The mortgage industry has seen substantial change over the past few years. The Consumer Financial Protection Bureau (CFPB) introduced new rules that amended existing requirements for mortgage disclosures. In an effort to keep our customers informed, we compiled a brief FAQ regarding the changes.
We will continue to share relevant information related to the implementation of these rules.
For a list of frequently used terms within the FAQ below, click here.
What is Know Before You Owe?
Know Before You Owe, also known as The TILA RESPA Integrated Disclosure (TRID) Rule, requires mortgage lenders and settlement agents to combine and simplify the disclosure forms used in the home
loan process. The goal of the rule is to make the loan process more streamlined, transparent, and easier to understand.
When did the rule go into effect?
The Integrated Disclosure Rule took effect on October 3, 2015.
Does the rule apply to all types of mortgages?
All of the loan options that Grand Home Loans provides will require that the new forms be used. However, not all loan options available within the industry will be required to use
the forms. Your Grand Home Loans Loan Officer can provide more information on the types of loans not covered under the rule.
What is a Loan Estimate?
The Loan Estimate combines and replaces the Good Faith Estimate (GFE) and initial Truth in Lending (TIL) disclosures. It is designed to provide disclosures that will be
helpful in understanding the key features, costs, and risks of the mortgage loan. Most of the information previously provided in the GFE and TIL are on the form, however
additional information not previously provided will now be featured in the form such as the estimated cash to close.
What are the key Loan Estimate dates I should know?
3-7-10 is the shorthand version of the key timeframes within which you must receive Loan Estimate documents.
- You must receive an initial Loan Estimate 3 business days after applying for a loan
- A final Loan Estimate must be issued 7 business days before closing on the loan
- You have 10 business days after receiving the Loan Estimate to decide whether to proceed with the loan
What is a Closing Disclosure?
The Closing Disclosure is the form that combines and replaces the Final TIL, Itemization of Amount Financed, and HUD Settlement Statement. The purpose of the Closing Disclosure
is to provide clarity in understanding all of the costs of the transaction.
When should I receive a Closing Disclosure?
A closing disclosure must be provided at least 3 business days before closing. Last minute changes may cause a delay in closing because some changes require an additional
3 business day waiting period before you can close (i.e. deciding to change the type of loan you would like to use for your home purchase). Your Grand Home Loans Loan Officer can
provide additional information regarding the changes that will trigger an additional waiting period.
IMPORTANT CUSTOMER RESPONSIBILITES
What do I need to do to make the loan process easier?
Communication is key! Be responsive to all communications from your loan officer and settlement agent. Make sure that you provide all documentation when requested, and keep your loan
officer informed of any changes that might affect your ability to qualify for the loan (i.e. opening additional credit lines, changing jobs, making large deposits in the bank, etc.).
Not finding your answers here? Contact Grand Home Loans to answer any additional questions you may have.