Will the new mortgage disclosures delay my closing?

The answer is NO for just about everybody.

For mortgage applications submitted on or after August 1, 2015, lenders must give you new, easier-to-use disclosures about your loan three business days before closing. This gives you time to review the terms of the deal before you get to the closing table.

**NEW UPDATE: The date for these new regulations has just been extended to October 3rd, 2015**

Many things can change in the days leading up to closing. Most changes will not require your lender to give you three more business days to review the new terms before closing. The new rule allows for ordinary changes that do not alter the basic terms of the deal.

Only THREE changes require a new 3–day review:

  1. The APR (annual percentage rate) increases by more than 1/8 of a percent for fixed-rate loans or 1/4 of a percent for adjustable loans.* A decrease in APR will not require a new 3-day review if it is based on changes to interest rate or other fees.
  2. A prepayment penalty is added, making it expensive to refinance or sell.
  3. The basic loan product changes, such as a switch from fixed rate to adjustable interest rate or to a loan with interest-only payments.

(*Lenders have been required to provide a 3-day review for these changes in APR since 2009.)

NO OTHER changes require a new 3–day review:
There has been much misinformation and mistaken commentary around this point. Any other changes in the days leading up to closing do not require a new 3-day review, although the lender will still have to provide an updated disclosure. For example, the following circumstances do not require a new 3-day review:

  • Unexpected discoveries on a walk-through such as a broken refrigerator or a missing stove, even if they require seller credits to the buyer.
  • Most changes to payments made at closing, including the amount of the real estate commission, taxes and utilities pro ration, and the amount paid into escrow.
  • Typos found at the closing table.
Information for this post obtained here: http://files.consumerfinance.gov/f/201506_cfpb_factsheet_will-the-new-mortgage-disclosures-delay-my-closing.pdf

This information is provided by Amy Craft, Account Executive with Old Republic Title located in Kingwood, TX and serving Kingwood, Humble, Atascocita as well as surrounding areas. For more information about Old Republic Title or to find a branch near you, contact Amy today at 832-727-2102 or by email ACraft@OldRepublicTitle.com.

About AmyCraft

I've made a commitment to serve the real estate needs of my community - one family and one home at a time. My real estate knowledge and expertise are completely dedicated to you. I am a Graduate of Champions School of Real Estate and came into the real estate profession with an education background. Prior to working in real estate I was the owner of a successful daycare center. My career as an educator was very rewarding and taught me many things that I believe I have benefited from in the real estate industry. I have learned such things as negotiating with people while always keeping their best interest in mind, listening to what they are saying, maintaining flexibility and understanding, performing multiple tasks simultaneously and how to be assertive yet remaining calm under the most stressful situations. A real estate deal may be the biggest financial transaction a person will ever make. I try to respond to peoples concerns and fears with as much information as I can provide. Most importantly, I want to make sure my clients are comfortable with a certain price range rather than trying to push the pre-approved amount on them. I'm not a pushy Realtor, but I'm aggressive when it comes to getting my clients what they want. Whether you're looking to buy or sell, I can get your home sold, or find you the home you've been dreaming of. Either way, my goal is to make your experience comfortable, guided, fast, and efficient. After all "Nobody Knows The Area Better Than A Good Neighbor".
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