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New Federal Laws Impact Buying a Home (TRID)

As of October 3rd, there are new regulations in place that impact new loans and the process involved in buying a home.  Prior to this, buyers received  a Good Faith Estimate (GFE) when applying for a loan and a Settlement Statement (HUD-1) prior to closing to show what the final costs  in the transaction would be.  These are replaced with the Loan Estimate (LE) and the Closing Disclosure (CD), respectively.

So what has changed?  The LE must be delivered to the buyer 3 days after applying for a mortgage.  Also, the figures provided by the lender are more precise than they were with the GFE.  You’ll see what your monthly mortgage payment will be and how much money you need to bring to closing.   This will help you know what you will owe and whether or not you can afford a home.

With the CD, you will receive this 3 days prior to closing (not 15 minutes prior as has happened in the past).  The LE and CD are in the same format so it is easy for you to compare them and identify any changes.  If the lender gets a figure wrong or an amount owed on the CD is higher than the LE, the buyer may be due a refund.   Be mindful, if any changes occur that impact the loan (job changes), a new CD has to be drawn up and an additional 3 days added before you can close.

To help the process go smoothly, you’ll want to work closely with your REALTOR and with your lender to make sure that there are no issues that could prolong the process or end the deal altogether.


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