Financing a home can be stressful, as exciting as it is to close on a new home. New rules will make it easier for buyers to understand their financial obligations when they take a loan.
On October 3, a new set of rules that require lenders to provide borrowers with clearly laid out details on their loan and what it will cost them in an initial estimate and, closer to closing, a final summary took effect.
These rules, called the “Know Before You Owe” rules were put into effect by the Consumer Financial Protection Bureau. Borrowers also will can review their final loan terms and fees before the transaction closes for a minimum of three days.
“It’s going to be easier to compare loan offers, and when you close it’s going to be easier to check to see if you’re getting the loan that you were promised,” said Holden Lewis, a mortgage analyst at Bankrate.com.
These rules also imply potential delays if a borrower’s finances drastically worsen. For example, if a borrower’s credit score changes near the closing date, lenders will restart the loan disclosure process.
To steer clear of problems when getting used to these new processes, there are a few recommended tips to follow. Florida Realtors posted more details about these suggestions.
First, understand the changes that come with new documents. Avoid causing delays by not doing things like applying for credit, closing out a credit card or going on a credit-spending spree before sealing the deal on a home. Borrowers are also recommended to ask for a longer rate lock to have a better cushion of time. Lastly, try to do a final walkthrough of a home several days before the closing, because changes to loan terms can only be made three days before the closing.
Florida Realtor lawyers also compiled a list of need-to-know information about the changes.
Interested in buying a home? These changes will make the process smooth and relaxing for you! Don’t wait to check out some of Miami’s best properties from RE/MAX Paradise!