Avoid TRID delays!!
On October 3rd, 2015 the process of obtaining financing and closing on a home changed. What's the most important things that you need to know so you don't delay your closing? Or risk losing out on a house?
Pre-Qualification
The new Purchase Contract requires that all buyers using financing include a pre-qualification form with their offer. It is even more important than ever to contact a lender and get the pre-qualification process started prior to looking at homes. You can't submit an offer without it. Make sure to choose a lender that is set up for the changes.
While your lender cannot require it, it's best to try to get as much of the financing process completed as possible upfront, so request that your lender review your documents supporting your income, assets, employment, etc. It could save you the money of an appraisal and home inspection down the line. Better yet, get pre-approved, you can still be pre-approved under the new TRID guidelines.
New Application Process--PENCIL
While your lender can review your information and issue a pre-qualification form or a pre-approval, they cannot collect a formal application from you until the have the following items:
Property Address
Estimated Value of Property
Name of Consumer (Buyer)
Consumer Social Security Number
Income
Loan Amount
As you can see these items create the acronym PENCIL. Once those 6 items are in place the application date starts and your lender must adhere to the TRID timelines. So until you find a property and have an accepted offer, you cannot officially start the application process.
Loan Estimate
Why is the application date important? Your lender is now required to deliver a Loan Estimate (replacing the Good Faith Estimate and TIL) within 3 business days of the application date. You can shop around and get multiple Loan Estimates. After you have reviewed the Loan Estimate you must provide your lender with your Intent to Proceed. You can only proceed with one lender.
Closing Disclosure
Your lender must provide you with a Closing Disclosure (replaces the HUD-1 Settlement Statement) 3 business days prior to the consummation date. You can then review the numbers, ask any questions and request any corrections. If you are ready to proceed you can sign the closing documents at the title company after the 3 days waiting period is complete.
Temporary Longer Closing Period
Buyer and sellers need to be aware that some lenders are suggesting to add a little padding to the close of escrow as everyone get used to the new changes. Lenders are recommending 40 to 45 day closes for the first few months. Sellers need to realize they may have to be flexible with closing dates for the next few months.
