Big Changes For Getting A Home Mortgage Are Here! (TRID)

Big changes have arrived in the mortgage loan process for home buyers across the county! It’s called TRID. These changes will get rid of 3 old forms (the good faith estimate, truth in lending disclosure, and the HUD-1) to improve clarity of the loan terms/fees and make life easier for you, the home buyer. This is nicknamed “know before you owe.”

What the heck is TRID? Well, it stands for TILA-RESPA Integrated Disclosures. These are required under the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures Act (RESPA). 
If you have ever purchased or sold a home or refinanced one, you have seen the Good Faith Estimate and Truth In Lending disclosure at the beginning of the loan process to estimate costs/fees. You will also have seen the overly-complicated closing settlement statement called a HUD-1. It itemized services and fees associated with a real estate closing transaction-whether you bought, sold, or refinanced a home. It also assured borrowers that they are receiving the loan they agreed on. 

As of October 3rd, 2015 here are the changes you can expect:

The 3 documents mentioned above will be replaced by 2 forms. 1) The Loan Estimate (replaces the Good Faith Estimate and the initial Truth In Lending Disclosure). 2) The Closing Estimate (replaces the HUD-1 and the final Truth In Lending Disclosure). Under TRID, the Loan Estimate must be mailed or hand-delivered to the borrower no later than the 3rd business day after receiving a mortgage application, and no later than the 7th day before the transaction closing. A consumer must receive the closing disclosure at least 3 days prior to closing. If any of these do not occur on time, it will likely delay the entire process and extend the closing date.

TRID-closing disclosure


Unlike the old documents being replaced, the new Loan Estimate and Closing Disclosure will now mirror each other with information such as loan terms, projected payments, costs of closing, and other costs. This allows borrowers to easily compare the two.
Since the Closing Disclosure is received at least 3 days prior to closing, it allows for plenty of time to review and compare it to the Loan Estimate, before closing on the mortgage. In the past, you may not have gotten the HUD-1 settlement statement until the morning of the closing. This left you scrambling without time to review (or perhaps not even reviewing it at all!), making it hard to compare your original Good Faith Estimate and Truth In Lending Disclosure, because they were in two different formats.

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3 Responses to “Big Changes For Getting A Home Mortgage Are Here! (TRID)”

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