By Jason Boone
Before buying real estate in Bend, Oregon, it’s helpful for a prospective buyer to know more about some important documentation changes. The TILA–RESPA Integrated Disclosure, or TRID, is a mouthful for most anyone to say. But what might be difficult to say (the government is calling it Know Before You Owe) is actually meant to make securing a home loan a bit more streamlined and easier to understand for average homebuyers.
Know Before You Owe, which went into effect on Oct. 3, essentially combines four documents (RESPA and Truth-in-Lending disclosures) into two easily readable documents. The new documents are meant to be more uniform so that the Loan Estimate form seen at the time of the loan application is essentially the same as the Closing Disclosure form.
The idea is to make the documents simpler to read while making it easier for homebuyers to track any changes. Like anything, though, the devil is in the details.
Here is what both buyers and sellers of Bend, Oregon homes need to know:
- Along with simpler forms, the primary difference will be in the timing of the loan process. The Loan Estimate is due from lenders to buyers within three business days after applying for a loan, and the Closing Disclosure is due to buyers at least three business days before closing. This is to give buyers ample time to review the documents before closing on the loan. But among other issues, the new timing does make it more challenging for someone to concurrently close on a new home while selling an older home.
- The new timing does have consequences in that the entire loan process could perhaps take longer. Early reports are that this is indeed happening, stretching out closing time to 45 to 60 days in some circumstances.
- Sellers and buyers now receive and sign separate Closing Disclosure forms. To protect privacy, each form will only show information pertinent to their transaction. (For instance, the seller’s Closing Disclosure will not include the interest rate on the buyer’s loan.)
- Under the new rules there is no longer a Good Faith Estimate or HUD-1 settlement forms. The information once contained in these two forms are now included in the Loan Estimate and Closing Disclosure Forms.
Hopefully, any lengthening of the loan process will be short-term as lenders figure out the timing of the new documentation. The key will be to find an experienced Realtor who can help guide a homebuyer through the new process, and better ensure an on-time closing. I’m here to help.
To get started with listing your Bend, Oregon home, or to view area homes contact me by calling (541) 383-1426 or visit Bend Property Search to connect with me through my website.
For a more in-depth look at Know Before You Owe, you can read the Consumer Financial Protection Bureau’s 96-page Guide to the Loan Estimate and Closing Disclosure Forms.