Here’s What You Need To Know…
Who could forget the nightmare of the foreclosure crisis? Borrowers didn’t understand the terms of their loans, many were blindsided by last minute changes in fees and rates at the closing table—essentially, home buyers were most upset about the lack of disclosure in the mortgage process.
Since then, the Consumer Financial Protection Bureau has been working on making the loan process more transparent than it had been leading up to this, and as of October 3, 2015, there are two new forms that have replaced the previous (four) more misleading and confusing ones.
Both the Loan Estimate and Closing Disclosure are intended to streamline the loan application process and make it easier for borrowers to understand their contract by clearly spelling out the most relevant details all on one page—including the interest rate of the mortgage loan, the amount of the monthly payments and a listing of all the closing costs. Even if you apply for an adjustable rate mortgage, your documents will explain how the interest rate and future monthly payments could change based on certain factors.
The good news is that the “Know Before You Owe” forms have built in many protections for borrowers. Although making that big step into your new home should be (financially) more clear and sound—Purchasers not paying cash could be waiting up to 45 days for their contract to close, along with other set-backs.
The NAR is recommending you have everything ready seven days prior to closing, so before you start house shopping, here are the things you need to know:
Rather than waiting until the day of the closing to see the final figures, Borrowers now receive the Closing Disclosure three days in advance. To prevent any unwanted closing delays, a good rule of thumb is to have all the paperwork in order a week before your scheduled closing date. When you go into the three-day period, you’ll want to avoid any unnecessary changes. Making changes as the clock winds down can come with a cumbersome set of hurdles.
So this means that you and your settlement providers, including your Lender and Agent are really under the gun to get everything squared away—more so than ever before. Buyers and Sellers have to be cooperative as well, because if last-minute negotiations are made, a new three-day waiting period kicks in.
With zero tolerance for error throughout most of the disclosures, it’s vital everyone is working with a Real Estate Broker and Lender who understands the multiple new systems that have been introduced with these forms.
For those of you thinking about buying or selling a home in 2016, there’s a lot to do, and now is the time to get started!
We invite you to connect with us at Red Team Real Estate. Our Realtors are skilled in handling all types of real estate, and our comprehensive knowledge concerning the latest laws and market trends, along with the ability to network with other Agents and Lenders will truly benefit you. Contact us today and find out how we enhance both the buying and selling experience for each and every Red Team client.
Red Team Real Estate and Property Management
Red Team Real Estate and Property Management was started in 2012 to focus on being the provider of quality service that has never been seen before in property management. Our approach is to serve our owners by providing professional, knowledgeable service with maximum value.