At the beginning of October, the mortgage industry saw one of the biggest changes to closing paperwork become a reality. On October 3rd, the new TILA-RESPA Integrated Disclosures (TRID) became required for all loans.
These TRID disclosures combined four forms into two that are easier for borrowers to understand. The two new forms are the LOAN ESTIMATE and the CLOSING DISCLOSURE.
The Loan Estimate replaces the Truth-in-Lending (TIL) statement and the Good Faith Estimate (GFE).
You will receive a Loan Estimate early on in the loan process, in most cases within 3 days of an application. The Loan Estimate consists of 3 pages:
Loan Estimate Page 1
- Applicant info and details on the property
- Loan Terms, Loan Purpose, Loan Type
- Projected Payments throughout the loan
- Estimated Closing Costs and how much money you’ll need to close the loan
Loan Estimate Page 2
- Section A. Origination Charges. These are the lender costs
- Section B through H. Other Costs such as appraisal, title fees, escrows, etc.)
- Calculation showing the estimated cash to close
Loan Estimate Page 3
- Contact info for the lender, loan officer, and mortgage broker
- Comparison section which allows you to compare different loans
- Other Considerations which gives further details on the specific loan being disclosed
Once you are ready to move forward with your mortgage, you will sign an Intent to Proceed disclosure. This allows your loan officer to proceed with processing your loan.
The Closing Disclosure replaces the final Truth-in-Lending (TIL) disclosure as well as the HUD-1 Settlement Statement.
The Closing Disclosure will be delivered to you when your loan is ready to close. It is designed to provide the final figures that were originally disclosed on the Loan Estimate. It also includes additional information regarding your escrow account for property taxes and insurance.
Lenders are required to give you a minimum of three business days (all days except Sundays and federal holidays) to review the Closing Disclosure before closing. You must acknowledge receipt of the Closing Disclosure in order to start the countdown for the three days.
There are certain requirements relating to the waiting period time depending on whether the Closing Disclosure is delivered to you electronically (email) or via mail (USPS). In most cases, providing your loan officer with an email address will require the shortest waiting period to close your loan.
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