Significant new mortgage rules just went into effect on October 3rd, as part of the regulations created by the Consumer Financial Protection Bureau in 2013. These regulations are designed to provide new homeowners increased loan transparency as well as more protection against reckless lending standards and other lender abuses.
Homebuyers will know up front all of the details of their loans and be given three full days to review their closing settlement sheet. Last minute changes at the time of signing the closing statements will no longer be allowed and this could impact buyers and sellers who aren’t prepared, as any significant changes require a new three-day window for review. Having an experienced Realtor is going to be more critical than ever in terms of closing on time as they will need to insure that the lender and closing attorney have everything they need well in advance. Communication between all parties, Realtor, Lender, Closing Attorney, Buyer, and Seller, will be required to avoid changes to the closing date and to minimize stress.
New Forms Benefit Buyers & Sellers
Two completely new forms, the Loan Estimate and Closing Disclosure forms, replace four previous forms that many homeowners found difficult to understand. These new forms are standardized, which will make it easier to compare rates and fees when shopping for a mortgage.
New: Your Home Loan Toolkit
The Consumer Financial Protection Bureau has prepared Your Home Loan Toolkit, which guides you through the financial aspects of the home buying process. Read and download the new Home Loan Toolkit here.
Section One will help you choose the best mortgage for your needs. It covers home costs, interest rates, points, mortgage types, down payments, prepayments, and some of the risks involved.
Section Two covers the closing, including closing services, title insurance, home inspections and appraisals, and the loan estimate and revision process. The Closing Disclosure document is discussed in some detail so that you will have a true understanding of the financial aspects of your mortgage and home purchase.
Section Three covers ownership of your home and ways to protect that home.
If you are considering buying or selling a home soon, give us a call at 919-659-5173 or send us a message online. My partner Andrew Palumbo and I both have extensive real estate and construction experience.
Posted by Larry Tollen on
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