Attention All Future BUYERS: TRID or Know Before You Owe rule

201509_cfpb_kbyo_new-mortgage-disclosures-new-rule

Attention all future BUYERS!

As of October 3rd, 2015 TRID (also referred to as the Know Before You Owe rule) has been implemented to help borrowers understand the terms of their home financing transaction and have all the information they need to make informed mortgage choices.

 

What is TRID?

What does TRID stand for?  TRID is the TILA / RESPA Integrated Disclosure Rule.  Only in the mortgage world would we make an acronym out of acronyms… so let’s break this down a little further.  TILA is the Truth in Lending Act and RESPA is the Real Estate Settlement Procedures Act.  The CFPB modified both rules in its TRID final ruling.

This new rule primarily does two things:

  1. It simplifies and consolidates some of the required loan disclosures, and
  2. It changes the timing of some activities in the mortgage process.

So what can you expect now that this rule is in effect?

First, you will see consumer disclosures that are very easy to read. The Loan Estimate forms will clearly set forth the terms of the proposed transaction to help the borrower determine whether they would like to proceed with the transaction.

Next, consumers will be given their Closing Disclosure early. Before closing on a home purchase or refinance, consumers must receive a copy of their Closing Disclosure at least 3 business days prior to closing so if they have questions, their Loan Originator can provide them with additional information. The format of the Closing Disclosure will also mirror the Loan Estimate to make comparison easy.

What does this mean for buyers?

Due to these new requirements and timelines, it is important for borrowers to work diligently with their lenders. All documents requested should be submitted in a timely fashion and the borrowers lender and agent should be in close communication regarding any price changes, credits, or appraisal issues. It is always recommended to get pre-approved and to choose your lender prior to starting your home purchase process, however now with the new Know Before You Owe rule, it is that much more essential.

Click HERE for a copy of a step-by-step brochure provided by the Consumer Financial Protection Bureau.

And of course, feel free to contact us with any questions you may have in starting your home buying or selling process.

Email us at: info@weberaccetta.com or Call: 310-387-4693

 

 

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