A New Mortgage Loan Process is Here. Are You Ready?
TRID (an acronym for the TILA-RESPA Integrated Disclosure Rule regulation) is a federal initiative that aims to streamline the mortgage loan process for borrowers that rolled out at the end of 2015. At its heart, it’s designed to help our customers know the ins and outs of their loans before they sign on the dotted line.
What It Does
Let’s dig into that more and break it down into TRID’s 3 major benefits.
First, TRID ensures that customers will understand more about the implications of different loan products, as well as anticipate issues if or when payment changes come up with something like an adjustable rate mortgage. This makes it easier to shop for your loan and to compare costs between providers.
Second, with consistent documentation across lenders and the other third parties involved (like lawyers and real estate agents), you’ll get to look at the true cost of your loan (no matter the provider), the credit commitment, and the cost of the overall transaction.
Third, it ensures that you have plenty of time before closing to view and understand the documents you receive. In fact, the new Closing Disclosure document—which tells you what the closing costs are and again, the total cost of the loan and what that looks like—is required to be given to the borrower at least three business days before the closing date.
There’s no wiggle room with that three days, and it doesn’t include the mail date. If you don’t have that closing document in hand for that window before your closing, it will not happen. Period.
While that might seem overly strict, it’s designed to put the power and appropriate information into your hands at a time when you’re making a large, and potentially life changing, decision.
What You Can Expect From Us
It also means that, in order to close on time and without complications, you and your mortgage professional need to work as a team to be on top of the many moving parts that are involved in a home loan, even more so than you and they might have been before.
Here are a couple of changes we’ve made to our processes to uphold our commitment to accountability and to delivering your loan on time:
- Revise processes and paperwork to improve the mortgage loan experience and uphold the regulations laid out in TRID.
- Clearly set expectations and communicate often with borrowers about what’s required, next steps, and any potential changes.
- Partner with local real estate agents, attorneys, and others who are helping you with home buying or selling much earlier in the process so that so that all parties have the information needed to complete the documentation in time for the closing.
We want to get you to that point where you’re very comfortable; your loan is approved, you can start packing your boxes, and you don’t have to worry about anything. We’ll explain everything along the way to make sure the loan you’re securing is the best one for you and your family.
Bring These Items With You When You Apply
Having these documents in hand will help you and your mortgage loan team get a head start on the process.
- Paystubs (most recent)
- W2’s or 1099s if applicable (2 years)
- Tax returns including all schedules and K-1’s (2 years)
- Bank statements (2 months)
- Purchase contract on home being purchased
- Photo ID of borrowers
Paperwork Change Up
Common documents that you’ll no longer see:
- Good faith estimate (GFE)
- The TIL (Truth in Lending) disclosure
These are incorporated into one disclosure called the Loan Estimate, which will be provided at the front-end of the process.
At the end of the loan process, where you’re closing the loan, you’ll no longer see:
- The final TIL
- HUD-1 Settlement Statement
The document replacing those will be the Closing Disclosure. The Loan Estimate and the Closing Disclosure (CD) look a lot alike, so the borrower can take the Disclosure and set it up against the Estimate to see if all the costs they were told about stayed consistent.
Ready to get started or want to learn more about the mortgage application process? Get in touch with an expert today.