The new “Know Before You Owe” or (Tila Respa Integrated Disclosure) rule by way of the Consumer Financial Protection Bureau (CFPB) has begun on October 3, 2015.
The new mortgage disclosure rule replaces four disclosure forms with two new policies, the Loan Estimate and the Closing Disclosure. Though the rule doesn’t only bring the introduction of these two new forms, TRID will also change the way that real estate transactions are processed and closed.
As a homeowner, it’s best to know what’s needed of you so that your side of the process can be expedited as much as possible. Not to mention that the new forms are easier to comprehend. The TRID rule also requires that you get three business days to review your Closing Disclosure and ask any questions you may have before closing on the mortgage.
Here’s how to navigate the mortgage process on a fast-track with the new “Know Before You Owe” rules:
Expect New Forms
After you’ve signed on for your first mortgage, with the new policy, there will be a couple of documents immediately sent your way for your needs. Know what’s headed your way so you have a mental inventory if you don’t receive any of the listed documents below.
- You will receive the Loan Estimate (LE) no later than three business days after an initial application.
- You will receive the Closing Disclosure (CD) at least three business days before closing.
- The Loan Estimate and Closing Disclosure outline the consumer’s monthly payment, the costs of getting a mortgage, the costs to close and other important information about the loan.
Know the New Timelines
Knowing this calendar of dates can help you stay on track on deliverables needed when it comes to your new mortgage. The new rule requires that you be given or mailed:
- A Loan Estimate (LE) within three business days after you apply. You’ll need to provide six items of basic information — name, income, social security number, address of the property for the loan, estimated value and the mortgage loan amount sought;
- A Closing Disclosure (CD) at least three business days prior to closing so you have time to review the document.
- If you or your lender make certain changes to the APR or loan product after you receive the CD, an additional three business days will be assessed to review the CD.
- Allow atleast seven business days to review the paperwork between the time you receive a loan estimate and the time you close.
Help Speed Up the Process
You are allowed ten business days to decide with your lender about your choice of loan. Here are a couple things you can do to speed up the final leg of the process once you’ve chosen one:
- Get any documents needed into your lender’s hands to be processed as soon as possible.
- Thoroughly assess the loan estimate so that you can raise any questions or concerns early on.
- Work closely with your real estate agent and the corresponding agent to conduct home inspections, order reports (e.g., pest inspection), early in the process.
- Notify your lender of any changes to the transaction that you think may impact the closing or the loan.
The new disclosure process adds two new documents under the new “Know Before You Owe” rule. But staying keen to the above points and working closely with your real estate agent, could ensure a speedy mortgage process.