You’ve done the fun part; perusing open houses, late nights swiping across house after house on your tablet screen, and frantic texts that read “is this the one??” Until finally, you’ve found the perfect home. Now, the only thing left is to fund it.
If your perfect house moment occurred after October 3rd, there are a few things you need to know: namely, the new TRID guidelines. TRID, or TILA / RESPA Integrated Disclosure Rule, are a new set of government regulations designed for consumer protection. So if you’re wondering if TRID affects you, the answer is that TRID is all about you! Also known as “Know before you Owe,” TRID was implemented to make sure you, the buyer, know exactly what you’re signing on your closing documents, before closing. More specifically, at least three days before closing.
Under these new guidelines, your lender is required to provide you with two sets of disclosure forms for your loan. One is the Good Faith Estimate, and if you’ve purchased a house before you’ll be familiar with this document. The second is the Closing Disclosure Form—the catch is that this form must be presented to you a minimum of 72 hours before your closing. Prior to the TRID regulations, it was likely you’d be scanning over new information for the first time just before, or even at, your closing. Secondly, the Closing Disclosure form will look nearly identical to the information provided in the Good Faith Estimate in order to help eliminate any confusion to you.
But what’s the big deal, why 72 hours? Because that three-day review period gives you time to understand the details of your loan, ask questions, and also see a complete breakdown of the fees associated with your loan, as well as who is responsible for the fees (you, the seller, or a third party.)
HOME Real Estate agent Kathy Dixon tells buyers that having all their documents together can make this process easier.
“I would tell my buyers that they need to get all their personal paperwork in order prior to purchasing, in order to get a good loan preapproval,” Dixon said. “Then, I would have them shop for insurance quotes early. All of this prior to finalizing an offer. Pre-planning will save lots of delays at the end.”
Mary Stull, a HOME agent, agrees. “Lenders now have restrictions on asking the buyer for certain documentation at certain times during the application process, so I as [the buyer’s] agent will have a list of documentation that I will provide to them early on to help them gather what they need for the lender,” Stull said. “I think this will streamline the new TRID process.”
HOME agent Kimberlee Johnson had more tips for home buyers. “It is good to use a lender and title company that has kept up on [regulations], and sales will go as smooth as possible.” She added, “Always remember: no big purchases or accounts should be open after the loan process has begun without going through your lender first to be sure it will not nullify your loan.”
Since the guidelines are government regulated, there are penalties to the loan officer if the disclosures are not presented properly. Also, some errors have the potential to delay your closing.
Ann Underwood of the Underwood Team at HOME Real Estate advises open communication. “Because of the new changes in the lending industry, it is absolutely imperative that you always give your lender an immediate response to any inquiry or request they give you.”
So it’s more important than ever to communicate openly with your lender and real estate agent, and if you’re ever unsure, ask questions. Realtors have multiple resources available to them, including courses and self-guided education, making them an excellent sounding board for your TRID questions.
If all of this sounds great, but you’re not quite head over heels for a home yet; keep up the late-night swiping. But most importantly, keep talking! Ask questions before, during, and after your three-day review period. Use your real estate agent as the valuable resource that they are, and, of course, don’t stop until you find that perfect home.