Everything Homebuyers Need to Know and More About the TRID Changes

Did you know that on October 3rd, 2015, the closing process will significantly change for the first time in many years? The TILA-RESPA Integrated Disclosure (TRID) rules will go into effect on October 3rd, and drastically change the mortgage disclosure experience.

Here at PARKS, we want our homebuyers to be fully informed and aware of the changes taking place as these changes may affect your current home buying process.

Why The Change?

Some homeowners and home buying prospects might tell you that the mortgage disclosure and closing process is a bit complicated. The new changes, also known as the “Know Before You Own” rule, is being put into place to make the entire process easier to understand. The new documents and processes will streamline the experience and provide future homeowners with everything they need to know about the costs involved with closing on their new home.

Your PARKS agent is fully aware of the soon-to-be changes and will help you through the entire process.

Document Changes

For the past 30 years, the Good Faith Estimate (GFE) and the Truth in Lending (TIL) forms were used in the closing process. With the instituted changes, home buyers will receive a 3-page Loan Estimate form (LE) that outlines all loan information including the estimated cash to close.

In addition, a 5-page document known as the Closing Disclosure (CD) form will be used in

place of the HUD-1 Settlement Statement.

What do these document changes mean for you? Fewer forms to fill out and review! Previously, the documents piled up and became more of a hassle than a benefit. The document changes outlined in the TRID rules are put in place to assist in the entire process.

What Homebuyers Need to Know

The home buying process, specifically with regards to mortgage disclosures, will change once October 3rd rolls around. The top changes include the following “need to know” bits of information:

• The Lender is now responsible for preparing and delivering the Loan Estimate (LE) and Closing Disclosure (CD) forms to the consumer.
• The borrowers now have a 3-day holding period upon receiving the CD form to review and understand the costs involved, term, and more. The CD must be delivered at least 3 days prior to the scheduled closing date in order to align with the TRID changes. The CD form delivery is left up to the discretion of the lender.  Each lender will be able to decide how to deliver the CD either by mail, electronic or hand delivery.
• The CD form is confidential to the consumer, and unless otherwise agreed upon, will not be seen by the realtor prior to closing day.
• If changes to the Closing Disclosure form need to be made, this will require action from the Lender and also activate additional holding and review periods. Changes can include adjustments to the annual percentage rate, prepayment penalty additions, or other alterations to the document.

Tips and Recommendations for the TRID Changes

First, make sure you are 100% familiar with the new process and the home buying process in general. The PARKS team is here to walk you through the experience and explain areas you might not understand.

The National Association of Realtors (NAR) also suggests that Final Walk-Throughs be completed at least seven (7) days prior to the closing day. This action will avoid the occurrence of last minute delays, changes, or questions.

To cut down the amount of time necessary in the review period, it is recommended that you have the Closing Disclosure form hand delivered to you. With this in mind, remember that any changes you make to the document can push back the closing date and process.

All of the TRID changes are expected to add an average of 15 more days to the closing period. Be sure you are prepared for that time length of time and have everything prepared.

Ask Your PARKS Agent About the Upcoming Changes

Do you have any questions or concerns about the upcoming TRID changes? Your PARKS agent is there for everything you need throughout the buying process, which includes elaborating on the entire home buying procedure — step by step!

Should you have any concerns regarding the changes to the TRID rules, simply contact your PARKS agent and you’ll be on your way to a brand new home in no time!