“Know Before You Owe” Begins October 3, 2015

Real Estate professionals and lenders have been getting ready for the new government lending guidelines for awhile now.  Historically, when a consumer purchased  their home with a mortgage they were bombarded by paperwork requirements and disclosures throughout the entire home buying process. While absolutely necessary, this process can also crush  the “fun” of buying their dream home!

Typically, when “closing day” finally arrives, the buyer’s are relieved as they have taken off work, already have their things packed on a moving truck, have slept on a mattress on the floor the last 2 nights, and have already transfered utilities.  The buyers are ready to sign on the dotted line and get their keys!  Meanwhile, their HUD-1 closing statement (the document that tells them where all their money is going) may have been changed a half dozen times or so in the last 24 hours alone.

As of tomorrow, not anymore!  If a loan application is made by the consumer after October 3, 2015, the “closing statement” a borrower will sign at the closing table will now be ready for review 3 BUSINESS DAYS prior to closing so that any questions can be answered and the buyer has a better understanding of the exact terms of their loan.  If any changes need to made, the 3 business day wait will begin again.  So what does this mean exactly for the buyer, seller, the real estate professionals, lenders, and closing attorneys involved in the real estate transaction?  Currently, we write contracts to “close” on a home after 30-45 days but we are being warned by lenders to go ahead and add an extra 7-14 days to the approval process.  Essentially, we all need to work towards 2 closing dates; the “closing” of the paperwork being approved by all and then at least 3 business days later the “at the table closing” paperwork, where all documents are signed, the transfer of the deed is recorded, and a seller gets their proceeds and the buyer gets their keys!

While, in the beginning this might be a little scary for all those involved as we all anticipate delays in the closing process; I see, in the not so distant future, the initial kinks getting worked out and the closing process improving for all parties involved.  No more of the last minute “morning of closing and we don’t even know if we are closing or not” scenarios that cause stress on every buyer and seller out there!  Here is an article from Realtor.com with more information and of course you can call our office and speak to one of our experienced realtors to help answer any further questions.