Can you imagine the home buying process actually getting simpler? Well, it did. Beginning October 3, 2015, the Consumer Financial Protection Bureau (CFPB) is making the required mortgage disclosures process simpler. Now when you apply for a mortgage loan there are fewer forms to read. Easier forms to understand. And less information to deal with.
Easier Loan Estimate Form
So, exactly what’s so new? It starts with the Loan Estimate Form. It clearly outlines and shows an initial estimate of your loan terms, including loan amount, interest rate and monthly payments. It also shows your projected monthly payments, including taxes and insurance. And your projected final closing costs.
Timing is also an important part of the new process. It’s the mortgage lender’s responsibility to make sure you get the Loan Estimate quickly – three business days after you apply for the loan. To keep things moving, once you have your estimate, it then becomes your responsibility to decide within ten business days if you want to proceed with the loan. If you like what you see, the loan approval process can begin.
By law, there’s a minimum seven day waiting period after you receive your initial estimate before you can close. However, the actual time until closing will depend on how quickly you provide required documents and other factors.
Simplified Closing Disclosure Form
Once you’re approved for the loan, the lender will send you a Closing Disclosure form. It’s similar to the Loan Estimate Form and just as easy to read. Except it has your final loan terms, and includes an itemized list of all the buyer, seller and third-party costs associated with the loan. It’s the lender’s responsibility to make sure you receive your Closing Disclosures at least three business days before the closing date.
Why This Matters
Whether you’re the buyer, seller or real estate agent, these changes can have a big impact on the closing, especially whether your closing stays on schedule. Last minute negotiations and changes could cause a delay to the closing – especially if seller and buyer transactions are dependent on each other.
It’s more important than ever that you choose the right lender for your mortgage. At PrimeLending, we’ve spent months preparing for these changes, and we’re ready. We have proactive loan officers you can trust and streamlined processes to keep closings on schedule – even with the new regulations. Fewer forms, predictable time frames, and an updated process, you can count on PrimeLending to makes things simple every step of the way.
From the PrimeLending blog, written by Mandy Jordan