- Process – Streamlined and transparent now.
- Time Requirements – Must be sent with enough time to review them.
While buyers had mortgage documents before, they were difficult to understand. Furthermore buyers never saw closing documents until signing them at the closing.
TRID requires that the Loan Estimate is sent to you no later than 3 days after application. In addition, you must receive the Closing Disclosure no less than 3 days before closing. Both are now easy to read.
TRID allows waiting for the mortgage commitment to order title, survey etc. Before buyers were forced to do this right away to tie them to the purchase. Discuss this with your attorney because waiting might delay your closing.
Outrageous fees were charged to borrowers by horrible mortgage brokers who knew the buyer could not qualify for the loan. I can tell you this – I have always refused to sell a home to anyone who does not use a good, ethical bank. We will discuss shopping for a loan in another article.
A POTENTIAL CLOSING PROBLEM
A safeguard to protect you in buying a home can actually backfire and cause a last minute delay.
TRID requires an automatic 3 day delay in closing if there are any changes within 3 days of the scheduled closing. Changes are a rise in the rate of 1/8 pt. or more, a change in the type of loan or adding a pre-payment penalty. It can also be a credit to the buyer for a last minute problem such as a missing appliance, damage caused by movers etc. As a result, buyers will now do 2 walk through inspections to make sure everything is on track.
TRID mortgage changes for home buyers are wonderful because it protects them and makes the entire process much more transparent.