November 6, 2015
What’s this “TRID” acronym you’ve been seeing all over lately? It’s the “TILA/RESPA integrated disclosure” rule (let’s not bother with what that stands for), known more simply as the "truth in lending disclosures." And, just like it sounds, it’s basically good for you.
In short, as of October 3, some of the documents you need to deal with when you buy your home, while longer and more detailed than before, are easier to understand—and you have more time to read them.
More paper, but more time to read it too
Enacted in the wake of the mortgage crisis, the new rule affects both the documents you get when you apply for a mortgage—including the loan estimate—and those you sign at the closing. “The information’s the same, the rates are the same, the costs are the same, and so forth,” says Kim Harris, homeownership director at the Indiana Housing and Community Development Authority. “It’s the manner in which this information is being disclosed that has changed.”
Perhaps most important to borrowers is that instead of seeing your closing documents for the first time at the closing, you’ll get three days to review and digest them. That’s actually not a change, Harris says, but now the rule is going to be enforced by the Consumer Financial Protection Bureau. This is good regardless, but it’s even more sensible now that the documents are longer.
No need to get overwhelmed
“It’s good from the standpoint that borrowers are going to have more time to review the documents,” he says. “And I hope they do. I think borrowers do get overwhelmed by it. But if they take their time to go through it, they start to get it and find it’s not too bad.”
Hear that? You get to “take your time.” Ah, less pressure . . . always good for first-time homebuyers especially. People on the business side of the desk might not be happy with this 2,000-page rule, which has spawned at least one self-study web course. But here on the dream side, we’re all for putting homebuyers first in the mortgage process.
To view sample disclosures and learn more about TRID, visit the Consumer Financial Protection Bureau website.
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