For the last year and half, TRID has become a buzzword for the mortgage industry as lenders work diligently to prepare for its implementation and the changes it brings to the home loan process later this year. But how will it affect you?
Securing a mortgage for your dream home can be a complex process. Many documents and forms are required to ensure your understanding of the mortgage process. These documents also serve as a way to help lenders verify your ability to repay the home loan.
Currently under the Real Estate Settlement Procedures (RESPA) and Truth-in-Lending Act (TILA), lenders are required to provide multiple forms to borrowers at several different times during the home loan process. While these forms are aimed at informing borrowers of the fees, costs and terms associated with their mortgage, it often comes across as confusing for the client. The information on the forms overlap and the language is inconsistent.
Cue in TRID. The Consumer Financial Protection Bureau’s (CFPB) new TRID (TILA-RESPA Integrated Disclosures) rule is designed to make this information more transparent. The change is part of the Dodd-Frank Act and is aimed at improving consumer understanding of the mortgage process so you can make more informed financial decisions. The implementation of the rule was slated to begin August 1, but the CFPB has proposed a later date of October 1.
TRID combines the Good Faith Estimate (GFE) and initial Truth-in-Lending disclosure into the Loan Estimate form. The document must be provided to borrowers within three business days after submission of the loan application and match up with the Closing Disclosure form. The Loan Estimate includes pertinent information such as your loan terms, amount, payments and rate.
The new rule will also replace and combine the HUD-1 and final Truth-in-Lending disclosures into the new Closing Disclosure. Lenders must provide you the Closing Disclosure three business days before closing on your loan. By receiving the Closing Disclosure earlier, borrowers will have plenty of time to review their home loan terms, confirm accuracy and make any adjustments if necessary.
The additional time provided to confirm the details of your home loan with an educated, prepared mortgage professional allows for an even more thorough mortgage process. However, if any changes are made to the closing documents, you will receive a revised Closing Disclosure effectively restarting the three day post close window.
To ensure the mortgage process goes smoothly, Castle & Cooke Mortgage loan officers recommend sending in your financial information as soon as possible. Click here to see what documents you need.
At Castle & Cooke Mortgage, we understand the home financing process can be intimidating, but it doesn’t have to be. Our company is TRID ready. We’ve updated our business process and systems and are ready to launch the new forms. Additionally, we’ve provided company-wide training to further educate and fully prepare staff.
Castle & Cooke Mortgage is committed to simplifying the mortgage process and providing you with the most efficient and fastest service in the industry. Take the first step toward owning your dream home. Get pre-qualified for a loan today.