TRID coming October 3: What do I need to know as a buyer?

On October 3, 2015, TRID (Truth-in-Lending Integrated Disclosure Act) will be in place and will change the way mortgage loans are originated and closed. This new regulation affects all mortgage transactions, but is most important for those purchasing a home, as the buying process is time-sensitive and has costs associated with scheduling movers, repairs etc.

If you are planning on buying a home AND can submit your offer and start your mortgage application process before

October 3, then you will be “grandfathered in” and not be subject to the new regulations. In this case, regardless of when you close, you will close using the current forms and processes. If you’ve been sitting on the fence, this might be a little extra incentive to make an offer and start the process before October 3.

But what if you begin the process AFTER October 3?

Forms will be different. If you have purchased a home in the past, your upfront disclosure forms and final closing forms will look different this time. The new forms have a more understandable format and mirror each other. That means that the disclosure you receive at the time of application (Loan Estimate) will look the same as the final disclosure (Closing Disclosure).

Gather your documentation. Lenders cannot require you to provide documentation prior to issuing the Loan Estimate. However, it is good practice to start gathering the documents that you will need for application as soon as possible. Mortgages today require more documentation than at any time in history, so this is something you can get a head start on.

Allow plenty of time. As we begin operating under the new regulations, closings may take up to a week or more than the current average. A good rule is to plan for the closing 30-45 days from your contract date. TRID requires you, as the buyer, to receive and acknowledge the Closing Disclosure to trigger the mandatory 3-business day waiting period prior to closing. This is to give you ample time to review your total closing costs and not be rushed into the closing itself.

Overall, these changes will be a positive for the industry. However, the process may be a bit slower for the first few months, as lenders and closing attorneys work through system changes.

Allen Tate Mortgage has been training all staff on these new regulations and is prepared to help you navigate these changes and work through to your closing date.