Real Estate and TRID Here’s What You Need To Know
On October 3, 2015, some big and at first some possibly confusing changes are coming to the real estate industry. So if you are in the market to buy or sell a FishHawk Ranch home or any home for that matter here is what you need to know! These new changes will affect homebuyers, sellers, real estate agents, mortgage professionals and title companies. So what is it? It’s called TRID.
What is TRID?
TRID stands for the TILA-RESPA Integrated Disclosure Rule. Its goal is to make mortgage and home buying costs more transparent and easier to understand for consumers. In the past, I have been very critical of the GFE (Good Faith Estimate) and the HUD-1. I always felt these were too confusing for the consumer. So confusing in fact, there were times that I had a hard time explaining the fees to a client. In my opinion, the new forms are really good and do a nice job breaking down and clarifying all the costs on the mortgage and associated with buying a home.
Introduction to the New Forms
The borrower or homebuyer will be receiving the new disclosure forms from their lender. The new forms are:
- The Loan Estimate – This form combines and replaces the Good Faith Estimate and the Truth-in-Lending Disclosure into a shorter form that is much easier to understand. It explains the loan’s key features, terms, costs, and risks at the beginning of the mortgage process. Here is a sample of the Loan Estimate Form.
- The Closing Disclosure – This form combines the final Truth-In-Lending statement and the HUD-1 settlement statement into a shorter, much more understandable form that should really help both the mortgage professional and real estate agent explain all the costs and fees to the consumer. Here is a sample of the Closing Disclosure Form.
Other Important Changes
- Borrowers will have three days after receipt of the Closing Disclosure to review the form and its contents. Please note that the three day review period starts upon “receipt” of the Closing Disclosure form by the borrower. Unless there is some sort of receipt confirmation of the form, the form is “deemed received” three days after the form is mailed. As a result, the review period can actually be six business days from mailing to loan signing.
- Any changes to the Closing Disclosure after delivery to the buyer may trigger a new 3-day waiting period. There may also be changes that will require additional disclosure or review periods. Items that may affect these include:
- Changes that affect the Annual Percentage Rate (APR)
- The borrower changes loan products
- A prepayment penalty is added to the mortgage
- Any changes and adjustments that affect the value of the property as determined by the lender
- The National Association of Realtors (NAR) is recommending adding 15 days to our normal closing time frame. In the FishHawk Ranch area most offers that need financing are written up with a 30-day closing date from the accepted offer. NAR is now recommending that we write that same offer with a 45 time period to close as this new process will take longer.
There are two main things that you should take away from this article. The first is that there may be delays in closing so be prepared it. The second is to get familiar with the new forms. Most of the other changes will happen behind the scenes.
I do feel that these changes will be good for the consumer. There are going to be a few bumps in the road when TRID is first implemented. I think that once everyone is used to the new changes we will probably get back to the 30-day closings we have gotten used to.
Please feel free to comment and let me know if you have any questions or specific concerns.
Real Estate Information
- Real Estate Buyers Guide
- Estimate Your Closing Costs When You Sell Your Home
- Find Out How Much Your Home Is Worth
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About the author
Jeff is a top selling, nationally recognized Florida REALTOR® and local FishHawk Ranch real estate expert. You will find him selling homes in the Tampa Bay, Florida and surrounding areas. Some of those areas include FishHawk, Lithia, Riverview, Valrico, Apollo Beach, Brandon, and Tampa.
If you are looking to sell or buy a Tampa Bay area home, Jeff is your local and trusted professional. He can be reached via phone/text at (813) 421-3007 or by email at Jeff@FishHawkRanchRealEstate.net.
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